THE IMPACT OF FOREIGN DIRECT INVESTMENT AND INSTITUTIONAL QUALITY ON ECONOMIC GROWTH IN NIGERIA FROM 2005 TO 2024

The relationship between foreign direct investment and economic growth in Nigeria has attracted considerable attention over the years. The role played by foreign direct investment in economic growth in Nigeria cannot be overemphasized. Foreign direct investment is a key contributor to the economic growth in Nigeria. The specific objective of the study is to determine the correlation coefficient between Gross Domestic Product and Foreign Direct Investment, Gross Domestic Product and Institutional Quality, and Foreign Direct Investment and Institutional Quality in Nigeria from 2005 to 2024. Using Pearson correlation coefficient formula, we found that the correlation coefficient between GDP and FDI in Nigeria from 2005 to 2024 is -0.3328  showing a weak negative linear relationship, the correlation coefficient between GDP and Institutional Quality is -0.1654 showing a weak negative linear relationship, and the correlation coefficient between FDI and Institutional Quality is -0.1437 showing a weak negative linear relationship. The findings suggest that in Nigeria’s context, FDI alone may not guarantee economic growth and that strengthening institutional frameworks is crucial for translating foreign investment into sustainable economic development.