This paper investigates how fluctuations in currency value affect investment in Sub-
Saharan Africa (SSA). While the existing literature focuses on foreign direct investment,
this study extends the analysis to domestic, private, and public investment. I use
panel data of 27 currencies used in 36 SSA countries, with the baseline analysis covering a
period from 1999 to 2017. I address endogeneity issues by using two-stage least
squares instrumental variable (2SLS-IV) identification strategy, in which a country’s
exchange rate regime is an instrument. I find that exchange rate volatility positively
affects foreign direct investment inflows and adversely affects both domestic and public investment.
The findings also highlight the critical role of institutional quality and
openness to trade in attracting investment in Sub-Saharan Africa.
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