Impact of Single Custom Territory on Foreign Direct Investment in Selected Countries of Sub Saharan Africa

Abstract

This study investigates the impact of Single Custom Territory (SCT) on Foreign Direct Investment (FDI) in selected countries in Sub-Saharan Africa (SSA). The study employs quantitative methods with the Difference in Difference (DID) econometric model to establish empirical evidence. The treatment and control groups are; the East African Community (EAC) member states and a collection of randomly chosen Sub Sahara African countries respectively. The time series data set from the World Data Index for the period of 2000 to 2019 is used. The main findings demonstrate that EAC SCT has a significant and positive impact on FDI inflow. The study implies that SSA should embrace a joint effort through SCT. By doing this, they will increase the market size and boost their level of economic performance through FDI inflow, cost reduction and cross border procedures during transportation of goods. Also, EAC governments should invest in strengthening their cooperation by working closely to mitigate challenges in the implementation of SCT so as to reap its maximum goals.