IMPACT OF FOREIGN DIRECT INVESTMENT ON NIGERIA’S ECONOMIC GROWTH
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Abstract
This study examines the impact of Foreign Direct Investment on economic growth in Nigeria. The economic growth was proxied by real gross domestic product whilst the Foreign Direct Investment (FDI), Exchange Rate (EXR), Inflation Rate (INFR) and Interest Rate (INTR) were the regressors. Secondary data was employed and sourced from the statistical bulletin of the Central Bank of Nigeria (CBN,) The study adopts the Ordinary Least Square Method (OLS) for estimation. The stationary properties of the variables were determined using the Augumented Dickry-Fuller Test, while the Johansen Co-integration and the Granger Causality test were employed to determine the presence or otherwise of long run relationship and causality among the variables. The result reveals that Foreign Direct Investment (FDI) is positive and significantly contributes to economic growth of the Nigerian economy, while Exchange Rate (EXR), Inflation Rate (INFR) and Interest Rate (INTR) demonstrate negative and insignificant impact on economic growth. Therefore, the study recommends that government should provide an enabling environment that will encourage foreign investors to invest in Nigeria economy as well as ensuring a favorable Exchange rate, Inflation rate and Interest rate