The Effect of Foreign Capital Inflows on Economic Growth in Nigeria

Abstract

Foreign capital inflows are major forms of resource transfer from the developed to the developing countries where they are usually found to be more productive and the result can be positive or negative. Hence, the work set out to empirically investigate the effect of foreign capital inflows and some selected macroeconomic variables on economic growth in Nigeria. The study applied the autoregressive distributed lag (ARDL) model on time series data for the period, 1981-2020. The findings from the paper indicate that foreign capital inflows: FDI, Gross fixed capital formation and personal remittances have significant impact on real gross domestic product in Nigeria. Consequently, the study recommends that government should continue to fine tune bilateral trade and investment agreements with other nations of the world.