
The aim of this study is to explore empirically the relationship between foreign direct investment and gross domestic product growth in Nigeria. Using co-integration, Error correction mechanism, Unit roots techniques for this study analysis, the findings of the study are: First, the main determinants of FDI in Nigeria are market size (proxied by GDP), stable macroeconomic policies and a level of human capital that is tolerable by investors. Secondly, FDI contributes positively to Nigeria’s economic growth. It had a positive and significant relationship with the growth of the whole economy. In other words, trade is very important to growth of the Nigerian economy, and most importantly to the oil sector since the oil industry is producing mainly for export at the moment. From these findings we can assert that: FDI in Nigeria induces the nation’s economic growth. Although the overall effect of FDI on the whole economy may not be significant, the components of FDI positively affect economic growth.