Foreign Direct Investment and Economic Growth in Nigeria: A Sectoral Analysis

This study was carried out to analyse the effect of sectoral FDI inflows on economic growth in Nigeria between the period of 1980 and 2012. VECM and co-integration techniques were employed. The findings show that there is a positive relationship between FDI flow to manufacturing sector and economic growth, a positive relationship between FDI inflows to the oil sector and economic growth, and a positive influence between FDI inflows to service sector economic growth in the long run. However, there is a negative long run relationship between FDI inflows into the agriculture sector and the telecommunication sectors and economic growth. The paper therefore concludes that there is a need for policy makers to formulate policy that will help the economy maximize the growth potentials of the telecommunication sector. Key Words: FDI, Economic Growth, VECM, Co-integration, Sectoria