FOREIGN PORTFOLIO INVESTMENT AND ECONOMIC GROWTH IN NIGERIA
1Hilary Eshidenang Ushie, 2Sunday Akiri &3Agya Atabani Adi
1University of Calabar Microfinance Bank
2Department of Economics, Benue State University, Makurdi
3Department of Economics, Federal University Wukari.
Email: ushiehilary@gmail.com
ABSTRACT
This study examines the relationship between foreign portfolio investment and economic growth in Nigeria from 1986 to 2018. Data for the study were gathered from secondary sources and analyzed with the use of both descriptive and inferential statistical methods. The Toda Yamamoto Non- Causality test was used to ascertain the nature of relationship between Foreign Portfolio Investment and economic growth.The impulse response and variance decomposition were used to examine the response of economic growth to innovations in foreign portfolio investment in Nigeria. The Toda Yamamoto Non- Causality result revealed that there is a bi-directional relationship between foreign portfolio investment and economic growth and the impulse response revealed that economic growth responded positively and permanently to shocks in foreign portfolio investment in Nigeria after the second period of forecast. The study recommends that the government should encourage the inflows of foreign portfolio investment by making investment friendly policies that would attract foreign investment into the country. Also emphasis should be directed toward maintaining peace and avoidance of debt overhang.
Keywords: Foreign Portfolio Investment, Economic Growth, Toda Yamamoto, Nigeria.
