Effect of Insecurity on Foreign Direct Investment in Nigeria (2010-2020)

Abstract

The paper examined the impact of terrorism on Nigeria's economy with a focus on foreign direct investment from the period of 2010 – 2020. Secondary data was obtained from the Global Terrorism Database (GTD), Central Bank of Nigeria Statistical Bulletin (2020), and Knoema (2021). The empirical model for the study was developed with the theoretical framework of game theory while Ordinary Least Square (OLS) estimation was used to analyze the study at a 5% level of significance. The probability value of F-statistics (0.041) revealed that the second-order polynomial regression model estimated for the study is statistically significant. The study concludes that the highest significant negative impact of terrorism on Nigeria's economy was produced by the current state of transnational terrorism mostly by terrorist organizations such as Boko Haram and ISWAP. It, therefore, recommends that there is a need for a collaborative effort from all relevant stakeholders involved in the security both at local and national levels to curtail and eradicate if possible the current state of transnational terrorism to allege the fear of foreigners when coming to invest in Nigeria.