The impact of foreign direct investment (FDI) on employment in Nigeria (1970 -2018)

Abstract

The purpose of this study is to determine the impact of foreign direct investment (FDI) inflows on employment in Nigeria from 1970 to 2018. Globalization has encouraged FDI flows, and this has enhanced economic growth and employment growth in many countries. Nigeria is endowed with natural resources and is therefore able to attract foreign investors, thus creating employment opportunities, however, the country has not been able to attract and sustain consistently high FDI inflows nor has the country been able to grapple with its persistent high unemployment. To assess the research problem, three objectives were set. First, to provide a comprehensive explanation of the trend of FDI into and employment in Nigeria between 1970 and 2018, second to empirically investigate the relationship between FDI and employment; and third, to provide policy recommendations based on the findings of the study. The study therefore adopts the Vector Autoregression and Vector Error Correction model (VAR/VECM) estimation techniques to determine the long-run and short-run impact of the FDI inflows on employment in Nigeria. The results confirm that FDI is positively related to employment in Nigeria. Therefore, this study recommends that the Nigerian government should increase its focus on attracting FDI inflows to contribute to the reduction of the rate of unemployment in the country. Policy measures for macroeconomic stability, to improve security, enhance political stability and infrastructure development should be undertaken simultaneously, both to encourage new FDI investments and to retain the current investors in the country.

Sepheo sa phuputso ena ke ho fumana tshusumetso ya matsete a tswang dinaheng tse kantle (FDI) a kenang mosebetsing Nigeria ho tloha 1970 ho isa ho 2018. Ho ikopanya ha ditjhaba tsa lefatshe ho kgothaleditse diphallo tsa FDI, mme sena se matlafaditse kgolo ya moruo le kgolo ya mesebetsi dinaheng tse ngata. Nigeria e na le mehlodi ya tlhaho e mengata mme ka hona e kgona ho hohela bo-ramatsete ba tswang dinaheng tse kantle, kahoo e theha menyetla ya mesebetsi, leha ho le jwalo, naha ha e so kgone ho hohela le ho boloka diphallo tse kenang tsa FDI ka mokgwa o tsitsitseng kapa hona ho kgona ho sebetsana le ho hloka mosebetsi ho ntseng ho tswela pele. Ho hlahloba bothata ba dipatlisiso, ho behilwe dipheo tse tharo. Sa pele, ho fana ka tlhaloso e pharaletseng ya boemo ba tlwaelo ba FDI kahare ho le ho hirweng Nigeria pakeng tsa 1970 le 2018, sa bobedi ho batlisisa ka matla kamano pakeng tsa FDI le mosebetsi; mme sa boraro, ho fana ka dikgothaletso tsa leano tse thehilweng diphumanong tsa phuputso. Ka hona phuputso e sebedisa mekgwa ya kgakanyo ya Vector Autoregression le Vector Error Correction (VAR/VECM) ho fumana phello ya nako e telele le e kgutshwane ya diphallo tsa FDI mosebetsing Nigeria. Diphetho di tiisa hore FDI e amana hantle le mosebetsi Nigeria. Ka hona, phuputso ena e kgothalletsa hore mmuso wa Nigeria o eketse tlhokomelo ya ona ho hoheleng ha ditjhelete tsa FDI ho kenya letsoho phokotsong ya sekgahla sa ho hloka mosebetsi kahare ho naha. Mehato ya leano bakeng sa botsitso ba moruo o moholo ho ntlafatsa tshireletso, ho matlafatsa botsitso ba dipolotiki le ntshetsopele ya meralo ya motheo e lokela ho etswa ka nako e le nngwe, ho kgothaletsa matsete a matjha a FDI le ho boloka bo-ramatsete ba hajwale kahara naha.