Foreign Direct Investment and Economic Growth: Evidence from Nigeria
Dr. Uwubanmwen, Ahmed E; Mr. Ogiemudia Omorose A.

Abstract
This paper empirically examines the effects of Foreign Direct Investment (FDI) on economic growth in Nigeria. Employing the Error Correction Model (ECM), annual secondary time series data covering the period of 1979 to 2013 were analysed using an ECM technique to determine the short and long run effect of FDI on economic growth of Nigeria. Granger causality methodology was used to analyze and establish the nature of relationship (if any) between FDI and economic growth in Nigeria. Our empirical analysis reveals that Foreign Direct Investment (FDI) has both immediate and time lag effect on Nigeria economy in the short run. And FDI has a non significant negative effect on the Nigerian economy in the long run during the period under review. This was further confirmed by the causality test which shows that FDI granger causes RGDP and not the other way. Thus FDI has a significant positive effect on the growth as well as the development of the Nigerian economy only in the short run during the period under review. We therefore conclude and recommend that government should ensure stable macroeconomic policies as a stabilization tool to propel the attraction of more FDI into Nigeria and dependency on foreign direct investment should remain limited.

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