IMPACT OF FOREIGN DIRECT INVESTMENT ON THE GROWTH OF NIGERIA’S ECONOMY
Abstract
ABSTRACT
This study examined the effect of foreign direct investment (FDI) on Nigeria’s economic growth over the period 2007–2023. Using annual secondary data obtained from the Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators, the study employed time-series econometric techniques, including descriptive statistics, correlation analysis, and multiple regression modelling. The results showed that both FDI inflows and exchange rate movements exerted positive and statistically significant effects on real GDP. Specifically, increases in FDI were associated with higher output growth, underscoring the role of external capital and technology transfer, while exchange rate stability emerged as a critical determinant of investor confidence and macroeconomic performance. The findings confirm that although Nigeria remains a major destination for FDI in Africa, the growth impact depends heavily on stable macroeconomic conditions. The study recommends policies aimed at diversifying FDI into non-oil sectors, strengthening exchange rate management, and improving absorptive capacity through investment in infrastructure, human capital, and financial market development. These measures are vital for maximising the developmental impact of foreign investment and ensuring sustainable economic growth.
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