Title: | Impact of International Finance on Economic Growth in Nigeria |
Author(s): | E. Nyeche, S.N. Amadi & M.C. Kalagbor |
Abstract: | The study investigated the effects of international finance on economic growth in Nigeria between 1980-2021. The explanatory variables or regressors for the model were Foreign Direct Investment (FDI), Foreign Personal Remittance (FPR), Foreign Aid (FA) and Portfolio Investment (PI) respectively while Gross Domestic Product Per Capita (GDPC) was the dependent variable. Time series data for the variables were obtained from Central Bank of Nigeria Statistical Bulletin, World Economic Outlook (WEO) and National Bureau of Statistics (NBS). Descriptive statistics, Unit Root tests, bounds co-integration test, autoregressive distributive lag (ARDL) technique, error correction model (ECM) and granger causality test were employed for estimation. The long run ARDL results showed that FDI has a positive but not statistically significant impact on Nigerian economic growth; FPR showed a negative and not statistically significant impact on economic growth in Nigeria; FA showed a positive and not statistically significant impact on economic growth in Nigeria; and the PI showed a negative and not statistically significant impact on economic growth. Based on the findings, the study concluded that only FDI and FA were found to contribute to the Nigerian economic growth. The study recommends that government should implement policies that will increase the ease of doing business and provide support services like investment promotion agencies to assist foreign investors to make Nigeria more attractive to foreign investors. Additionally, government should improve market access by entering into trade agreements to make Nigeria an investment hub for portfolio investments too. Finally, government should create a consistent regulatory framework and avoid frequent changes in policies that can create uncertainty and deter investment. |
Keywords: | Foreign Direct investment, Foreign personal remittance, Foreign Aid, Portfolio Investment, GDP Per C |
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