The Role of Import Substitution Strategy Programme on Foreign Direct Investments of Nigeria

The article examines foreign direct investment trend on import substitution program and factors influencing foreign direct investment in Nigeria, using ex-post facto design as the methodology and on the base of data collected for the period of 30 years (1988–2018) from Central Bank Statistical Bulletin and World Bank Data Base. The Augmented Dickey Fuller Tests to estimate the time series are stationary while the Johansen co-integration approach were used to find out if there is any significant correlation impact among the series. The result showed that industrial output, small and medium enterprises output and manufacturing export has direct and significant impact on foreign direct investment inflows. On the contrary, trade openness, manufacturing import and changes in political regime had direct but insignificant influence on foreign direct investment. It is recommended that Government should formulate policies and strategies that are robust, effective and fair playing for foreign investors, for this will encourage and attract more domestic and foreign investment, which will stimulate economic growth and development. In addition, financial institutions should be able to assist the small and medium sizeenterprises through government intervention fund. © 2021, Springer Nature Switzerland AG.