Globalisation, Foreign Direct Investment and Income Inequality in Sub-Saharan Africa

Understanding the relationship between globalisation, foreign direct Investment (FDI) and income inequality is very important for economic development. A proper understanding of the relationship can lead to more effective policies that foster equitable distribution of income and sustainable progress. Therefore, this study investigated the effect of globalisation and FDI on income inequality in sub-Saharan Africa (SSA) during the period 1986 to 2024. The study employed Panel ARDL as the technique of estimation. The study found that globalisation contributes to income inequality in the long-run while it has insignificant in the short-run. Also, FDI reduces income inequality in the long-run while its effect is insignificant in the short-run.  The study found that GDP per capita promote income distribution in the long-run while it has no significant effect in the short-run. Drawing the findings from this study, the study suggests that the policy makers should use globalisation and FDI to promote social protection programs, such as cash transfers, pensions, and unemployment benefits as they can reduce inequality by raising the disposable incomes of vulnerable households.