Economic and Financial Review


Central Bank of Nigeria, Research Department.


Foreign Direct Investment (FDI), Trade and exchange rate, Capital Income, Development, Nigeria.


This paper examines, empirically, the determinants of foreign direct investment (FDI) in Nigeria. The results indicate that exchange rate, government capital investment in infrastructure and credit to the domestic economy are some of the main factors that influence FDI flow to Nigeria. In particular, it shows that the ratio of external debt to GDP (Debt/GDP) was an important determinant of the flow of foreign investment. FDI was also observed to be sensitive to domestic interest rate and real per capita income. The study also highlights the need to maintain political stability in order to attract FDI.





Recommended Citation

Salako, H. A. and Adebusuyi, B. S. (2001). Determinants of Foreign Direct Investment (FDI) in Nigeria: an empirical investigation. Economic and Financial Review, 39(1), 20–39.



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