Exchange Rate, Foreign Direct Investment and Economic Growth Nexus in Nigeria

Onabote Ademola Andrew; Adama Ibrahim Joseph; Obasaju Barnabas; Bright Ohwofasa; Eluyela Damilola; Popoola Olabisi

Vol-7,Issue-1,January - February 2022

Author: Onabote Ademola Andrew, Adama Ibrahim Joseph, Obasaju Barnabas, Bright Ohwofasa, Eluyela Damilola, Popoola Olabisi

Keywords: Exchange rate, Foreign direct investment, ¬ Economic growth, ARDL, Nigeria.

Abstract: The relationship among exchange rate, foreign direct investment and economic growth is explored in this study by adopting the Autoregressive Distributive Lag (ARDL) technique to examine the long-run cointegrating relationship for the period 1981-2018. A long-run relationship was confirmed among exchange rate, foreign direct investment and economic growth. From the findings, foreign direct investment contributes positively to economic growth, while the speed of adjustment is 78.46% and significant.The study recommends, among others, that the Nigerian government must create an enabling atmosphere for private businesses to prosper. The study suggested that the government pursue policies that will boost investors' confidence and enable foreign companies to invest in the country's economy. Government and private-sector agencies are encouraged to invest more in the country's education and health care infrastructure.

Article Info: Received: 06 Dec 2021; Received in revised form: 09 Feb 2022; Accepted: 16 Feb 2022; Available online: 24 Feb 2022

DOI: 10.22161/ijels.71.42