The Impact of Foreign Direct Investment and Political Stability on Food Security: Evidence from Sub-Saharan African Countries

This paper investigates the impact of Foreign Direct Investment (FDI) and political stability on food security (SDGs2) in Sub-Saharan African countries using simultaneous equation model and GMM method over the period 1996-2020. The empirical results show that FDI positively affects food security in Sub-Saharan African countries, East Africa (EAC), West Africa (WAMZ) and WAEMU. The results show that political stability negatively affects food security in Sub-Saharan African countries, CEMAC, ECA and WAEMU, while having a positive impact on food security in SACU and WAMZ. Other important results show that the interaction of FDI and political stability has a positive and significant impact on food security in Sub-Saharan African countries and SACU, while negative impact in EAC and WAEMU. This implies that political stability plays a crucial role on how FDI affects food security. This result indicates that improving food security in Sub-Saharan African countries depends on increasing the inflows of foreign direct investment and improving political stability. The policy implications of this study is that governments in Sub-Saharan African countries must give great importance to improving political stability, thus, increasing FDI inflows and enhancing the level of food security (SDGs2).