The objective of this research is to analyze whether there is a spillover or crowding out effect of FDI on domestic private investment in 40 Sub-Saharan African countries over the period 2003 to 2020. Thus, a dynamic panel model estimated by the GMM-system method is used. We find a spillover effect of net FDI flows on private domestic investment. However, this effect is constrained by increasing resource rents and improving the quality of institutions. The implication of our results is that reducing the dependence of sub-Saharan African countries on natural resource rents could enhance private domestic investment.

FDI, domestic private investment, institutions, natural resources, Sub-Saharan Africa