The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

Murtala Zakari

doi:doi:10.11648/j.jfa.20170504.17

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The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

Murtala Zakari

Published in Journal of Finance and Accounting (Volume 5, Issue 4)

Received: 9 May 2017 Accepted: 22 May 2017 Published: 18 July 2017

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Abstract

This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage (1990-2015). This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.

Published in	Journal of Finance and Accounting (Volume 5, Issue 4)
DOI	10.11648/j.jfa.20170504.17
Page(s)	165-170
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

FDI, Exchange Rate, GDP, Nigeria

References

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[10]	Harchaoui, T., Tarkhani, F. and Yuen, T. (2005) “The Effects of the Exchange Rate on Investment: Evidence from Canadian Manufacturing Industries”, Working Paper 2005-22 / Document de travail 2005-22, Bank of Canada Banque du Canada.
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APA Style

Murtala Zakari. (2017). The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. Journal of Finance and Accounting, 5(4), 165-170. https://doi.org/10.11648/j.jfa.20170504.17

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ACS Style

Murtala Zakari. The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. J. Finance Account. 2017, 5(4), 165-170. doi: 10.11648/j.jfa.20170504.17

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AMA Style

Murtala Zakari. The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. J Finance Account. 2017;5(4):165-170. doi: 10.11648/j.jfa.20170504.17

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@article{10.11648/j.jfa.20170504.17,
  author = {Murtala Zakari},
  title = {The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {5},
  number = {4},
  pages = {165-170},
  doi = {10.11648/j.jfa.20170504.17},
  url = {https://doi.org/10.11648/j.jfa.20170504.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170504.17},
  abstract = {This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage (1990-2015). This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.},
 year = {2017}
}

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TY  - JOUR
T1  - The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria
AU  - Murtala Zakari
Y1  - 2017/07/18
PY  - 2017
N1  - https://doi.org/10.11648/j.jfa.20170504.17
DO  - 10.11648/j.jfa.20170504.17
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 165
EP  - 170
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20170504.17
AB  - This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage (1990-2015). This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.
VL  - 5
IS  - 4
ER  -

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Author Information

Murtala Zakari

Post Graduate School of Accounting and Finance, Leeds Beckett University, Leeds, UK

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APA Style

Murtala Zakari. (2017). The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. Journal of Finance and Accounting, 5(4), 165-170. https://doi.org/10.11648/j.jfa.20170504.17

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ACS Style

Murtala Zakari. The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. J. Finance Account. 2017, 5(4), 165-170. doi: 10.11648/j.jfa.20170504.17

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AMA Style

Murtala Zakari. The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria. J Finance Account. 2017;5(4):165-170. doi: 10.11648/j.jfa.20170504.17

Copy | Download

@article{10.11648/j.jfa.20170504.17,
  author = {Murtala Zakari},
  title = {The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {5},
  number = {4},
  pages = {165-170},
  doi = {10.11648/j.jfa.20170504.17},
  url = {https://doi.org/10.11648/j.jfa.20170504.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170504.17},
  abstract = {This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage (1990-2015). This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria
AU  - Murtala Zakari
Y1  - 2017/07/18
PY  - 2017
N1  - https://doi.org/10.11648/j.jfa.20170504.17
DO  - 10.11648/j.jfa.20170504.17
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 165
EP  - 170
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20170504.17
AB  - This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage (1990-2015). This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.
VL  - 5
IS  - 4
ER  -

Copy | Download