Domestic Investment and Economic Growth Nexus in Nigeria: A Post Recession View
Onochie, Stanley Nwabuisi
Department of Economics, Lagos State University, Ojo, Lagos, Nigeria.
Ozegbe, Azuka Elvis
Department of Economics, Lagos State University, Ojo, Lagos, Nigeria.
Nwani, Stanley Emife *
Department of Economics, Lagos State University, Ojo, Lagos, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This study investigates the impact of domestic investment on economic growth in Nigeria, using annual secondary time series data spanning 37 years from 1981 to 2017 extracted from the CBN statistical bulletin. Real GDP was used to proxy economic growth, while the key explanatory variable is domestic investment with other control variables as capital expenditure, oil export earnings, exchange rate and inflation rate. The study embarked on pre-estimation test such as unit root test and the bounds co-integration test which informed our methodological choice of Autoregressive Distributed Lag (ARDL). The short run and long run estimates show that domestic investment has positive but insignificant impact on economic growth in Nigeria. This finding departs from those of previous writers due to the improved analytical framework employed in this study. On the basis of our findings, the study recommends a compulsory individual and national savings to boost the level of domestic investment in the country so as to achieve the much desired economic growth and development.
Keywords: Domestic investment, economic growth, ARDL.