Foreign Direct Investment, Remittances and Economic Growth in Nigeria : Do These Inflows Stimulate Growth?

The effect of international inflow of capital on economic growth has generated a lot of argument and debate over time. Some concluded that capital inflow does not matter and in effect cannot stimulate the desired growth while others believed it does matter in promoting the key macro-economic variables such as the reduction in unemployment and poverty, price stability, industrialization just to mention a few. Hence, this study was set out to investigate the effect of Foreign Direct Investment and Remittances on economic growth in Nigeria. The study adopted other explanatory variables and data were sourced from the World Development Indicator and Central Bank of Nigeria spanning from 1980 to 2019 and Ordinary Least Square was used to analyze the data after it has been subjected to unit root stationary test. The study found that Foreign Direct Investment has a negative relationship with economic growth and Remittances seem to have a positive effect on economic growth. The study, therefore, concluded that FDI does not stimulate desired growth while remittances promote growth in Nigeria. In the light of these findings, the study, therefore, recommended that government should remove impediments discouraging investment policies that will stimulate the use of FDI in the country. The Nigeria government should also encourage inflow and monitoring of remittances through financial institutions to enable them to have adequate data on this inflow to gear it into the growth process