Impact of Macroeconomic Instability on Foreign Direct Investment (FDI) in Nigeria: An Analysis of GlaxoSmithKline, Kimberly-Clark, and Procter & Gamble (P&G) Exits

This study explores the impact of macroeconomic instability on Foreign Direct Investment (FDI) in Nigeria, with a particular focus on the recent exits of popular multinational corporations such as GlaxoSmithKline, Kimberly-Clark, and Procter & Gamble. FDI contributes significantly to the economic growth of developing countries like Nigeria driving industrialization. The research investigates the influence of key macroeconomic variables, including inflation and exchange rate volatility, on FDI inflows between 2013 and 2022. Using a mixed-methods approach which combines qualitative and quantitative techniques, the study employs Ordinary Least Squares (OLS) regression, correlation analysis, and case study analysis to understand the relationship between macroeconomic instability and FDI trends. These selected multinational corporations provide more insights into the factors influencing their decision to exit the Nigerian market. The findings reveal that exchange rate volatility has a more significant negative impact on FDI inflows compared to inflation, which suggests that frequent and unpredictable fluctuations in the value of the Nigerian naira play a vital role in investors’ confidence and inform their decision-making. The study concludes with policy recommendations to stabilize Nigeria’s macroeconomic environment. These recommendations are targeted at creating an investor-friendly climate to retain existing investors and to attract foreign direct investments into the country ultimately contributing to the country’s economic growth and development.