Countries in sub-Saharan Africa have implemented policies to attract foreign direct investment to boost economic performance. However, the discussions have barely centered on whether African countries are leveraging FDI in the right channels to boost productivity growth. In this paper, we examined whether African countries which channel FDI into certain sectors of their economies can induce FDI and productivity growth transmission. In the end, we sought to ascertain whether the attraction of FDI into some strategic sectors can foster sustainable economic development in Africa. This paper also decomposes the net FDI inflows into positive and negative shocks to examine the asymmetric influence of FDI on economic growth. The study used panel data which features 30 sub-Saharan African countries spanning from 1990-2019. Multiple panel data analytic techniques such as the autoregressive distributed lags (ARDL), dynamic ordinary least square (DOLS) and the fully-modified ordinary least squares (FMOLS) were used to achieve the purposes of the study. The findings revealed that the influence of FDI on economic growth was insignificant without the conditioning effect of sectoral value additions. However, when we examined the conditioning effects, we found that FDI that is channeled into agricultural, industrial and manufacturing value addition had strong positive net effect on economic growth. A higher and a lower inflow of FDI was seen to be only significant on economic growth from the transmission in the agricultural and the service sector. The results imply that, to improve welfare FDI inflows should be directed at the agricultural, industrial and the manufacturing sector. In the end, FDI should be channeled to boost technological advancement in the sectors and industrialization which would in turn help to promote sustainable development in Africa.
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