Effect of foreign direct investment on gross national income in Nigeria, 2006-2017

Abstract

Effect of foreign direct investment on gross national income in Nigeria, 2006-2017 Kelechi Johnmary Ani Alex Ekwueme Federal University, Nigeria E-mail: kelechi.ani@funai.edu.ng Chigozie Onu Nnamdi Azikiwe University, Nigeria E-mail: asiano.jc@gmail.com Submission: 11/4/2020 Revision: 12/15/2020 Accept: 1/5/2021 ABSTRACT The study analyzed the effect of foreign direct investment on gross national income over the period of 2006- 2019. The main type of data used in this study is secondary; which were sourced from various publications of Central Bank of Nigeria, such as; Statistical Bulletin, Annual Reports and Statement of Accounts. The regression analysis of the ordinary least square (OLS) is the estimation technique that was employed in this study to determine the effect of the Direct Foreign Investment on gross national income in Nigeria. The cointegration test showed existence of a long run relationship and an indication that 1 cointegrating vectors exist at 5% level of significance among the variables which was corrected with error correction mode (ECM). The result showed that foreign direct investment had a positive effect on gross national income during the period 2006 – 2019. It also revealed that gross domestic product, exchange rate and unemployment rate has a positive effect on gross national income in Nigeria during the same period. The study recommends that government should try to develop trade zones, which are solely based on free economic movements and policies. The study recommends official re-consideration of different determinants of gross national income (GNI) attractions. Government incentives, infrastructure and policies should be put in place to make it easy for general foreign investors, to find Nigeria safe and reliable to invest. Finally, unique fiscal and monetary policies should be formed to strengthen the other macroeconomic variables which will help to overcome the situation of shocks in Nigeria while hosting Foreign Direct Investment inflow for future sustainable economic development.