The Impact of Foreign Direct Investment on the Nigeria Economic Growth

Abstract

The study analyzed the impact of foreign direct investment on Nigeria economic growth over the period of 1987- 2017. The main type of data used in this study is secondary; sourced from various publications of Central Bank of Nigeria, such as; Statistical Bulletin, Annual Reports and Statement of Accounts. The regression analysis of the Augmented Dickey Fuller Unit Root Test (ADF) and Auto-Regressive Distributive Lag (ARDL) were the estimation technique employed in this study to determine the stationarity/order of integration and the relationship between Foreign Direct Investment and economic growth. The findings revealed and concluded that there exists a long run relationship between foreign direct investments on the Nigeria economic growth. That is, economic growth is directly related to inflow of foreign direct investment and it is also statistical significant at 5% level. This implies that foreign direct investment is an engine of economic growth. The paper recommended that government should liberalize the foreign sector in Nigeria so that all barriers to trade such as arbitrary tariffs; import and export duties and other levies should be reduced so as to encourage investors.