Abstract
This study examined the impact of foreign direct investment inflows on unemployment in Nigeria for the period of 1981-2019. The main objective of this research work is to examine the impact of foreign direct investment inflows on unemployment in Nigeria the specifically the study sought to examine if FDI significantly affects the level of unemployment in Nigeria and to examine the trend of FDI in Nigeria, and also to formulate effective policy recommendations that would help address the research problem this study seeks to address.
The study used Error Correction Mechanism (ECM) to examine the relationship between foreign inflows and unemployment in Nigeria which was used for estimating both short-term and long-term effects of one time series of this study on another.
The study found that the level of foreign direct investment is positively related to the rate of unemployment in the short run but negatively related to the rate of unemployment in the long run. Also, the level of gross fixed capital formation is positively related to the rate of unemployment in the short run negatively related to the rate of unemployment in the long run. Also, the level of gross domestic product is negatively related to the rate of unemployment in the short run but positively related to the rate of unemployment in the long run. Finally, the level of exchange rate was found to be positively related to the rate of unemployment in the short run but negatively related to the rate of unemployment in the long run.The study therefore recommends that the government should relax FDI regulations, provide open, transparent, and dependable conditions for all types of businesses, both local and foreign, including ease of doing business, access to imports, relatively flexible labor markets, and intellectual property rights protection for this would help FDI create more jobs in the country. Also,. FDI limitations should also be eased by the government. Government should provide open, transparent, and dependable conditions for all types of businesses, both local and foreign, including ease of doing business, access to imports, relatively flexible labor markets, and intellectual property rights protection for this would help FDI create more jobs in the country.
