Title: Foreign Direct Investment, Domestic Capital Formation And Economic Growth Of Nigeria
Authors: OKE Michael Ojo, and OGUNMOKUNWA Adejoro Joshua
Volume: 9
Issue: 8
Pages: 204-210
Publication Date: 2025/08/28
Abstract:
This study examined the effect of foreign direct investment and domestic capital formation on economic growth of Nigeria. Data were extracted from CBN bulletin, 2023 covered the period from 1986-2023. The study employed descriptive statistics coupled with autoregressive distributed lag (ARDL). The results revealed that foreign direct investment exhibited an insignificant positive impact on economic growth while the impact of gross capital formation is significant and positive. Similarly, it was revealed that exchange rate and inflation rate showed an insignificant negative impact on economic growth. Based on the findings, the study recommended that for inflow of foreign direct investment to be more harnessed and contribute meaningfully to the economy, Nigerian government should embark on selective investment criteria among foreigners and focus on investment that can contribute maximally to the economy. More so, efforts should be geared toward encouraging capital formation within the economy as this will reduce overreliance on foreign investors.