IMPACT OF FOREIGN INVESTMENT INFLOWS ON ECONOMIC GROWTH IN NIGERIA (2005-2022)

Abstract

This study examined the impact of foreign investment inflows on economic growth in Nigeria for the period 2005-2022. The specific objectives of the study were to: determine the impact of foreign direct investment on the economic growth in Nigeria, investigate the impact of foreign portfolio investment on the economic growth in Nigeria, and examine the impact of foreign loan on the economic growth in Nigeria. The study used time series data sourced from the CBN statistical Bulletin. The study adopted the Ex post facto research design and employed the Vector Error Correction Mechanism(VECM) method to analyze the results. The empirical result indicated that foreign direct investment has positive significant impact on the gross domestic product of Nigeria, foreign portfolio investment has significant negative impact on the gross domestic product in Nigeria, and foreign loan has significant positive impact on the gross domestic product in Nigeria. The policy recommendations following the findings are: government should ensure a good ease of business in order to attract more direct investments into the country, this will enhance the performance of the economic sectors and improve aggregate output, and there is need to improve trade especially export trade.