Foreign Direct Investment and Economic Growth in Somalia

Abstract

The purpose of this paper is to examine the influence of foreign direct investment for economic growth in Somalia. This paper was used Ordinary Least Squares (OLS) to make econometrics test. And consider using neoclassical growth theory. This paper was found that foreign direct investment in an economy shows that there is a good trend of investment which ultimately results in increasing the GDP in Somalia. The paper was found that FDI, Export and standard of living has direct and significant impact on the Somalia economic output. While Import has inverse and significant impact on the Somalia economic output. The paper recommended there is need for the government to retain right monetary and fiscal policies and train the somali employee in order to attract in the Somalia economy.

Keywords: Gross domestic product, foreign direct investment, export.