COMPARATIVE ANALYSIS OF IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH DURING THE MILITARY AND POST-MILITARY ERAS IN NIGERIA

The role of foreign direct investment in economic growth cannot be undermined. Foreign direct investment occupies significant position as the major source through which the productivity capacity, employment opportunities as well as technology transfer of the host economies could be improved. The contribution of FDI is crucial for countries where incomes and domestic savings are particularly low, like Nigeria. This study empirically examines comparative analysis of impact of FDI on economic growth in Nigeria during the military and post-military eras using error correction model (ECM). The Unit root test and Engle-Granger co-integration test show that some of the variables were differenced once to make them stationary, therefore they are co-integrated. Findings reveal that foreign direct investment had positive and significant impact in the military era while the post-military era recorded negative and insignificant relationship between foreign direct investment and economic growth. Also, gross fixed capital formation had positive impact on economic growth both in the military and post-military eras but this was statistically insignificant. The whole results of the empirical research imply that the economy under study did well during the military era than the post-military period. The paper, therefore, recommends among others; robust economic reforms and policies that will enable foreign direct investments to impact on the economy significantly in the area of inclusive growth and enactment of legislation to compel the foreign companies operating in Nigeria to be listed on the Nigerian Stock Market so as to eliminate repatriations of profit made by these companies back to their home countries.