The Impact of Private Investment on the Sustainable Development of Sub-Saharan African Countries: The Moderating Role of Institutional Quality

With an emphasis on the moderating effect of institutional quality, this study examines the effect of private investment on the sustainable development of Sub-Saharan African (SSA) nations. The analysis uses Generalised Method of Moments (GMM) and Feasible Generalised Least Squares (FGLS) methodologies to address potential endogeneity concerns and to improve the robustness of the results respectively. The study made use of panel data from 30 SSA nations from 2009 to 2019 obtained from World Develop-ment Indicators and Heritage Foundation. The results show that institutional quality and private investment have each have substantial and favourable impacts on sustainable development. Nevertheless, the results further demonstrates their combined influence have a negative impact on sustainable development, indicating that although both are advantageous separately; their combined influence might not always be in line with the objectives of sustainable development in the SSA context. This demonstrates a threshold effect by showing that the advantages of private investment in sustainable development decline in settings with inadequate institutional frameworks. The results imply that in order to guarantee that investments successfully support sustainable development, SSA nations should give priority to fortifying institutional frameworks in addition to encouraging private investment. These findings offer practical policy suggestions for creating a supportive atmosphere that optimises the positive developmental effects of private sector involvement.