Enabling Business Environment Research Articles

Exploring the Drivers and Constraints of Firm Capacity Utilization in the Middle East and North Africa

This study analyzes the drivers and constraints affecting enterprise capacity utilization (CU) in the Middle East and North Africa (MENA) region. We used data from the World Bank Enterprise Survey and a fractional logit model to examine the impacts of institutional, infrastructural, and sustainability factors on firms’ CU. Our analysis highlights corruption and competition in the informal sector as significant impediments to firms’ CU, alongside complex infrastructure barriers that hinder the optimization. Conversely, environmental responsibility and innovation emerge as critical drivers for enhancing CU. Surprisingly, top managers’ experience introduces a counteractive influence that negatively affects CU. Beyond the empirical findings, this study’s implications extend to various stakeholders, notably policymakers. Emphasizing the need to address corruption, foster an enabling business environment, strategically invest in infrastructure, promote sustainability initiatives, and foster innovation to enhance CU are paramount. Additionally, providing targeted managerial training to mitigate negative managerial influences is crucial. Implementing these recommendations promises to foster an environment conducive to improved CU, driving economic growth, and sustainable development in the MENA region and benefiting stakeholders across sectors.

Determinants of International Tourist Arrival in Nigeria

This paper examines the effect of economic and non-economic factors on international tourist arrival in Nigeria. Annual data on tourist arrival from 53 countries and explanatory variables from 2010-2016 were analyzed using the dynamic panel data regression technique. Results suggest that travel cost, internet use, political stability and number of hotel rooms are the main determinants of tourist flows. The income of tourist-origin countries outside Africa negatively and significantly affects tourist arrival. Travel cost has a robust negative effect on tourists from within and outside Africa. The number of hotel rooms and urbanization rate positively influence tourist arrival, indicating the importance of tourism infrastructure. Government and policymakers must provide an enabling business environment, infrastructure, and policies to improve the country's global competitiveness.

Assessing the Impact of Foreign Direct Investment on Unemployment Rate in Nigeria

Recent studies have shown that high rate of unemployment as currently witnessed in Nigeria, is one of the factors that can undermine the attainment of goal eight (Decent work and Economic growth) of Sustainable Development Goals (SDGs) by year 2030. Since foreign direct investment (FDI) is an important factor in creating jobs and improving economic growth, it is considered a veritable tool for reducing the unemployment level. Although there have been studies on FDI and unemployment in literature, there is hardly any study on the impact of FDI on rural and urban unemployment. The study pursued threefold objectives which are to ascertain the impact of FDI on aggregate unemployment in Nigeria; to examine the impact of FDI on urban unemployment rate in Nigeria and to determine the impact of FDI on rural unemployment in Nigeria. The study utilized data from 1990 to 2020 as well as dynamic ordinary least squares (DOLS) which eliminates problems of endogeneity and serial correlation. The theoretical framework of the study is anchored on the Keynesian theory of unemployment. The result obtained showed that FDI has a significant impact on aggregate and urban unemployment in Nigeria. However, FDI did not impact significantly on rural unemployment in Nigeria. To effectively use FDI to reduce unemployment, the Nigerian government needs to create an enabling business environment, including favorable investment policies, streamlined regulatory procedures, and infrastructure development plans. Encouraging collaboration between foreign investors and local stakeholders, promoting technology transfer, and implementing strategies to enhance the skill levels of the local workforce are also important aspects to consider.

A Lost Frontier or a New Gateway to Global Climate Action? The Afghan Leadership and the Revival of Afghanistan’s Mineral Sector

