GLOBAL FINANCIAL INTEGRATION AND GROSS CAPITAL FORMATION IN NIGERIA

ABSTRACT

The purpose of this study is to examine the relationship between Nigeria's global financial integration and gross capital formation over the period 1990-2018. The specific objective was to determine the relationship between foreign direct investment, foreign portfolio investment, exchange rate and trade openness and foreign debt to Nigeria's gross capital formation. This study uses the Ordinary Minimum System Method (OLS), according to data collected from the 2020 CBN Statistical Bulletin. The study found that FDI, while not significant, is positively associated with improving Nigeria's gross capital formation. This is now the basis for the government to create a favorable environment for attracting foreign investors. The survey also found that openness is very important and governments need to liberalize their economies. This will increase capital activity, open up markets and boost sector development in the long term, given the significant positive impact of the private sector, governments, private investors and less regulated cross-border trade.