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Constraints to Foreign Direct Investment: The Nigerian Experience (1980 - 2015 )

Achugamonu, Bede U. and Ikpefan, Ochei Ailemen and Okorie, Uchechukwu Emenas (2016) Constraints to Foreign Direct Investment: The Nigerian Experience (1980 - 2015 ). In: 3rd International Conference On African Development Issues (CU-ICADI), May 9- May 11 2016, Covenant University, Ota, Nigeria.

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Abstract

Foreign Direct Investment is considered as an invaluable tool for achieving economic growth in developing countries. In order to achieve the objective of a higher rate of economic growth and the efficiency in the utilization of resources, developing countries the world over have embarked upon various policy measures at attracting FDI. The study is an empirical investigation (using a time series data between 1980-2015) into the factors that constrain the inflow of FDI into the Nigeria economy. The Phillip Perron (PP) unit root test was used to test stationarity of the variables, Johansen Co-integration approach was conducted to test for long run relationship between the variables used, Vector Error Correction Model was used to establish the short run dynamics and the long run relationship as well as ascertain the speed of systemic adjustment in the model. The study found that government external and domestic debts, inflation rate and exchange rate appreciation (in favour of the domestic currency) have significant long run relationship with foreign direct investment in Nigeria. It therefore recommends among others a more prudent management of both domestic and external debt of Nigeria and that our monetary authorities should devise effective ways of fine-tuning and managing such macroeconomic tools and variables as the rate of inflation and exchange rate.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Foreign Direct Investment, Inflation rate, External Debt, Domestic Debt, Foreign Exchange
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Ms Ugwunwa Esse
Date Deposited: 29 Jun 2016 13:22
Last Modified: 16 Jun 2017 13:44
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/6684

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