FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN NIGERIA
Abstract
ABSTRACT
This study evaluates the relationship between foreign direct investment and economic growth in Nigeria over the period 1986 to 2023 using annual time series data. While exploring the impact of foreign direct investment on economic growth, the study tested for the existence of causal relationship between foreign direct investment and economic growth. The study variables include real GDP, foreign direct investment, domestic investment, and political stability all sourced from CBN statistical bulletin, NBS and WDI respectively. Utilizing the granger causality test and the ordinary least square (OLS) techniques of analysis, findings of the study on the one hand revealed that a bi-directional causal relationship flows between foreign direct investment and economic growth in Nigeria. On the other hand, findings of the study revealed that foreign direct investment had a significant positive impact on economic growth in Nigeria. The study thus recommended that targeted policies that attract and retain quality FDI should be adopted by the government to ensure macroeconomic stability, improve ease of doing business, and guarantee investor protection.
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