AN INVESTIGATION INTO IMPACT OF FOREIGN DIRECT INVESTMENT ON NIGERIA'S ECONOMIC GROWTH

This study examined the impact of Foreign Direct Investment (FDI) and foreign exchange rate (FXR) on Nigeria's economic growth using 24 years of annual time series data (1999-2022) from the World Development Indicators (WDI). Employing an ex-post facto design, the research analyzed effects of FDI and FXR on GDP growth rate. While stationarity was achieved for the variables, they were not integrated of the same order, indicating absence of a long-run relationship. Autoregressive Distributed Lag (ARDL) estimations were used to analyze modified models. Findings revealed a negative and insignificant impact of FDI on GDP growth, while FXR exhibited a negative but significant impact. These findings imply that FDI and FXR may not have contributed to economic growth due to factors such as corruption, poor infrastructure, insecurity, and currency devaluation. The study suggests that FDI can significantly contribute to economic growth in Nigeria if the government addresses infrastructure bottlenecks, fosters effective technology transfer and knowledge sharing, and improves the business environment for investors. This research, conducted in Nigeria using the ARDL model, aligns with findings from studies in South East Asia, Kenya, and South Africa, while contradicting studies in Tanzania and previous Nigerian studies.