Inflows of Foreign Direct Investment in Selected Sectors and Economic Growth in Nigeria
- October 27, 2018
- Posted by: RSIS
- Category: Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue X, October 2018 | ISSN 2454–6186
Ekine, Data Irene, Nnadi, Emmanuel Uchenna
Department of Agricultural and Applied Economics, Faculty of Agriculture, Rivers State University, Port Harcourt, Nigeria
Abstract:-This study examined the inflows of foreign direct investment in selected sectors and economic growth in Nigeria from 1980-2015. The objectives of the study were to examine the impact of foreign direct investment in both manufacturing and telecommunication sectors on economic growth in Nigeria. A growth model was estimated via the co-integrated and ECM techniques to establish the relationship between the inflow of FDI in manufacturing and telecommunication sectors and economic growth (GDP). The variables were tested for stationarity via the ADF unit root test and found to be stationary. Also, the co-integration carried out using the Johansen co-integration technique showed that the FDI in both manufacturing and telecommunication sectors have a long run relationship with economic growth in Nigeria. The long run regression results depicted by the ECM reveal that there is a positive and significant relationship between foreign direct investment in telecommunication sector and economic growth. Also, foreign direct investment in manufacturing sector and economic growth were positively related. Thus, it was concluded that continuous inflow of foreign direct in manufacturing and telecommunication sectors has the tendency to induced Nigeria economic growth. Based on the findings, the study recommended the need for consistency in government policies directed specifically towards improving the business environment to attract foreign investors which will in turn impact positively on economic growth.
Key Words: Economic Growth, FDI, Inflows, Sectors, Manufacturing and Telecommunication
The growth and development of any economy is usually seen in terms of sectors. These are primary, manufacturing and services sectors. Sustainable and improved productivity in the various sectors in the economy and their effects on macroeconomic goals have been very important issues over the decades. Thus, during the military and civilian administration, the government of Nigeria has taken a number of measures necessary to woo foreign investors into the various sectors of the Nigerian economy. These measures includes the abolishment of unfavourable laws that affect the growth of foreign investment, promulgation of investment law, several overseas tours for image laundry by the president, among others (Obayori, 2014).