DOES FOREIGN DIRECT INVESTMENT MATTER FOR NIGERIAN ECONOMY?

Main Article Content

CYPRIAN CLEMENT ABUR
TOMIWA AJEWOLE
TORRUAM JAPHETH TERANDE

Abstract

Foreign direct investment has always been acknowledged as one of the sources of economic growth of a country as it has been noted to have a positive and significant relationship with economic growth. However, the FDI inflow and the economic growth of Nigeria seem to be operating inversely in the current decade. This study examines the impact of foreign direct investment in the economic growth of Nigeria between 2007 and 2017 as it is believed that the impact of FDI is location and period-specific. Regression analysis was carried out using time series secondary data. The model specification for the regression analysis was derived from the Solow growth model. The results of the analysis revealed all independent variables having a positive relationship with economic growth for the scope of the study but with only FDI being statistically insignificant to the economic growth of the country during the period. The R2 of the model was 0.96 implying that 96% of the variations in economic growth can be explained by the model. The study, therefore, recommends that to make sure foreign direct investment trickle down Nigeria’s economy; the flow of FDI into the economy has to be monitored and influenced to direct it into sectors that need massive investment in the country such as the Agricultural sector which has been noted over the years for its failure or inability to attract foreign direct investment and whereas the sector is the first point of contact if Nigeria is to enjoy sustained economic growth.

Keywords:
Economic growth, foreign direct investment, exogenous, sector, productivity

Article Details

How to Cite
ABUR, C. C., AJEWOLE, T., & TERANDE, T. J. (2020). DOES FOREIGN DIRECT INVESTMENT MATTER FOR NIGERIAN ECONOMY?. Journal of Economics and Trade, 5(1), 18-24. Retrieved from https://ikprress.org/index.php/JET/article/view/5065
Section
Original Research Article

References

Zakari A. The role of Nigerian investment promotion commission (NIPC) in attracting foreign direct investment in Nigeria”, European Scientific Journal. 2012;8(7):149-161.

Odhiambo NM, Mahembe E. Foreign direct investment and economic growth: A theoretical framework. Journal of Governance and Regulation. 2014;3(2):63-68.

Okon JU, Augustine OJ, Chuku AC. Foreign direct investment and economic growth in Nigeria: An analysis of the endogenous effects. Current Research Journal of Economic Theory. 2012;53-66.

Okoye LU, Nwakoby CI, Okorie UE. Deregulating the Nigerian economy for enhanced real sector growth. Journal of Policy and Development Studies. 2016;10(2):144-158.

Oyeleke F. Structure of Nigerian economy (CC307); 2016.

Olusanya SO. Impact of foreign direct investment inflow on economic growth in a pre and post deregulated Nigeria economy. A Granger Causality Test. European Scientific Journal. 2013;9(5):335-356.

Adegbami BO. Foreign direct investments and economic growth in Nigeria: A disaggregated sector analysis. Journal of Economics and Sustainable Development. 2012;3(10):66-75.

Adeleke KM, Olowe SO, Fasesin OO. Impact of foreign direct investment on Nigeria economic growth. International Journal of Academic Research in Business and Social Sciences. 2014;4(8):234-242.

Taiwo JN, Achugamonu BU, Okoye O, Agwu ME. Foreign direct investment: Catalyst for sustainable economic development in Nigeria. Saudi Journal of Business and Management Studies. 2017;2(2):70-81.

Adigun AO. Sectoral inflow of foreign direct investment and economic growth in Nigeria. Journal of Economics and Sustainable Development. 2015;6(17):166-172.

Ako RM. Foreign direct investment and sustainable development: The Nigerian recession in perspective. International Journal of Innovative Research in Social Sciences and Strategic Management Techniques. 2018;5(1): 43-54.

Asogwa FO, Osundu MC. The impact of foreign direct investment on economic growth in Nigeria. IOSR Journal of Economics and Finance (IOSR-JEF). 2014;3(5):37-45.

Ayanwale AB. FDI and economic growth: Evidence from Nigeria. African Economic Research Consortium, Nairobi; 2007.
[ISBN: 9966-778-09-8]

Blessing EN, Thom-Otuya. President Goodluck Jonathan’s transformation agenda and Nigeria’s foreign policy. Social Science Review. 2015;1(1):23-34.

Emmanuel IJ. Effect of foreign direct investment on economic growth in Nigeria. European Business and Management. 2016; 2(2):40-46.

Lipsey RE. Home- and host-country effects of foreign direct investment. National Bureau of Economic Research. 2004;334-382.
[ISBN: 0-262-03615-4]

Egbo OP. An analysis of foreign direct investment inflow and economic growth in Nigeria. Department of Banking and Finance Faculty of Business Administration, University of Nigeria Enugu Campus; 2010.

Otto G, Ukpere WI. Foreign direct investments and economic development and growth in Nigeria. Mediterranean Journal of Social Sciences. 2014;5(2):713-720.

Opusunju MI, Udo FS, Jiya NS. Impact of foreign direct investment on economic growth in Nigeria. International Journal of Advanced Studies in Business Strategies and Management. 2015;4(1):33-44.

Akiri SE, Vehe BM, Ijuo OA. Foreign direct investment and economic growth in Nigeria: An empirical investigation. IIARD International Journal of Economics and Business Management. 2016;2(5):55-66.

Adigwe PK, Ezeagba CE, Francis NP. Effect of foreign direct investment on Nigerian economic growth. European Journal of Research and Reflection in Management Sciences. 2015;3(5):28-33.

Ugwuegbe SU, Okore AO, Onoh JO. The impact of foreign direct investment on the Nigerian economy. European Journal of Business and Management. 2013;5(2):25-33.

Ogbonna IC, Nwokoye ES, Uwagomogu NR, Nzeribe G. Economic growth and foreign direct investment in Nigeria: An empirical investigation. Journal of Economics and Sustainable Development. 2012;3(13):34-40.
[ISSN: 2222-1700]
[e-ISSN: 2222-2855]

Umeora CE. Effects of foreign direct investment (FDI) on economic growth in Nigeria. Electronic Journal. 2013;1-14.

Olokoyo FO. Foreign direct investment and economic growth: A case of Nigeria. Bvimsr’s Journal of Management Research. 2012;4(1):1-29.