Unit Root Test of Foreign Direct Investment and Economic Growth of Nigeria

Abstract

By bridging the gap between domestic savings and domestic investment needs, and bringing the latest technology and management know-how from developed countries, Foreign Direct Investment (FDI) can play a vital role in bringing about rapid economic growth in developing countries like Nigeria. Secondary time series data sourced from National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN) Statistical Bulletin were used and Unit Root Test (URT) was adopted for analysis. The results from the findings show that Credit to Private Sector, Net Export and Real Gross Domestic Product (RGDP) are positively and significantly related to FDI in later years. The researchers therefore recommend that government through her Monetary Authorities should initiate policies that will make it easier for private sector operators to access funds for their investments without too much conditionality, encourage production and consequently exports of goods and services.

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