Exploring the Impact of FDI on Consumer Price Inflation and GDP Growth in Nigeria
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style:
- Recommended for :
- NGN 5000
Background of the Study:
The role of Foreign Direct Investment (FDI) in shaping macroeconomic variables such as consumer price inflation and GDP growth has garnered considerable attention in Nigeria. FDI is widely regarded as a catalyst for economic modernization, bringing in capital, technology, and managerial expertise that spur GDP growth. Simultaneously, however, the influx of FDI can influence consumer price inflation by affecting market competition and demand for local products (Akinyele, 2023). In Nigeria, where inflation remains a persistent challenge, understanding the dual impact of FDI is crucial. Recent policy reforms have sought to attract more FDI while ensuring that its benefits are distributed equitably across the economy. Empirical studies indicate that while FDI generally supports GDP growth, its effect on inflation is more ambiguous, often depending on the sectoral allocation of investments and the existing market conditions (Babatunde, 2024). This study explores these dynamics by examining the channels through which FDI impacts both inflation and economic growth. Through a detailed analysis of historical trends and current policy initiatives, the research aims to provide a balanced appraisal of the benefits and potential drawbacks of FDI in the Nigerian context (Chinaza, 2025).
Statement of the Problem:
Despite efforts to attract increased FDI in Nigeria, the country continues to grapple with high consumer price inflation. While FDI is intended to bolster GDP growth and modernize the economy, its influence on inflation remains controversial. The challenge lies in determining whether the inflows of FDI contribute to price stability or if they exacerbate inflationary pressures through increased demand and market disruptions (Ibrahim, 2023). This study seeks to clarify the ambiguous relationship between FDI, consumer price inflation, and GDP growth, and to identify policy measures that can harness FDI’s growth potential without triggering excessive inflation (Okeke, 2024).
Objectives of the Study:
- To assess the impact of FDI on GDP growth in Nigeria.
- To examine the relationship between FDI inflows and consumer price inflation.
- To propose policy recommendations that maximize FDI benefits while controlling inflation.
Research Questions:
- How does FDI influence GDP growth in Nigeria?
- What is the relationship between FDI and consumer price inflation?
- What policy interventions can optimize the benefits of FDI without exacerbating inflation?
Research Hypotheses:
- H1: FDI positively contributes to GDP growth in Nigeria.
- H2: FDI inflows have a significant impact on consumer price inflation.
- H3: Coordinated fiscal policies can mitigate the inflationary effects of FDI.
Significance of the Study:
This study is significant as it explores the dual impact of FDI on Nigeria’s economic growth and consumer price inflation. The findings will guide policymakers in creating an environment that maximizes the positive effects of FDI while curbing inflation, thereby promoting sustainable economic development and stability (Eze, 2024).
Scope and Limitations of the Study:
This study is limited to exploring the impact of FDI on consumer price inflation and GDP growth in Nigeria and does not incorporate other external economic influences.
Definitions of Terms:
• FDI: Foreign Direct Investment, representing cross-border capital inflows.
• Consumer Price Inflation: The rate at which prices of goods and services rise, affecting purchasing power.
• GDP Growth: The increase in the country’s overall economic output.
Related Project Materials
INFLUENCE OF BOND MARKET ON THE NIGERIAN ECONOMY
ABSTRACT
This study evaluated the influence of Nigerian bond market on the Nigerian economy, using data covering the period of 30 years r...
IFRS Compliance in the Construction Industry in Nigeria: A Quantitative Study
Background of the Study
The construction industry plays a vital role in the economic development of nat...
The effect of cultural values on business ethics among traders in Calabar South Local Government Area, Cross River State
Background of the study
Cultural values play an integral role in shaping business ethics, influencing how traders conduct...
AN ASSESSMENT OF THE IMPACT OF MANUFACTURING SECTOR ON ECONOMIC GROWTH IN NIGERIA (1981 – 2010)
ABSTRACT
This research work examines econometrically the impact of manufacturing sector on economic growth in Nigeria, from 1981 to 2010....
CRIME CASE REPORTING AND THE OBSERVABLE IMPACT ON ITS VICTIMS
-
- Background to the study
Crime is a social problem that e...
The role of educational psychology in managing students with behavioral disorders in Keffi LGA, Nasarawa State
Background of the Study
Educational psychology provides an essential framework for understanding and addressing the behavi...
ORGANIZATIONAL LEARNING AND EMPLOYEE PERFORMANCE OF SELECTED BREWERY FIRMS
ABSTRACT
This study was carried out to examine organizational learning and employee performance of sele...
AN ASSESSMENT OF THE EFFECT OF E-NAIRA PLATFORM ON NIGERIA COMMERCIAL BANKS
Background Of The Study
Nigeria's financial landscape has never been static. New services and produ...
IMPACT OF PRICING AND MARKETING OF BEVERAGE
BACKGROUND OF THE STUDY
Decision about prices of a company’s product and services are among the most important ac...
A Study of the Role of Geriatric Nursing in Managing Parkinson’s Disease in Kaduna State
Background of the Study
Parkinson's disease (PD) is a neurodegenerative disorder t...
