ABSTRACT

This study shows the performance of foreign direct investment on the manufacturing sector of the Nigeria economy. The study adopts a time series approach to the development of three different models namely; Manufacturing Value Added Model, Foreign direct investment, Interest rate and Gross fixed capital formation, from the year 1981 to 2015.The required data were collected from the central bank of Nigeria (CBN) 2015 statistical bulletin. The econometric model of multiple regression analysis was used to test the relationship between the dependent and independent variable, the short and the long run impacts of the foreign direct investment inflow on Nigeria’s manufacturing sector was analyzed using OLS estimation technique. All variables were tested to confirm the absence or presence of unit roots problems using ADF (Augmented Dickey-Fuller) test for the period in consideration. The study therefore concludes that foreign direct investment and interest rate data had positive and insignificant relationship with manufacturing sector in Nigeria whereas gross domestic investment had positive and significant relationship with the dependent variables.