Is Afghanistan a lost frontier? A superficial look might conform to this notion, given the continued state of unrest and instability, rampant hunger, malnutrition, illiteracy and unemployment. In this reflective discourse, however, we highlight a brighter (largely overlooked) aspect: her mineral reserves, estimated at nearly USD 1 trillion, including some of the world’s richest lithium and rare earth elements (REEs), with high market value and critical for global climate combat policymaking ( decarbonisation of infrastructure and attaining the net-zero target). By the same token, here, we offer a bird’s-eye view of the Afghan mineral wealth, with special emphasis on lithium and REE, which, if rightly harnessed, could be an engine of economic growth and national development. In its present state of operations, however, that future seems a distant myth as the Afghan mining/mineral sector is undermined by a web of interlocking systemic barriers, including (a) a totalitarian regime, (b) institutional bottlenecks, (c) a lack of social integration (human rights violation and neoliberal outlook) and (d) a lack of foreign investments. To that end, we reflect on the world experience of nations where mineral resources have become engines of economic growth and national development, which may inspire the present Afghan leadership. Rejuvenating the mining/mineral sector may help the leadership simultaneously advance towards multiple targets: (a) stabilising the economy, (b) meeting multiple UN Sustainable Goals, (c) helping mobilising nation- and peace-building efforts and (d) contributing to global climate action. Collectively, these may help redeem the lost reputation in the eyes of the international community and get rid of the economic sanctions. Here, we offer a vision to the present Afghan leadership to rejuvenate the mineral sector: (a) an enabling business environment ( increased ease of business and security), (b) a unified water-power supply framework ( hydropower development), (c) a participatory ecosystem ( an integrated social-ecological-technological framework) and (d) restricting illicit mineral trade ( enforcing rule of law and equity). To that end, we call for a data revolution to kickstart the systems’ thinking exercise (facilitating research, exploration and mineral processing).

Contribution of the Common Market for Eastern and Southern Africa in the Fight Against Poverty in Zambia Through Private Development and Promotion of Foreign Direct Investment

Background: This study was undertaken due to high levels of poverty in the Common Market for Eastern and Southern Africa (COMESA) Member States. The overall objective of the study was to explore the contribution of COMESA in the fight against poverty in Africa, a case study of Zambia from 2010-2021. The specific objective in this article was to explore the Contribution of the Common Market for Eastern and Southern Africa in fight against poverty in Zambia through private development. The study employed qualitative approach with an exploratory research design and critical case sampling to choose 13 key respondents to explore the contribution of the Common Market for Eastern and Southern Africa in Zambia through private sector development from 2010-2021. Primary data was analysed from 13 key respondents selected purposively using an interview guide to support secondary data. Data was analysed using thematic and content analysis. This study found that COMESA was established by a treaty in December 1994 as a basis for private sector development and promotion of foreign direct investment in the region with a view to create employment and income generating activities contributing to poverty alleviation. Zambia embarked on private sector development and promotion of foreign direct investment with the financial support from COMESA and its international cooperating partners of development. The study established that COMESA had been significant in the fight against poverty in Zambia. However, despite the trade reforms implemented, the study established that poverty levels in Zambia had not reduced since 2010 instead there had been an increase from 54.4 % in 2020 to 60.3 % in 2021. Zambia requires a clear regulatory framework predictable for business planning with a conducive legal business environment that promote the private sector and foreign direct investment with an enabling business environment and innovative policy framework targeting various sectors of the economy.

Effect of financial stability on new business establishments in Africa: does ease of doing business matter?

Purpose Given the relevance of entrepreneurship in nation-building, studies geared towards the promotion of new businesses are crucial. This study aims to contribute to the finance and entrepreneurship literature by providing empirical evidence on the role ease of doing business plays in promoting new business establishments amidst financial stability. Design/methodology/approach The study used the fixed and random effect estimation techniques as well as the impulse response function to analyse annual panel data covering 53 African countries. Findings The results indicate that regulatory quality and access to electricity promote new business establishments. Also, to experience the direct effect of financial stability on new business establishments or entrepreneurship in Africa, the role of the ease of doing business cannot be isolated. The policy implication is that the creation of an enabling business environment is crucial for new business establishments. Research limitations/implications The sample only includes countries in Africa. Future or further studies may want to expand the sample size and also consider a comparative analysis where this analysis will be done plus another region so that the differences in findings can be known. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the role of ease of doing business on new business establishments in the presence of financial stability in Africa.

Challenges and Prospect of Women Business Start Up in North Western Nigeria

This study aimed to explore the personality and environmental challenges and prospects faced by women in business start-ups in North Western Nigeria. A total of 273 female entrepreneurs were surveyed using a structured questionnaire. The data collected were analysed using the Statistical Package for Social Sciences (SPSS). The study found that lack of access to funding sources, legal and regulatory barriers, societal and cultural biases, lack of access to relevant information and technology and limited access to professional networks and mentors were the major environmental challenges faced by women in business start-ups. The study further revealed that women possess the confidence to take risks and pursue opportunities, handle stress and uncertainty, possess the ability to adapt to changing circumstances, communicate and negotiate with stakeholders, and possess the persistence and resilience necessary to overcome challenges in their business start-ups. The study recommends that the government, private organizations, and other stakeholders should work together to address the environmental challenges faced by women in business start-ups in North Western Nigeria by providing access to funding sources, mentorship, networking opportunities, and creating an enabling business environment.

