Conference Paper

Foreign Capital Inflows and Economic Development In Nigeria

Abstract This study investigated the impact of foreign capital inflows on economic development in Nigeria, covering 24 years between 1999 and 2022. The study employed data on foreign direct investment, foreign aid, remittance, external debt and human development index from the CBN Statistical Bulletin (2023), the World Bank Development Indicator (2022) edition and Human Development Index Report (2023). From the Ordinary Least Squares (OLS) estimation, the study observed that foreign aid and foreign direct investment have positive and significant impacts on the human development index in Nigeria at a 5% significance level. However, further finding reveals that remittance and external debt have positive but insignificant impacts on the human development index. The study therefore concluded that foreign direct investment and foreign aid have significantly contributed to economic development in Nigeria. The study suggests that the government should explore alternative sources of foreign investment that are more likely to produce positive effect on the country economy. Also, the government should promote national investment strategies to showcase investment opportunities through digital platforms, investment conferences and summits, as this can help to promote investment potentials. Keywords: Foreign Direct Investment, Foreign Capital Inflow, Human Development Index, Economic Development