Foreign Direct Investment Inflow, External Debt and Economic Growth in Nigeria

B. V. Kudaisi

Abstract


It is a popular saying that no man is an island on himself. So also no government is an island on its own and as such it would require assistance and maybe in form of foreign aids, investment from foreigners and external debt so as to perform effectively and efficiently. Hence, the study examines the impact of foreign direct investment inflow and external debt on economic growth. The ARDL econometrics technique was used to investigate both the short- and long-run relationship among the variables. The estimated result shows that FDI and external debt have a positive and statistically significant effect on the economic growth of Nigeria. The study recommend among other things that the government should be responsive enough to make the borrowed fund meant for capital and development project be properly channelled toward those projects. Also, the debt must be thoroughly monitored to avoid being diverted into private pockets so as to achieve optimal use of the fund. In addition, government must endeavour to crate an enabling environment for domestic investors to thrive. Policy(s) aim at increase FDI flow to country should be adopted by the government.


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