UNLEASHING THE POWER OF INNOVATION: THE TRANSFORMATIVE ROLE OF SMES IN EU

This article explores the significant efforts made by the European Union (EU) to support small and medium-sized enterprises (SMEs) through a range of initiatives, policies, and programs, such as Horizon 2020 and COSME. These endeavors have provided dedicated funding and resources to facilitate research, development, and innovation within SMEs. Recognizing the significant role played by SMEs and innovation in driving economic growth, job creation, and competitiveness, the EU has prioritized targeted support and the establishment of an enabling business environment to unlock the full potential of SMEs as engines of innovation. Furthermore, the EU actively assesses SME innovation levels to identify areas of strength, weakness, and improvement. These concerted efforts demonstrate the EU's commitment to cultivating a culture of innovation and providing comprehensive support to SMEs in their entrepreneurial pursuits. Ultimately, these initiatives contribute to the overall innovation landscape in Europe, fostering sustainable growth and prosperity.

Resource Use Efficiency and Profitability Analysis of Catfish (Clarias gariepinus) Production in Kogi State, Nigeria

Understanding the resource use efficiency and profitability in catfish production is essential for maximizing productivity, minimizing environmental impact, and ensuring sustainable economic growth in the aquaculture industry. This study assessed the resource use efficiency and profitability analysis of catfish (Clarias gariepinus) production in Kogi State, Nigeria. Primary data obtained through questionnaire administration to one hundred and sixty (160) catfish farmers in the State were analysed using descriptive statistics, Cobb-Douglass production function, efficiency ratio, gross margin, and mean score from the Likert type of scale. The result showed that 68.12 percent of catfish farmers in the State were males in a productive age of 48 years. The major catfish farming practices/enterprise combination include; sole catfish farming (78.75 percent), fish cum vegetable (44.38 percent) and fish cum poultry (40.63 percent). Analysis of the resource use efficiency showed that fingerlings, labour and vaccines were underused while feed, pond and fuel were overused by catfish farmers in the State. The calculated gross margin among catfish farmers is N2, 110,136.01k with a profit of N1, 333,910.54k, indicating the net financial gain from the catfish production after deducting all costs. The benefit-cost ratio (BCR) is 1.32, suggesting that for every unit of cost invested in catfish production, there is a return of 1.32 units in revenue. The serious constraints faced by catfish farmers include; inadequate finance (mean score = 2.88), high cost of feed (mean score = 2.87), inadequate power supply (mean score = 2.66), cannibalism (2.42), inadequate processing experience (mean score = 2.32), and low market price (mean score = 2.21). Among others, the study recommended that, the State government should: implement policies that promote access to quality inputs, provide technical assistance and training to catfish farmers, facilitate market access, and create an enabling business environment.

Repositioning Small and Medium Scale Enterprises for Growth: Focus on Rural Women Entrepreneurs in Abia State, Nigeria

Entrepreneurship is a potential tool for economic transformation, considering the impact it has on employment, wealth generation, and spurring local entrepreneurship. Thus, women entrepreneurs the world over, have continued to contribute significantly to the growth and development of their economies through this medium. This paper assessed the ways in which rural women SMEs can be repositioned for maximum growth, based on two objectives: to examine the factors that affect rural women SMEs; and to ascertain the determinants of growth of rural women SMEs. The paper utilized survey research method, and deployed a structured questionnaire based on the 5-point Likert scale. 250 participants were drawn for the study, while face and content validity techniques were employed. Reliability rate was determined using Pearson’s Correlation Coefficient Statistical Procedure. Findings revealed that rural women entrepreneurs are plagued with challenges ranging from lack of quality education, poor state of infrastructure, ineffective credit system as well as a harsh business climate. As a result, factors such as improved market access, ensuring an effective value chain, increased competitiveness, enhanced market entry, quality education/skill acquisition, efficient credit system, adequate infrastructure, and a friendly and enabling business environment were advocated for. The paper recommended among others, the need for financial inclusion and efficient credit system for rural women to enhance the growth of their SMEs.

