Economic and Financial Review


Central Bank of Nigeria, Research Department.


Domestic Private Investment, Governance, Bound Testing Approach, Nigeria


The paper sets out to investigate the role of governance on domestic private investment in Nigeria using Auto-Regressive Distributed Log (ARDL) Bounds Testing Approach to ascertain long-run association on an annual data covering the 1970 to 2010 period. Emanated from the estimated models are intriguing findings which showed clearly that difference exists between long and short run determinants of domestic private investment. In the former, degree of openness, previous value of inflation rates and governance indicators are the most important factors but political stability and voice and accountability indicators appear to dominate the governance indicators space as they are both negative and significantly affecting the private investment mobilization. In the latter, savings, real GDP, degree of openness, real interest rates, inflation rates and governance measures are strong determining variables on private investment mobilization. Of the governance indicators however, political stability stood out prominently. A few relatable implications for policy are highlighted for the attention of policymakers.

Author Bio

Kozeem Ajide A. is with the Department of Economics, Faculty of Social Sciences, University of Lagos, Akoko, Lagos.

Publication Title

CBN Economic and Financial Review





Recommended Citation

Ajide, Kazeem B. (2013). The Role of Governance on Private Investment in Nigeria: A Preliminary Analysis. CBN Economic and Financial Review. 51(1), 93-119.



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