This Paper Investigates the Impact of Foreign Direct Investment (FDI) on Nigerian Economy from 2001- 2022
DOI:
https://doi.org/10.59890/ijgsr.v3i9.74Keywords:
Foreign Direct Investment (FDI), Nigerian Economy, GDP Growth, Infrastructural and Political StabilityAbstract
This study investigates in “Impact of Foreign Direct Investment (FDI) on Nigerian Economy from 2001 to 2022”, using various economic methods including regression analysis and multiple regression models. The findings reveal that FDI positively influences Nigeria’s trade balance, with regression results showing a significant positive coefficient, suggesting enhanced export capabilities and reduced import dependencies. The analysis also confirms that FDI significantly contributes to Nigeria’s GDP growth, supporting the view that foreign investments drive economic activities and enhance productivity. Conversely, FDI’s impact on employment was not significant, suggesting that FDI in Nigeria might be more capital-intensive than labour-intensive. This emphasizes the need for policies that encourage investments in labor-intensive sectors to boost employment. Additionally, the effectiveness of FDI in Nigeria is significantly influenced by infrastructural quality and political stability, as indicated by the significant coefficients for these factors in the multiple regression analysis. Infrastructural challenges and political instability hinder the positive impacts of FDI, highlighting the necessity of improving infrastructure and ensuring political stability to maximize the benefits of foreign investments. Regulatory quality, however, did not show a significant impact of FDI effectiveness, suggesting that while regulatory frameworks are important, and their current state might not ne the primary barrier compared to infrastructural and political factors. While FDI positively impacts Nigeria’s trade balance and GDP growth, its effects on the agricultural sector and employment are less direct and significant. The study underscores the need for comprehensive strategies addressing infrastructural and political challenges to fully leverage the benefits of foreign investments
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