ABSTRACT
This study examined institutional quality and foreign capital flows to Sub-Sahara Africa countries. The objectives of the study were to determine the relationship between corruption control and foreign capital flows to Sub-Sahara Africa countries, ascertain the extent to which regulatory quality affect foreign capital flows to Sub-Sahara Africa countries, examine the impact of political stability on foreign capital flows to SubSahara Africa countries, determine the extent to which government effectiveness affect foreign capital flows to Sub-Sahara Africa countries, and examine the relationship between rule of law and foreign capital flows to Sub-Sahara Africa countries. The research design adopted in this study was the causal research design which involves investigating phenomena in terms of relationships using real world data or information. This study used secondary data sourced from Worldwide Governance Indicators, UNCTAD statistics. Data covered a period of twenty four (24) years (1999 to 2022). Two main methods were proposed in the empirical analysis. These were the descriptive statistics and the Johansen Co-integration econometric technique. The descriptive statistics helped provide the background characterization of the data that was analysed. The multiple regressions helped to provide the relationship among the hypothesized variables in the model. The co-integration econometric technique helped to explain the long run (steady state) effects of institutional quality on foreign capital flow in Nigeria, Ghana, South Africa, Morocco, Kenya and Cameroon. The findings suggest that while some variables exhibit stationarity without differencing, others require differencing to achieve stationarity, reflecting the diverse characteristics of the data and highlighting the importance of employing appropriate analytical techniques. Additionally, the Hausman test results provide insights into the consistency of the random effects model, guiding the selection of the most suitable econometric approach for model estimation. In light of the empirical findings and analytical insights generated by this study, several key recommendations are proposed to guide policy formulation and decision-making processes. These recommendations emphasize the imperative of strengthening institutional capacity, combating corruption, enhancing the regulatory environment, promoting political stability, investing in human capital, fostering public-private partnerships, and prioritizing sustainable development goals. By implementing these recommendations in a coordinated and strategic manner, governments can leverage foreign investment as a catalyst for inclusive growth, sustainable development, and poverty reduction.
