Author(s): Oboreh Justina
The continuous decline in Nigeria manufacturing sector’s performance has been attributed to the poor inflow of Foreign Direct Investment (FDI). However, the recent increase in FDI inflow due to government reform programmes has not improved the performance of the manufacturing sector. This study investigates the effect of FDI inflow on Nigeria’s manufacturing sector in an effort to get to the root of the problem. Using Time Series Data for the period 1998-2018, the paper employed Unit Root Test, test for co-integration and Error Correction Technique to estimate the model. The empirical result suggests that FDI inflow was positive but not significant in explaining growth in manufacturing output. However, FDI inflow has a positive and significant effect on the overall economic growth. The empirical evidence from the study suggests that foreign direct investment is not impacting on Nigeria’s manufacturing sector.