FOREIGN DIRECT INVESTMENT INFLOWS AND NON-OIL EXPORTS IN NIGERIA: A VAR INVESTIGATION

ALUGBUO, Justin C.
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike Abia State, Nigeria
jc.alugbuo@mouau.edu.ng
EZE, Emeka
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike Abia State, Nigeria
OSUJI, Obinna
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture Umudike, Abia State, Nigeria
ABSTRACT
This study examined foreign direct investment (FDI) and non-oil exports on the Nigerian economy for the
period 1981 to 2021. The VAR estimation technique was used to figure out the dynamic impacts of the
variables of interest on each other over time. While E-views 12 statistical software was employed in computing
the VAR results, time series data were obtained from World Development Indicators (WDI), and the study
established that Non-Oil Exports endogenously influenced Gross National Income in the short run and
endogenously contributed and influenced Gross National Income in the long run which was based on the
forecast error variance decomposition test while Foreign Direct Investment Inflows endogenously influenced
Gross National Income in the short run and endogenously influenced it in the long run period. Based on these
findings, the study recommended that in order to maintain export competitiveness, the non-oil export of the
country should be well packaged for international acceptance. The government’s exchange rate, interest rate,
and inflation policy should be well managed by monetary authorities because a favorable interest rate would
lower the cost of production for producers in the non-oil sector while a favorable exchange rate would make
their products more competitive in the international market.
Keywords: Foreign direct investment inflows, exchange rate, interest rate, non-oil exports