THE IMPACT OF FOREIGN DIRECT INVESTMENT ON THE NIGERIAN ECONOMY

Author: Ekeghalu Chineme Johnpaul
Department: Banking and Finance
Affiliation: Nnamdi Azikiwe University Awka

The study examines the impact of Foreign Direct Investment (FDI) on economic growth in Nigeria. The ordinary least square (OLS) simple regression model was the estimation technique employed to determine the relationship between the dependent variables, namely the gross domestic product, export and infrastructure and the Independent variable which was defined as foreign direct investment. Secondary data were collected for the period 1985 to 2010. These hypotheses were tested in null form viz FDI has no significant and positive impact on GDP, FDI has no significant and positive impact on export and FDI has no significant and positive impact on infrastructure. Using the T test model in testing the hypothesis; it was revealed that FDI has a positive and significant impact on GDP, Export and Infrastructure. It could therefore be concluded that foreign direct investment (FDI) impacts positively in accelerating economic growth in Nigeria. The study recommended among other things that government should strive to create a conducive business environment to encourage steady inflow of FDI so as to enhance national GDP, exportation of goods and infrastructural development for economic growth.

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