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Published:
Apr 1, 2024Updated:
2024-04-01Keywords:
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Impact of Foreign Direct Investment Inflows on Nigeria's Economic Performance (1981 to 2020)
Abstract
The ARDL was used in this study to examine the impact of foreign direct investment inflows on Nigeria's economic performance from 1981 to 2020. The analysis starts with examining the stationarity of the data set using the Augmented Dickey-Fuller (ADF) unit root test. The Bounds test confirmed the existence of a negative association between FDI and the economy in the long run while in the short run, Portfolio Investment and Balance of Trade had a negative relationship on the economy and FDI maintained a positive relationship with the economy. Therefore the recommendations from this study are as follows Firstly, the government should ensure that the right economic and political environment is put in place for there to be some meaningful inflow of portfolio investment, secondly, the authorities in control should evaluate Nigeria's ease of doing business; currently, Nigeria ranks low; a higher ranking will encourage increased foreign involvement by bringing more FDI to Nigeria and thirdly government needs to grow the real sector of the economy. This will encourage export earnings, and improve our trade balance.
