Empirical Analysis of Effect of Macroeconomic Aggregates on Foreign Portfolio Investment in Nigeria

The study analyzed the effect of macroeconomic aggregates on foreign portfolio investment (FPI) inflows in Nigeria for the period 1986-2022. GDP growth rate, exchange rate, inflation rate and monetary policy rate were adopted as macroeconomic aggregates. Data was sourced from Central Bank of Nigeria (CBN) Statistical Bulletin (various years). Error correction modeling (ECM) technique was employed to analyze the data. Findings revealed that GDP growth rate had positive and significant effect on foreign portfolio investment (FPI) inflows in Nigeria while exchange rate had negative and significant effect on foreign portfolio investment (FPI) inflows in Nigeria. The study further showed that inflation rate and monetary policy rate had negative and insignificant effect on foreign portfolio investment (FPI) inflows in Nigeria. The study recommended that the Nigerian government should fashion out ways of growing her economy so as to encourage the attractiveness of the country to foreign investors. In this way, foreign portfolio investment (FPI) inflows would be increased.