The Impact of China's Economic Activities in Africa on Economic Growth of African Countries

MICHALE EHIZUELEN MITCHELL OMORUYI

 

Abstract

Narrowing development gaps has been a critical issue globally. This paper aims to investigate the role of Chinese FDI, trade and aid in narrowing development gaps with respect to the growth performance of economies in that region. Using a Solow-type growth model and panel data for the period 1991 to 2011, this paper reveals that African economies that export natural resources have benefited from positive terms-of-trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. Chinese foreign investment and aid in Africa do not seem to have an impact on growth. 

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