Slow Growth of Foreign Direct Investment in Central African Republic

Abstract

Large amounts of foreign direct investment (FDI) has been attracted by many African countries. Yet, Central African Republic is by far less attractive in the perspective of potential investors. The aim of this article is to investigate the slow inflows and growth of FDI in the country. In the short and long run, we found out that the gross domestic product growth, the domestic credit to private sector, the electricity production and the quality of public administration are not significant. The error correction mechanism is significant at 0.05 which demonstrates that the speed of adjustment of the model from short run to long run is about 46 per cent. It is very important for the Central African Republic to renovate the national electricity supply company by increasing the hydroelectric production.