Variations In Oil Prices And Foreign Direct Investment Influx In Nigeria
Mathew Ekundayo Rotimi, Esther Gabriel, Isiaka Olayinka Kolawole, Aisha Princess Umar, Grace Gift Rotimi, Jonathan Olusegun Famoroti, Akindele John Ogunsola
Keywords: Oil Price, variations, export, FDI, trade, revenue
Abstract
This study analyzed the effects of variations in oil prices on the influx of foreign direct investment (FDI) in Nigeria. The study employed the Johansen cointegration and Vector Error Correction Model (VECM) techniques to analyzed data covering the period 1990-2021. The study used secondary data sourced from the World Development Indicators. The study results revealed that in the short term, an increase in oil price variations led to a decrease in FDI. This suggests that oil price fluctuations do not favour FDI in Nigeria in the short run. On the other hand, the study observed a positive and significant relationship between oil price variations and FDI in the long term. This implies that as oil prices change, there is a corresponding positive and significant impact on foreign direct investment in Nigeria over an extended period. The study concludes that there is need for the Nigerian government to ensure consistent implementation of effective measures to maintain competitive oil prices. This not only positively and significantly influences the inflow of FDI into the country but also generates more revenue for the economy. The study recommends the implementation of appropriate policies to diversify the Nigerian economy, reducing its excessive dependence on oil exports. This diversification is crucial for achieving sustained economic growth in Nigeria.
Author Biography
Mathew Ekundayo Rotimi, Esther Gabriel, Aisha Princess Umar
Department of Economics, Federal University Lokoja, Kogi State, Nigeria.
Isiaka Olayinka Kolawole
Deputy Executive Secretary Services, UBEC, Wuse Zone 4, Abuja, Nigeria
Grace Gift Rotimi
Department of Business Administration, Prince Abubakar Audu, Anyigba, Kogi State, Nigeria
Jonathan Olusegun Famoroti, Akindele John Ogunsola
Department of Economics, Ekiti State University, Ado-Ekiti, Nigeria
Corresponding Author: mathew.rotimi@fulokoja.edu.ng