Foreign Capital, Domestic Policy, and Economic Growth: The Case of Nigeria

Dal Didia, Patricia Freeman, Jean-Claude Assad, Jing Yuan
2015 Journal of Applied Economics and Business Research JAEBR   unpublished
In spite of a myriad of developmental challenges, Nigeria emerged as the largest economy in Africa in 2014, surpassing South Africa for the first time. Nigeria's economy has been growing at an average rate of 7 percent for the last few years. What are the factors driving this remarkable growth in the economy? This paper explores the factors responsible for the phenomenal growth in Nigeria's economy. Factors such as foreign capital, domestic policies, trade openness, and labor force
more » ... force participation rate are examined. Utilizing data from the World Bank, empirical estimations confirm that the major drivers of economic growth in Nigeria are labor force participation rate, monetary policy, and foreign direct investment. Surprisingly, fiscal policy and foreign aid are not statistically significant drivers of economic growth in Nigeria.