Foreign Direct Investment into Oil Sector and Economic Growth in Nigeria

This study investigates the impacts of Foreign Direct Investment in oil sector in Nigeria and its attendant impact on economic growth. The co-integration analysis was employed for the study. The results showed that Foreign Direct Investment at current year is negatively associated with GDP possibly due to the fact that such investment needed to be allowed some time lag to translate to any significant impact. The impact of domestic capital formation is relatively small compared with the impact of Foreign Direct Investment in the oil sector. This is a further evidence of the dominant role of foreign investors in the oil sector of the country. Therefore, addressing problems related to security, corruption, inadequate infrastructure and inconsistent regulations remains the key elements of Nigeria’s future challenge of attracting more efficiency-seeking Foreign Direct Investment that can promote her economic growth. The Foreign direct investment is significant to the expectations of improvement of Nigeria’s economy, as it is a way of growing the capital existing for savings. And the economic growth required lessens deficiency and elevate standards of living.