Effect of Foreign Direct Investment on Nigeria’s Economic Growth

Abstract

Foreign Direct Investment has been held to provide developing nations including Nigeria with much needed capital for economic growth, Part of Foreign Direct Investment is the inflow of up to date technology and management skill. This paper investigates the effect of FDI on selected macro-economic variables of GDP, inflation and exchange. The study employed Secondary source of data from the Central Bank of Nigeria statistical bulletin covering the period of 1986 to 2017. It used the Least square to examine the relationship between the dependent and the independent variables. The findings of the study reveal at the probability of interest rate at 27.27% that Foreign Direct Investment has significant effect to economic growth of Nigeria. Also, inflation rate and exchange rate were significant to influence the economic growth of Nigeria. The study therefore recommend that Government should re-strategies her policy by continuous improvement of business environment through the provision of the necessary infrastructure which will reduce the cost of doing business, increase productivity and enhance technological transfer and skill acquisition in Nigeria.