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This study examined the relationship between foreign direct investment and economic growth
in Nigeria from 1981 to 2021 as well as the effects of FDI on economic growth in Nigeria. A
linear model and an autoregressive distributed lag model were used for estimation. Many of
the variables were stationary at the first difference I(1), whereas foreign direct investment and
inflation were stationary at level I(0). This study showed that foreign direct investment, real
gross domestic product, trade openness, inflation, exchange rate, and education (human
capital) exhibit a long-run relationship. The results of this study also indicate that foreign
direct investment affects a nation's economic growth positively and significantly. The study
concludes that, the Nigerian government should develop arrangements to draw foreign direct
investment to all sectors of the economy, primarily service and manufacturing. In addition to
improving infrastructure and goods production, the country should also increase its
educational policy and work ethic to build human capital. Furthermore, the Nigerian
government should devise arrangements for attracting foreign direct investment, primarily in
the service and manufacturing sectors. It should also improve its infrastructure, production of
goods, and education policy to increase its human capital stock
