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The nexus between the agricultural sector, manufacturing sector, and FDI has been a topic of
debate over the years. While the fundamental role of FDI in the growth of the overall economy has been
widely recognized, findings of existing literature have remained unclear and inconclusive on how the
impact of FDI varies across these distinct sectors, especially within the context of developing countries
like Nigeria. This study aims to provide a comprehensive comparative analysis of the impact of FDI and
other capital inflows on Nigeria’s agricultural and manufacturing sectors between 1980 and 2021. Using
annual time-series data from the World Bank’s World Development Indicators (WDI) and the Central Bank
of Nigeria (CBN), the study employs the Autoregressive Distributed Lag (ARDL) modelling approach. Four
sector-specific ARDL models were specified, each subjected to extensive diagnostic and robustness
checks to ensure the reliability of the estimates. The findings reveal a contrasting effect: while FDI exerts
no statistically significant influence on manufacturing output, it has a strong and transformative impact
on agricultural performance. In addition, other capital inflows, including official development assistance,
development finance, and remittances, were found to significantly influence both sectors. The study
concludes that FDI is not a universal driver of growth, and its effectiveness depends on sectoral
characteristics, investment type, and policy environment. It contributes to the literature by offering one
of the first sector-specific comparative analyses of capital flows in Nigeria, providing evidence to guide
policies aimed at shifting the economy from consumption-driven patterns toward sustainable,
production-oriented growth.
