The Determinants of Foreign Direct Investments (FDIs) and the Nigerian Economy
Oba, Unoiza Oregwu, B. Chima Onuoha

This article looked at some factors that influence the foreign direct investment in Nigeria, and their impact on the economy. The data used in this study covered a period of ten years (2001 -2010) and considered such variables such as real GDP, inflationary levels, openness of trade, electricity consumption, transport and communication. Econometric model and regression analysis were employed to analyse the data. The results based on the value of F-statistics (35.83) and the co-efficient of determination (R2) of 0.98 revealed that the model was well specified and that the explanatory variables are sufficient to explain the inflow of FDI to Nigeria. The negative values of parameters such as the real GDP, inflation and electricity consumption call for policy reconsiderations. Based on our findings, the following recommendations were made, among others: that electricity supply should improve remarkably; fiscal discipline should be adhered to strictly; the fight against corruption should be total and transparent; government should straighten and deepen all incentive, institutional and regulatory frameworks in the country; and all efforts should be geared towards reducing costs of doing business in the country, which are among the highest in the world.

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