Impact analysis of foreign capital inflows on Nigeria’s economic growth

The study analysed the influence of Foreign Capital Inflow on Economic Growth in Nigeria from 1985 to 2021 with Autoregressive Distributed Lag (ARDL) model approach. The ARDL-ECM speed of adjustment suggests that around 93% of the imbalance from the previous period is corrected and brought back to equilibrium in the current period. FDI and Official Development Assistance produce significant positive effects on Economic growth in short and long-run periods. Portfolio Foreign Investment (POFI) significantly affects Economic Growth Rate (EGRR) in negative ways throughout the short-term and long-term. Both Exchange Rate (ECXR) and Inflation Rate (INFR) negatively affect Economic Growth Rate (EGRR) in the short term butwhereas External Debt (EXTD)has a negligible negative impact on EGRR in both the short and long term. However, over time, ECXR has a positive but small impact on EGRR, while INFR has a negative and large impact on EGRR. The research suggest that in order to promote investment in Nigeria, the government should establish a favourable environment by refraining from imposing excessive taxes on businesses and enterprises. Additionally,any EXTD incurred by the government should be directed solely towards productive investments, particularly in infrastructure and capital projects.