Impact of foreign private investment on the Nigerian economy

Abstract

This paper studies the impact of foreign private investment on the Nigerian economy, based on empirical investigation using quarterly time series data from 1981Q1 to 2018Q4. The time series properties of the data were examined, using unit root test, co-integration test and error correction modelling method. All variables used were found to be co-integrated and the ECM was statistically significant at the 5% level. The coefficient of the ECM which indicates the speed of adjustment in the short-run disequilibrium is adjusted at a very low level per period, the empirical results obtained were highly significant, while the adjusted coefficient of multiple determination systematically explained the fact that foreign private investment is highly needed in less developing economies especially the Sub-Saharan Africa, Nigeria in particular to boost the growth in economic development. The empirical findings have implications for policy, these include the need to encourage better macroeconomic environment. Fiscal, monetary and exchange rate policies, property rights protection, strong, financial sector should be supported and sustained by government. Infrastructure facilities, that is, social and economic should be provided by the government, while corruption level should be checked in order to attract the needed foreign private investment to the Nigerian economy.