Impact of Foreign Direct Investment and Interest Rates on Nigerian Economic Growth

Despite numerous efforts by the government to attract foreign direct investment (FDI) into the economy, the flow of FDI still remains abysmal in Nigeria. This paper investigates the impact of foreign direct investment inflows and interest rates on the economic growth of Nigeria for the period 1978–2019. The study employed secondary data extracted from the World Bank Development Indicator. The auto-regressive distributed lag (ARDL) technique was used to examine both the short-run and long-run relationships between the variables.The results indicated that FDI has no positive impact on the growth of the Nigerian economy, while gross fixed capital formation has a positive and significant impact. However, interest rates and inflation rates have a negative but insignificant influence on economic growth. The study recommends that there is a need for a thorough analysis of the institutional and economicfactors that enable the beneficial influence of FDI inflows on developing nations, and efforts should be made to strengthen these factors.