Foreign Private Investments and Real Gross Domestic Product in Nigeria

Abstract

The study which covered the period spanning from 1981 to 2020 (40 years) examined the impact
of foreign private sector investment on Nigerian economy. The study specifically explored the
impacts of foreign private sector real investment (FPSRI) and foreign private sector portfolio
investment (FPSPI) on the Real Gross Domestic Product (RGDP) of the Real Gross Domestic
Product (RGDP) of Nigeria. The data for the study were sourced and obtained from the Central
Bank of Nigeria (CBN) Statistical Bulletin and World Bank Database from 1981 to 2020.
Econometric techniques of unit root, integration, ARDL regression, error correction model were
employed in analyzing the data. The results showed that foreign private sector real investment
(FPSRI) exerted significant positive impact on real gross domestic product (RGDP) growth during
the period studied where as foreign private sector portfolio investment (FPSPI) exerted significant
negative impact on RGDP growth both short and long runs. The study recommended that monetary
and fiscal policies should be geared toward improving foreign private sector investment most
especially, foreign real investment to boast economic growth in Nigeria.