CORRELATE OF FOREIGN CAPITAL INFLOWS AND SECTORIAL PERFORMANCE OF THE NIGERIAN ECONOMY
Yekeen. O. Abdul-Maliq
Department of Banking and Finance,
University of Abuja, Nigeria
Abstract
This paper investigates the correlation among different types of foreign capital flows and sectorial output growth in the Nigerian economy for a thirty year period-1986-2015. Based on canonical correlation analysis (CCA), the paper examines which of the seven types of foreign capital is most positively correlated with output growth in the seven sectors of the economy within the period Result shows that workers’ home remittances (WHR) made the highest overall contribution to output growth in the period with 184 67 aggregate beta co-efficient, followed by foreign aids (FA) external borrowing (EXTD) and foreign direct investment (FDI) with beta co-efficient of 4.11, 0.4, and 0.44 respectively Foreign portfolio investment (FPI), overseas development (ODA) and trade and suppliers’ credit (SCR) made negative or negligible impacts on growth WHR is also shown to have impacted (positively correlated with) all sectorial output growth except petroleum and gas sector The paper recommends that while efforts should/could be continued or sustained to attract WHR more FDI friendly policies, especially those that attract multinational corporations would be a surer way to fasten economic growth in Nigeria in view of experiences from other developing countries.
Key Words: Correlation, Foreign Capital, GDP Growth, Multinational Corporations