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Paper short abstract:

This article aims to set out a research agenda for investigating the spillover effects of green FDIs in SSA. Particular attention is dedicated to spillover effects arousing from FDIs in the mining of critical minerals and in the renewable energy sector.

Paper long abstract:

One consequence of the world's growing interest in critical minerals in Sub-Saharan Africa (SSA) is the increase in Foreign Direct Investments (FDIs) flowing to African countries, leading to both direct and indirect economic effects. This article aims to establish a research agenda for investigating the spillover effects of FDIs in SSA resulting from investments in green transformation. Spillover effects, defined as the transfer of technology, encompassing hardware, software, and brainware (Nowakowski 2005), from foreign firms to local entrepreneurs or the broader local economy, are often considered catalysts for industrialization and structural transformation.Historically, FDIs in the mining sector have shown minimal forward and backward linkages, operating as capital-intensive enclaves with limited local participation and inputs (Hirschman 1958; Seers 1964), resulting in minimal spillover effects on local economies. Consequently, a pertinent research avenue for contemporary studies is to verify whether this time the character of the green FDIs in the mining sector are different? What are the differences in the potential of foreign investors, the capacity of local companies, and the institutional settings in local economies compared to past scenarios? If material differences exist, are they sufficient to bring about the long-awaited structural transformation in African economies? Moreover, in recent years, green FDIs in Africa have extended beyond the mining sector, exploring the solar, wind, hydro, and geothermal potential of the continent. Investigating spillover effects from green investments in non-extractive sectors represents another key research avenue.