Transport Infrastructure, Foreign Direct Investment and Economic Growth in Nigeria

Abstract

This study investigates the impact of Transport Infrastructure and Foreign Direct Investment on Economic Growth in the Nigerian economy from 1970-2023 Secondary data needed for the analysis were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin and World bank development indicators on  variables used such as; Gross domestic product,  Foreign Direct Investment Inflow to the economy, Government expenditure on transport, Exchange rate, Gross fixed capital formation and Interest Rate. The Auto-Regressive Distributed Lagged (ARDL) also known as bound testing approach to co-integration was used to estimate the model. The findings reveal that, in the near term, there are negative and noteworthy correlations between FDI and GDP. Long-term benefits would result from an increase in FDI combined with a rise in the share of government capital spending on transport infrastructure. Interest rates are directly correlated with the gross domestic product (GDP) and have a ripple effect on the stock and bond markets. This research work therefore suggest that government should spend more on construction and upgrading of dilapidated roads to a well-developed and organized road in other to attract foreign direct investment and economic growth in Nigeria.