How does FDI influence health outcomes in Africa?

Boachie

Kisseih³

2021

Global Health

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Background As African governments take measures to enhance international trade and Foreign Direct Investment (FDI) inflows, a major concern is that, these measures can make Africa more vulnerable to the strategies of the tobacco industry. This concern is based on the fact that, each year, tobacco use is estimated to be responsible for the deaths of over eight million people in the world. However, there is very little empirical evidence to refute or confirm the above concern, especially in the African context. This study therefore investigates the effects of FDI and trade on the prevalence of tobacco consumption in Africa. Methods Data on a sample of 31 African countries for the period, 2010–2018 are used. The system Generalised Method of Moments (GMM) regression model is employed as the empirical estimation technique. Results The findings show that, FDI and trade have negative and positive significant association with the prevalence of tobacco consumption respectively. These findings are robust even after using different specifications and indicators of FDI and trade. Conclusion Rising trade (and not FDI) should be of concern to African governments in the quest to reduce the prevalence of tobacco consumption on the continent.

Section: Discussionsupporting

confidence: 93%

Effects of foreign direct investment and trade on the prevalence of tobacco consumption in Africa: a panel study

Boachie

Kisseih³

2021

Global Health

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“…Our finding can be attributed to the fact that in recent times, FDI inflows into Africa are more concentrated in the services sector relative to the manufacturing sector [38]. Moreover, the negative sign of FDI (though insignificant) can be related to Immurana [39] who found FDI to improve health in Africa.…”

Section: Effect Of Urbanization On the Prevalence Of Smokingmentioning

confidence: 78%

The effects of tobacco taxation and pricing on the prevalence of smoking in Africa

Boachie

Iddrisu

2021

glob health res policy

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Background Tobacco use continues to kill millions of people globally, making it one of the major causes of preventable deaths. Notwithstanding, there has been a very marginal fall in the prevalence of tobacco smoking in Africa. Since taxes (hence prices) are part of the main measures suggested to decrease the demand for tobacco products, this study investigates how tobacco taxation and pricing influence the prevalence of smoking in 24 African countries. Methods Using panel data on 24 African countries sourced from the World Health Organization (WHO) and the World Bank databases for the period 2010 to 2016, this study employs the system Generalized Method of Moments (GMM) estimator to investigate the effects of tobacco taxation and pricing on the prevalence of smoking. The system GMM estimator is used due its ability to deal with potential endogeneity of tobacco taxation and pricing: the likelihood that the prevalence of smoking can influence tobacco taxation and pricing which may lead to biased estimates. Results Tobacco taxation and pricing have negative significant effects on the prevalence of smoking among the selected countries after controlling for growth of Gross Domestic Product (GDP) per capita, urbanization, death rate and net inflows of Foreign Direct Investment (FDI). Specifically, a percentage increase in tobacco price is found to decrease the prevalence of smoking by between 0.11 to 0.14%, while a percentage increase in tobacco tax decreases the prevalence of smoking by between 0.25 to 0.36%, all at 1% level of significance. Conclusion Since tobacco taxation and pricing are found to have negative significant effects on the prevalence of smoking, the implication is that, their use can be intensified by African policy makers towards achieving the WHO Framework Convention on Tobacco Control (FCTC) recommended targets and hence decrease the prevalence of tobacco smoking in Africa. Doing so may therefore help in achieving the Sustainable Development Goal (SDG) 3.5 (prevention and treatment of substance abuse), thereby reducing the colossal number of smoking attributable deaths.

“…Thus, it can be concluded that population health significantly influences FDI inflows into Ghana irrespective of the indicator used, hence in Ghana's quest to attract more FDI inflows, efforts must be channeled toward ensuring a holistic improvement in population health. To do this, measures toward increasing the number of physicians, enhancing immunisation coverage, increasing the availability of hospital beds, enhancing access to formal education, increasing health expenditure, as well as access to clean water and sanitation, should be embarked upon since they have been found (see, for example, Arthur and Oaikhenan, 2017;Uprety, 2019;Immurana, 2020) to enhance population health.…”

Section: Discussionmentioning

confidence: 99%

“…Notwithstanding, concerning the effect of population health on FDI, there is a potential endogeneity where the dependent variable; FDI, is capable of influencing population health, which may result in biased estimates. Specifically, studies such as Herzer and Nunnenkamp (2012), Nagel et al (2015), Burns et al (2017) and Immurana (2020) have found FDI to have a statistically significant effect on population health.…”

Section: Model Specification and Estimation Strategymentioning

confidence: 99%

Does population health influence FDI inflows into Ghana?

2020

IJSE

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PurposeGhana is one of the countries instituting several measures toward attracting more Foreign Direct Investment (FDI) inflows. This is because, FDI is largely viewed as essential to socioeconomic development. However, while population health can influence FDI inflows, it has received very little attention. This study, therefore, investigates empirically, as to focusing on population health could be a useful tool in Ghana’s attempt to attract more FDI inflows.Design/methodology/approachThe study uses time series data on Ghana from 1980 to 2018 to achieve its objective. Life expectancy, death rate, infant mortality rate, under-five mortality rate and incidence of malaria are used as proxies for population health, while the Ordinary Least Square (OLS) and the Instrumental Variable Two-Stage Least Square (IV2SLS) regressions are employed as empirical estimation techniques.FindingsUsing the OLS regression, except the incidence of malaria, the study finds all the other population health indicators to significantly influence FDI inflows. However, after controlling for endogeneity using the IV2SLS regression, all population health indicators are found to be significant as regards their effects on FDI inflows.Practical implicationsPaying attention to population health could be an effective strategy that can be employed by policymakers in the quest to get more FDI inflows into Ghana.Originality/valueThis study, to the best of our knowledge, is the first study solely devoted to Ghana, which doing so helps in devising country-specific policies with regard to the effect of population health on FDI inflows. Further, this study becomes the first to use death rate, infant mortality rate and under-five mortality rate in examining the effect of population health on FDI inflows. Thus, since there are various causes of deaths, using indicators that capture deaths from all factors helps in giving a much broader picture with regard to the FDI population health nexus. Also, this study is the first to use up to five different population health indicators in examining the effect of population health on FDI inflows, which aids in revealing whether FDI is sensitive to the population health indicator used.