The Impact of Foreign Direct Investment On Economic Growth In Nigeria

Abstract

This study examines the impact of foreign direct investment on economic growth in Nigeria during the period 1976 – 2006, using the two-stage least squares (2SLS) method of simultaneous equation model.  The findings of the study revealed a negative relationship between economic growth proxied by Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) as a result of insufficient FDI flow into the Nigerian economy.  It is therefore, recommended that Nigeria should encourage domestic investment to accelerate growth rather than relying on FDI as a primer mover of the economy and develop a code of conduct on FDI to curb the restrictive business practice of multinationals and limit their repatriation of profits from Nigeria.

Keywords: Foreign Direct Investment, Economic Growth, Nigerian Economy.