JOURNAL OF BUSINESS & ECONOMY

RELATIONSHIP BETWEEN INVESTMENT AND ECONOMIC GROWTH IN NIGERIA

ATAMENWAN, JULIUS (PhD), NESTOR, COMLA BOSSOU

February 12, 2025

Citation

JOURNAL OF BUSINESS & ECONOMY , Vol. 17 (1) (2025)

Details

ISSN: 2808-5428
Published: February 12, 2025
Status: Published

Abstract

This study investigates the relationship between investment and economic growth in Nigeria. The study employed a rigorous econometric approach using Pooled Mean Group (PMG) regression analysis covering Nigeria from 1985 to 2023. The dependent variable is Gross Domestic Product Growth (GDPG) while, the independent variables are Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI) and Domestic Investment (DOI). The result shows that there is long run relationship among the variables employed. Also, the findings revealed that, foreign private investment demonstrates the strongest long-term growth impact, Domestic investment shows consistent positive effects while, Foreign direct investment presents an interesting paradox - initially negative but ultimately positive effects - highlighting the complex dynamics of economic integration. The study therefore recommends among others that government should improve the investment climate by reducing regulatory bottlenecks, ensuring stable exchange rates, and strengthening property rights and also develop critical infrastructure (power, transport, and digital connectivity) to attract high-value foreign investments in order to achieve sustainable economic growth in Nigeria.

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