Globalization and the Industrial Sector Performance: The Nigeria Experience

Globalization is said to be a hallmark for modern economic growth and development. Since 1970, the volume of world trade has grown by around 7% yearly. The Nigerian industrial sector after experiencing boom in the first two decades after Nigeria’s independence, has suffered from low productivity afterwards. Therefore, this study examined the impact of globalization on Nigeria industrial sector performance from 1986 - 2017. The study utilized secondary data from the Central Bank Statistical Bulletin (CBN), and National Bureau of Statistics (NBS). The data were analyzed using Ordinary Least Squares (OLS), Error Correction Model, ADF Unit root test, Johansen Co-integration test, Cholesky variance decomposition test. The findings of this study show that “free-trade” which came as a result of globalization has a not impacted Nigeria industrial output enough to trigger economic growth and also, that Nigeria depends so much on imported products which have made the industrial sector weak and unable to compete with her foreign counterparts. The study also revealed that globalization has led to the stagnation of Nigeria’s Manufacturing index. This implies that the cost of globalization for Nigeria have outweighed its benefits, hence; the study concluded that globalization has done more harm than good to Nigerian economy. The study recommends that Nigeria should put in place an industrial policy which should create enabling business environment within the country by providing incentives to manufacturers, ensuring regular and uninterrupted power supply as well as promoting agriculture.

Saudi Arabia’s small and medium enterprises (SMES) sector post-Covid-19 recovery: stakeholders’ perception on investment sustainability

PurposeThe sound viability of small and medium enterprises (SMEs) positively influences nations’ economic growth. Studies investigating the impact of the Covid-19 pandemic on SMEs in Saudi Arabia (KSA) and how the owners will source for working capital and short-term loans to kick start in the post-Covid-19 recovery are scarce. Hence, this study aims to investigate the perceived negative impact of Covid-19 on SMEs and suggests policy solutions to improve access to finance and investment sustainability for the SMEs owners in the post-Covid-19 recovery via the stakeholders’ perception in KSA.Design/methodology/approachThe paper sourced data from Medina, Riyadh and Alqassim via virtual interviews. The study engaged SMEs owners, government agencies and banks within the covered regions in KSA. The sourced data were analysed via a thematic, and the results were presented in themes.FindingsThe findings show that the SMEs sector plays a pertinent role in KSA gross domestic product growth. But, the recent ravaging of the SME sector by the Covid-19 pandemic was adversely unprecedented, and stakeholders were caught unaware. The paper categorised the perceived impacts into most severe, severe and fairly severe. The findings show that SMEs sector post-Covid-19 recovery will require access to finance-friendly policies to revive the unique sector. This should be supported with an enabling business environment via policies that encourage investment and sustainability to achieve KSA Vision 2030.Research limitations/implicationsThe study is restricted to the impact of the Covid-19 pandemic on SMEs and data collected via virtual interviews across three cities in KSA. Other developing Islamic nations can modify the policy suggestions from this paper to improve their SMEs sectors.Practical implicationsThe significance of a robust SMEs sector to grow the economy has been established. The emerged recommendations from this paper may provide insights to the policymakers and other stakeholders. This will enhance the rebuilding of the SMEs sector across KSA in the post-Covid-19 era.Originality/valueThis study is unique because it investigated the impacts of the ravaging pandemic on SMEs owners and proffered possible solutions for quick post-Covid-19 recovery from the KSA stakeholders’ perspective.

Causal Relationship between Selected Financial Development Indicators and Economic Growth in Nigeria from 1985-2016

The study examines the causal relationship between selected financial development indicators and economic growth in Nigeria. The study used quarterly data from the statistical bulletin of the Central Bank of Nigeria from (1985Q1-2016Q4). The study employs Granger causality test and Vector Autoregressive (VAR) estimation techniques. The findings show a bidirectional causality between money supply to gross domestic product on real gross domestic product. There is also unidirectional relationship between private debt to total debt securities (domestic) on real gross domestic product while there is no causality between lending-deposits spread and liquidity ratio on RGDP. The study therefore recommends that government should further undertake financial reforms; build a robust infrastructure, legal system and an enabling business environment capable of attracting quality investments, promote real sector growth and development as well as job creation and economic growth. Government should also introduce policies aimed at enhancing financial inclusion and boosting financial access in Nigeria. Attention should be given to the money supply in the economy to ensure that the money in circulation is within the growth target in order to achieve price stability and accelerated growth.

