The Impact of Combined GDP and FDI Growth on Nigeria’s Economic Development
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Background of the Study:
The interplay between Gross Domestic Product (GDP) growth and Foreign Direct Investment (FDI) is central to Nigeria’s economic development agenda. Recent fiscal and trade policies have sought to stimulate GDP growth while simultaneously attracting FDI to diversify the economy away from its heavy oil dependence (Okoro, 2023). Combined growth in GDP and FDI is posited to create a multiplier effect that enhances technological transfer, creates employment, and fosters sustainable industrial expansion (Adeniyi, 2024). Empirical studies have shown that higher levels of FDI can lead to improvements in productivity and competitiveness, which in turn boost overall economic output (Eze, 2025). Furthermore, robust GDP growth creates a favorable investment climate by increasing market size and consumer purchasing power. This study investigates how the synergy between GDP growth and FDI inflows has shaped Nigeria’s economic development trajectory. By examining historical trends, policy frameworks, and current economic indicators, the research seeks to elucidate the channels through which these factors interact to produce positive developmental outcomes. The analysis includes a review of fiscal measures, regulatory reforms, and international investment trends that have contributed to this dynamic. The findings are expected to offer valuable insights for policymakers aiming to create a virtuous cycle of investment and economic growth.
Statement of the Problem:
Despite observable improvements in both GDP and FDI, Nigeria’s economic development remains hampered by structural challenges. The anticipated positive correlation between combined GDP and FDI growth and broader economic development has not been fully realized due to factors such as inadequate infrastructure, regulatory inconsistencies, and political uncertainties (Chukwu, 2023). Moreover, the lack of coordinated policy measures to harness the potential benefits of FDI further impedes the realization of sustained economic growth. This study, therefore, seeks to explore the barriers that prevent the effective integration of GDP and FDI growth into the country’s overall development strategy, identifying specific areas where policy intervention is required to optimize economic performance (Uche, 2024).
Objectives of the Study:
- To analyze the trends in GDP and FDI growth in Nigeria.
- To examine their combined impact on economic development.
- To propose policy recommendations to enhance the synergy between GDP growth and FDI.
Research Questions:
- How do GDP growth and FDI interact to influence Nigeria’s economic development?
- What are the challenges hindering the effective utilization of FDI for development?
- Which policy measures can better integrate GDP and FDI growth for sustainable development?
Research Hypotheses:
- H1: There is a significant positive relationship between combined GDP growth and FDI inflows and economic development.
- H2: Regulatory and infrastructural challenges negatively affect the integration of FDI benefits.
- H3: Improved policy coordination enhances the developmental impact of combined GDP and FDI growth.
Significance of the Study:
This study is significant because it elucidates the combined effects of GDP growth and FDI on Nigeria’s economic development. The insights provided will inform policymakers on how to create a more conducive environment for both domestic growth and foreign investment, thereby driving sustainable economic progress and structural transformation (Afolabi, 2024).
Scope and Limitations of the Study:
The study is limited to examining the impact of combined GDP and FDI growth on economic development in Nigeria and does not incorporate other macroeconomic indicators.
Definitions of Terms:
• GDP Growth: The rate at which a country’s economic output increases.
• Foreign Direct Investment (FDI): Investment made by a firm or individual in one country into business interests located in another country.
• Economic Development: The process by which a nation improves the economic, political, and social well-being of its people.
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