THE EFFECT OF EXCHANGE RATE ON THE INFLOW OF FOREIGN DIRECT INVESTMENT IN NIGERIA

S. O. OJOGBO; A. H. OKO-OSI

S. O. OJOGBO Faculty of Management Sciences, University of Lagos, Lagos, Nigeria
A. H. OKO-OSI Faculty of Management Sciences, University of Lagos, Lagos, Nigeria

Keywords: Exchange rate, Foreign direct investment, Generalised method of moments.

Abstract

This paper empirically examined the influence of foreign exchange rate on the inflow of foreign direct investment (FDI) in Nigeria. Using time series data from 1985-2024 and applying generalised method of moments (GMM) technique, we found that exchange rate has a significant and positive influence on FDI in Nigeria. We therefore recommended that further appropriate and adequate policies should be formulated and implemented with the overriding objective of strengthening the value of the naira and minimizing domestic inflation rate risks that can adversely affect the inflow of foreign direct investment in the country.