Ease of Doing Business Reforms and Business Growth Among Selected Micro, Small And Medium Enterprises (MSMEs) in Present Day Nigeria: a Hierarchical Multiple Regression Modelling Approach

This article examines how operators of Micro, Small and Medium Enterprises (MSMEs) in the Lagos, Nigeria perceives the impact of the ease of doing business reforms, as crafted by the Presidential Enabling Business Environment Council (PEBEC) on their businesses. This article utilises the survey approach and the hierarchical linear modelling technique for analysis. Measures of ease of doing business topics used in this study include starting a business, getting credit, getting electricity and registering property. Others are, tax payment, entry and exit of people and construction permits. These components of ease of doing business reforms were analysed from the perception of the MSME operators, with a view to determining the factors to be considered by government for improving the business regulatory environment. Results revealed that whilst operators are confident that the reforms have impacted revenue growth and cost reduction, particularly through getting credit, getting electricity and registering property, the same could not be said for employment generation. From these findings the authors suggest that whilst government may yet find plenty of room to operate in to improve the modalities for starting businesses, tax payment, movement of business persons into and out of the country, and processing of construction permits, MSME operators, just as much as government, still have their bit to do by ensuring that as businesses are empowered, they become more socio-economically responsible

Assessing the Relationship Between Multilevel Marketing and Employment Reduction in Ondo State, Nigeria

This research investigated the effect of multilevel marketing on unemployment reduction in Akure, Ondo State. Primary data collected from one hundred and seventy five (175) respondents of Longrich distributors/partners were used for the analysis. The study employed a multiple regression model. The result of the regression analysis revealed that there is a direct and significant relationship between multi-level marketing and employment opportunities in Akure, Ondo State. The study concluded that that unemployment will be reduced if Multi-level marketing patronage is sustained. Finally, the study recommended, among others, that since there is a positive relationship between MLM and employment reduction, government should create enabling business environment for the companies using multilevel marketing strategy in order to bring more on board for investment to generate further employment. Keywords: Multi-level Marketing, Unemployment, Distributors, Partners, Patronage. DOI: 10.7176/EJBM/13-21-07 Publication date: November 30 th 2021

Strategy and results of managing the formation of an enabling enterprise environment in the conditions of digital transformations

Enterprises need an enabling environment to function and develop steadily. The macro level determines the comfort factors in the context of global transformations. In addition, domestic enterprises have limitations in their own funds to carry out transformations, in particular, digitalization. This was most acutely manifested in the context of the COVID-19 pandemic. In such a situation, state support for entrepreneurial structures is a driver for the formation of an enabling business environment. This is especially noticeable if it is carried out on the basis of strategic territorial management. This work is carried out in order to identify the actual results of strategic management at the regional level in the formation of an enabling environment for the enterprise functioning and development in the context of digitalization, as well as to present proposals for improving the quality of the achieved results. The research is based on the works of domestic and foreign scientists. The analysis showed the focus of the strategic management of the Republic of Crimea on the formation of an enabling enterprise environment. Currently, a system of enterprise support is being created in the region. Its various forms and types act favorably in Crimea. It is necessary to provide training of personnel with appropriate qualifications. In addition, the coordination and consistency of measures to implement the republican strategies of "Three Wins" and the digital transformation of the region, in terms of creating an enabling enterprise environment, will improve the quality of the achieved results.

Responsiveness of Service Sector Growth to Financial Development in Nigeria: Evidence from 1981-2019

Purpose: This paper explores the relationship between financial development and output of the service sector in Nigeria over the period 1981-2019. It presents an analysis of the long-run and short-run impacts of financial development on the performance growth of the service sector, as well as the cointegration between the variables. Approach/Methodology/Design: We test the time series for stationarity using Phillips-Perron and Augmented Dickey-Fuller unit root tests. We adopt the Auto-Regressive Distributed Lag (ARDL) approach to analyze the relationship between financial development and service sector performance in Nigeria. Market capitalization, monetization ratio, and the ratio of credit to the private sector to GDP represent the indicators of financial development. Findings: The results of the study show that market capitalization and monetization ratio have significant positive impacts on service sector output, respectively. However, the effect of credit to the private sector on service sector performance is insignificant and negative. We find no cointegration among the investigated variables; while, the result of the error correction estimation indicates that it takes about two years to restore the long-run equilibrium after a deviation. In light of the findings made, this paper concludes that financial development exerts a significant positive effect on service sector performance in Nigeria. Practical Implications: This study is valuable at this period of economic uncertainties in Nigeria. With input from this paper, policymakers in the public sector via the formulation and implementation of effective policy measures such as fiscal measures can channel the benefits of financial sector development to the service sector to create an enabling business environment for the sector, especially as it concerns the provision of private credit to the sector. Originality/value: Based on literature review, this paper for the first time investigated the link between financial development and the performance of the service sector in Nigeria as defined by the CBN Statistical Bulletin 2019 edition.

