FOREIGN PORFOLIO INVESTMENT AND ECONOMIC GROWTH NEXUS IN NIGERIA (1986-2017)

This study examined the relationship between foreign portfolio investment and economic growth in Nigeria. Time series data used in this study were collected from the Central Bank of Nigeria Statistical Bulletin. The study employed econometric analytical tools such as unit root test, co-integration test, Ordinary Least Squares mechanism and granger causality tests. Foreign Portfolio Investments in Equity and Debt Securities had insignificant relationship with gross domestic product. Also Market capitalization and trade openness that served as control variables in this study showed significant relationship with gross domestic product. Consequently the study recommends that policy makers should endeavour to boost the capital market activities so as to foster capital transactions and subsequently increase economic performance and growth in the nation. Finally, transformation policy of the Federal Government, of Nigeria should target macroeconomic stability, effective institutional settings, and investment friendly policies and discourage capital flight of any form in the country.