Impact of Foreign Direct Investment on Economic Growth in the Gambia: Evidence from Time Series Analysis

Abstract

This paper aims to assess the impact of foreign direct investment on The Gambian economy using time series data from 1980-2018. Estimations were made using the Ordinary Least Square (OLS) together with various other econometric and statistical methods to analyze the nexus between FDI flows and economic growth in The Gambia. The results show a positive link between foreign direct investment and economic growth in The Gambia. This finding suggests that an increase in foreign direct investment will positively impact the economic growth of the country. Based on this finding, the paper recommends that policymakers in the Gambia develop business-friendly environment policies and a quality educational system and ensure political stability to attract foreign investors, which in turn could enhance the country's economic growth prospects.