Muhammad Kabir Lawal 1 & Unyime, Abasido ANTHONY2
1 Department of Finance, Faculty of Management Sciences, Ahmadu Bello University, Zaria
2Department of Business Administration and Management, Federal Polytechnic Daura
Correspondence Email Address: [email protected]
Abstract
The study investigated the impacts of Foreign Direct Investment (FDI), Real Interest Rates, and Private Sector Credit on the economic growth of Nigeria from 1960 to 2022. The study highlights the need for policies that sustain FDI inflows, balance interest rate impacts and improve financial intermediation. Using annual time series data, an OLS regression model is estimated with GDP growth rate as the dependent variable. The empirical analysis indicates that FDI has a statistically significant positive association with GDP growth, suggesting it plays a key role in boosting Nigeria’s economic output. Real interest rates have a modest positive effect on GDP growth, though higher rates could potentially deter investment and borrowing. However, no significant relationship is found between private sector credit and economic growth. The subgroups and predicted means analysis provides further insights into structural shifts and trends in the variables over time. The results showed and emphasized the complex, evolving interlinkages between these financial and monetary factors in influencing Nigeria’s growth path. It recommends avenues for future research to deepen understanding of these relationships using more advanced techniques. The study’s findings have important implications for policymakers in crafting strategies to foster strong, inclusive growth.
Keywords: Foreign Direct Investment (FDI), Real Interest Rates, Private Sector Credit, GDP Growth Rate, OLS Regression Model, Nigeria’s Economic Growth.