Effects of International Capital Inflows on Standard of Living in Nigeria

Nyeche; Ezebunwo PhD; Ozuzu; Chukwuemeka Sydney Reginald PhD; Kpagih; Leera; PhD

doi:10.56201/wjfir.v9.no10.2025.pg97.110

📄 Download Paper

Effects of International Capital Inflows on Standard of Living in Nigeria

Nyeche, Ezebunwo PhD, Ozuzu, Chukwuemeka Sydney Reginald PhD , Kpagih, Leera, PhD

Abstract

This study investigated the effects of international capital inflows on standard of living in Nigeria between 1990 and 2023. The study proxied standard of living by Gross National Income Per Capita and international capital inflows by foreign direct investment, foreign portfolio investment, official development assistance, external debt and migrant capital remittance. The study utilized annual time series data which were sourced from Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics reports and World Development Indicators of World Bank. Data analysis techniques employed included descriptive statistics, unit root tests, bounds cointegration, the Autoregressive Distributed Lag estimation method, and residual diagnostic tests. The Augmented Dickey-Fuller unit root tests revealed a mix of I (1) and I (0) series, indicating varying levels of integration among the variables. Evidence of cointegration found suggested a long-term equilibrium relationship among the variables. The ARDL results showed that foreign direct investment, foreign portfolio investment and migrant capital remittance have positive and significant short-run and long-run effect on Gross National Income Per Capita in Nigeria, official development assistance has a non-significant positive short- run and long-run effect on Gross National Income Per Capita in Nigeria, while external debt has a negative and significant short-run and long-run effect on Gross National Income Per Capita in Nigeria. Premised on the findings, the study therefore concluded that international capital inflows are relatively effective in increasing standard of living in Nigeria. The study recommended that government should address infrastructure deficits, streamline bureaucratic processes, and ensure political stability in order to increase foreign direct investment inflows to the country.

Keywords

Gross national income per capitaforeign direct investmentforeign portfolio investmentofficial development assistancemigrant capital remittance

References

Chiamaka L. O., Felix N. E., Ifeoma C. A. & Amalachukwu C. A. (2023). International capital inflows and economic development of Nigeria (1986. African Banking and Finance Review Journal , 2(2); 81-102. Chinasa E. U., Doris C. E., Divine N. O., Ezebuilo R. U., Afamefuna A. E., Ifeoma C. M., Joseph I. A., Winnie O. A. & Hauwa V. I. (2022). The effect of foreign capital inflows on economic growth in Nigeria. Regional Economic Development Research. Chude N. P. & Chude D. I. (2023). Effect of International Capital Inflows on Economic Growth in Nigeria. IJISET - International Journal of Innovative Science, Engineering & Technology, 10(1); 112-125. Djalab Z. & Said A. N. (2023). The impact of international capital flows on the economic growth in Algeria during the period 1990-2018. Les Cahiers du Cread -Vol. 39 - n° 01. Forbes, K.J., & Warnock, F.E. (2012) Capital flow waves: Surges, stops, flight and retrenchment. Journal of international economics 88(2) 235-51 Monogbe, G. T., Okereke, J. E. & Ifionu, P. E. (2020). An empirical investigation on foreign capital inflows and economic development in Nigeria. Asian Journal of Economics, Business and Accounting, 14(2), 63-76. Ndiweni, Z. L. & Bonga-Bonga, L. (2021). Capital inflows and economic growth nexus in Sub- Saharan Africa: evidence on the role of institutions, ABFRJ, 2(2); 81-102. Oke, O. A. & Ruth, D. O. (2021). Foreign capital flows and economic growth in Nigeria. SSRG International Journal of Humanities and Social Science, 8(6), 39-50. Romer, P. M. (1990). Endogenous TECHNOLOGICAL Change. Journal of Political Economy, 98(5),71-102. Stiglitz, J.E. (2019) addressing climate change through price and non-price interventions. European economic review 119: 594-612 Solow, R. M. (1957). Technical change and the aggregate production function. Review of Economics and Statistics, 39(3), 312-320. UNCTAD (2020). World investment report: Foreign direct investment and the challenge of investment.

Effects of International Capital Inflows on Standard of Living in Nigeria

Abstract

Keywords

References

More Articles from WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH