Impact of Foreign Direct Investment Inflows on Economic Performance in Nigeria
$ 45.5
Description
Foreign Direct Investment (FDI) is widely regarded as an important source of capital, technology, knowledge and productive capacity for developing economies. For Nigeria, where domestic resources may be insufficient to meet the demands of economic transformation, attracting and effectively utilising foreign investment remains an important policy concern. Impact of Foreign Direct Investment Inflows on Economic Performance in Nigeria examines how foreign direct investment inflows affect Nigeria’s economic performance and whether these effects are sustained over time. Using annual data from 1980 to 2023 sourced from the World Development Indicators, the study applies the Autoregressive Distributed Lag (ARDL) model to examine both short run and long run relationships, complemented by Granger causality analysis to investigate the direction of influence between FDI and economic performance. The findings reveal a statistically significant positive relationship between FDI inflows and economic performance, measured by GDP per capita, in both the short run and long run. The study also establishes a long run relationship among FDI, mobile cellular subscriptions, inflation, real interest rates and trade related variables. Importantly, the causality analysis indicates a unidirectional relationship running from FDI to economic performance. Beyond establishing the FDI and economic performance relationship, the book highlights the broader conditions required for foreign investment to generate meaningful economic benefits. It examines the roles of infrastructure, digital connectivity, macroeconomic stability and trade in services and provides practical policy recommendations for improving Nigeria’s investment environment. The book advocates stronger infrastructure, targeted investment incentives, improved monetary and macroeconomic stability, expanded mobile network coverage and greater development of Nigeria’s service exports. It offers useful insights for policymakers, researchers, students, investors and anyone interested in foreign investment and Nigeria’s economic development.