Benue State University, Makurdi

THE ROLE OF INFRASTRUCTURAL DEVELOPMENT IN ATTRACTING FOREIGN DIRECT INVESTMENT IN NIGERIA (1981-2019)

Ngozi Edith Iyoho
Social Policy Department,
Nigeria Institute of Social and Economic Research (NISER),
Ibadan.

Abstract

The potential of foreign direct investment in a host nation's economic progress and technological advancement is not controversial. Meanwhile, the level of infrastructure sets the pace for foreign direct investment (FDI) flows. The study used a descriptive research design and annual time series data from the Central Bank of Nigeria (CBN) Statistical Bulletin for the years 1981 to 2019. Fully Modified Ordinary Least Squares techniques were used to estimate the econometric model. The result indicates that social infrastructure (â = 0.024313, t = 2.935285, p < 0.05), has a significant positive influence on foreign direct investment in Nigeria. It was also found that economic infrastructure (=-0.673199, t=-3.318014, p < 0.05) showed a negative significant effect on foreign direct investment in Nigeria, while transport infrastructure did not show any effect on foreign direct investment in Nigeria. It was recommended that economic infrastructure that crowds out foreign direct investment should be revitalized by allowing private individuals who are willing to invest in the sector through a publicprivate partnership agreement.

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