Measuring digital transformation impact in Jordan: A proposed framework.

The digital transformation vision (REACH 2025) is essential for transformation and enabling individuals, sectors, and companies in Jordan to adopt digital solutions and build a robust ground in conducting business. The government in Jordan launched the REACH2025 Vision in 2016, and it has taken many serious measures to bring sectors, companies, and individuals to virtual digital by 2025. This government's vision consisted of seven dimensions (Smart Specialization and demand-driven innovation, Public Sector Innovation, Tech Start-ups and Entrepreneurs, ICT Skills, Capacity and Talent, Enabling Business Environment, Smart digital economy infrastructure, and Governance), and 18 actions to implement over ten years. The researchers used these dimensions to build a framework to measure the impact of government progress on enabling individuals, sectors, and companies, on productivity, and encouraging investment. The researchers used a sample of 196 respondents from various disciplines to figure out attitudes and evaluate government actions. The researchers also used responses to validate the proposed theoretical framework in the components of the digital economy. The results revealed positive attitudes towards the development and implementation, and excellent in some areas, while some measures need strengthening and re-evaluation. The study recommended employing the proposed framework to measure the actual impact of the digital transformation. The study also advises leading future research towards further empirical examination to validate the framework proposed.

Measuring digital transformation impact in Jordan: A proposed framework.

The digital transformation vision (REACH 2025) is essential for transformation and enabling individuals, sectors, and companies in Jordan to adopt digital solutions and build a robust ground in conducting business. The government in Jordan launched the REACH2025 Vision in 2016, and it has taken many serious measures to bring sectors, companies, and individuals to virtual digital by 2025. This government's vision consisted of seven dimensions (Smart Specialization and demand-driven innovation, Public Sector Innovation, Tech Start-ups and Entrepreneurs, ICT Skills, Capacity and Talent, Enabling Business Environment, Smart digital economy infrastructure, and Governance), and 18 actions to implement over ten years. The researchers used these dimensions to build a framework to measure the impact of government progress on enabling individuals, sectors, and companies, on productivity, and encouraging investment. The researchers used a sample of 196 respondents from various disciplines to figure out attitudes and evaluate government actions. The researchers also used responses to validate the proposed theoretical framework in the components of the digital economy. The results revealed positive attitudes towards the development and implementation, and excellent in some areas, while some measures need strengthening and re-evaluation. The study recommended employing the proposed framework to measure the actual impact of the digital transformation. The study also advises leading future research towards further empirical examination to validate the framework proposed.

Domestic Investment, Foreign Direct Investment and Macroeconomic Stability in Nigeria

This study examines the relationship between the two major investment components (domestic investment and foreign direct investment) and macroeconomic stability in Nigeria. In order to capture the macroeconomic stability, some selected macroeconomic variables are presented, namely: real GDP growth rate (RGDPgr), trade openness (TOP), exchange rate (EXR), inflation rate (INFR), interest rate (INTR), private sector credit (PSC) which represent domestic variables and world oil price (WOP) which represent foreign variable. The study employs Johansen cointegration and Vector Autoregressive model as the estimation techniques. Findings from the study reveals that there is no long-run relationship between the selected macroeconomic variables and the two investment variables. The study also reveals that shocks and fluctuations from real GDP growth rate (RGDPgr), private sector credit (PSC), inflation rate (INFR), interest rate (INTR), exchange rate (EXR) and world oil price (WOP) strongly and significantly affect domestic investment in Nigeria; while the shocks and instabilities arising from real GDP growth rate (RGDPgr), inflation rate (INFR), interest rate (INTR), exchange rate (EXR), trade openness (TOP) and world oil price (WOP) majorly and significantly affect foreign direct investment in Nigeria during the period under review. The study therefore recommends that Nigerian government should provide stability measures in all the aforementioned macroeconomic indicators, as this will attract a higher level of FDI and this will create an enabling business environment for domestic investment to operate.