DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN NIGERIA

Abstract This paper evaluates the determinants of foreign direct investment in Nigeria within a multivariate framework from 1980-2020. The Central Bank of Nigeria statistical bulletin (various issues), the National Bureau of Statistics and the World Bank’s world development indicators were the source of the information utilized in this article. The autoregressive distributed lag (ARDL) bounds test is employed in establishing the long-run relationship among the variables. The results reveal that there is a long-run relationship between the macroeconomic variables used in this research. Precisely, the result shows that real gross domestic product has a positive and significant impact on foreign direct investment both in the short run and long; exchange rate and degree of trade openness have a positive and significant influence on foreign direct investment in the long run; inflation rate has a negative and significant effect on foreign direct investment in the long run. Hence, it was recommended that government should ensure the economic atmosphere is conducive for foreign investors; provide the needed infrastructure and amenities to boost economic growth; provide an adequate level of security in the country; formulate policies to ensure stable exchange rates; adopt uniform tax policies; adopt an economic policy of privatization, liberalization and globalization