IMPACT OF RENEWABLE AND NON-RENEWABLE ENERGY ON FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH

Abstract

This study examines the impact of renewable and non-renewable energy on foreign direct investment (FDI) and economic growth in Nigeria from 1980 to 2017. The objectives are to assess how renewable energy influences economic growth, FDI, and the interplay between renewable and non-renewable energy. Using techniques such as the Augmented Dickey-Fuller test, Co-integration, and the Auto Regressive Distributed Lag (ARDL) model, secondary data from the World Bank were analyzed, focusing on GDP, renewable energy, non-renewable energy, and FDI. The findings indicate that GDP positively influences renewable energy in the long run, while non-renewable energy has a negative effect. In the short run, non-renewable energy and GDP significantly impact renewable energy, while FDI shows no effect. Recommendations include fostering a stable political environment to attract FDI and providing incentives like subsidies and tax holidays to promote trade and investment in renewable energy. Effective macroeconomic management is essential for translating economic growth into increased renewable energy consumption in Nigeria. KEYWORDS: Renewable Energy, Non-Renewable Energy, Foreign Direct Investment and Economic Growth.