Thesis Abstract

Abstract
Foreign Direct Investment (FDI) has been a significant source of external finance for developing countries like Nigeria. This study aims to assess the impact of FDI on the economic growth of Nigeria from 1990 to 2011. The research employs a quantitative research design utilizing secondary data collected from the World Bank and the Central Bank of Nigeria. The data is analyzed using econometric techniques such as the Autoregressive Distributed Lag (ARDL) approach to cointegration and Vector Error Correction Model (VECM). The results of the study indicate a positive and statistically significant relationship between FDI and economic growth in Nigeria over the period under consideration. The findings suggest that FDI inflows have had a stimulating effect on the Nigerian economy, leading to increased GDP growth rates. The study also reveals that FDI has contributed to technology transfer, human capital development, and increased productivity in various sectors of the Nigerian economy. Furthermore, the research highlights the importance of creating a conducive investment climate and implementing policies that attract and retain FDI inflows. It underscores the need for stable political and economic environments, infrastructure development, and institutional reforms to maximize the benefits of FDI on economic growth. The study recommends that the Nigerian government continue to pursue policies that promote FDI inflows, including tax incentives, investment guarantees, and streamlined regulatory procedures. In conclusion, the findings of this research support the argument that FDI plays a crucial role in driving economic growth in Nigeria. The study contributes to the existing literature by providing empirical evidence of the positive impact of FDI on the Nigerian economy. It also offers valuable insights for policymakers, investors, and other stakeholders on the strategies needed to harness the full potential of FDI for sustainable economic development. Further research could explore the sectoral impact of FDI, the quality of FDI inflows, and the long-term implications of FDI on income distribution and poverty alleviation in Nigeria.

Thesis Overview

This study assess the impact of Foreign Direct Investment in Nigerian economic growth over the period of 1990-2011. Data from Central Bank of Nigeria (CBN) Statistical Bulletin was used. The Ordinary Least Square (OLS) technique was specified and used to examine the relationship between the variables which includes the Gross Domestic Product as the dependent variable, export, Exchange rate, foreign direct investment and trade openness as the independent variables.

The explanatory power of the model was given by the R2 of 85.5% and was subjected to t-test and f-test to test the significance of the independent variables.

CHAPTER ONE

1.0        INTRODUCTION

1.1        BACKGROUND OF THE STUDY

Investors’ decisions and actions globally are influenced significantly by the dictates of self-interest which suggests that capital, not only be channeled to high-yielding economic sectors but also to those that are ostensibly quick yielding economies. On balance therefore investors would spun profitable opportunities characterized by extreme competitions, market glut, unfavorable regulation, long gestation periods and opt instead for investments that yield high returns within the shortest time possible. Base on this view, investors generally migrate from

one economy to another in search of better investment climate and higher returns.

This form of capital movement results in the creation of a typical investment called Foreign Direct Investment. In the opinion of Jomo (1988) Foreign Direct Investment can be explained to represent the flow of tangibles from a country abroad of capital, equipment and other production and processing facilities.