Reinvestigating Foreign Direct Investment and Poverty Nexus: any Difference with the Nigerian Human Development?

Abstract

This study examined the relationship between FDI inflows and poverty reduction vis-à-vis Human Development Index in which majority of past studies have not fully explored in Nigeria. Data were extracted from secondary sources with application of ARDL and Bounds test technique. The major findings that came up in this study are as follows; FDI net inflows had an insignificant negative relationship with GDP per capita that measures welfare of the people in terms of the socio-economic benefits in Nigeria. Similarly, net FDI inflows had a negative but insignificant relationship with literacy rate, which measures welfare of the people in terms of educational attainment. Whereas, net FDI inflows had an insignificant positive relationship with life expectancy which measures welfare of the people in terms of health. Consequently, steaming from the principal findings that emerged in this work, the following recommendations are therefore made for the policy makers in Nigeria. When the Nigerian policy makers want to address poverty holistically in the country, the human development variables should be targeted. Also, policy measures that would stimulate FDI inflows into the country should be encouraged, and FDI inflows in the country should be utilized maximally in order to bring poverty reduction in the country in the short run.