ABSTRACT

 Most Countries strive to attract Foreign Direct Investment (FDI) because of its acknowledge advantages as a tool of economic development. Africa and Nigeria in particular joined the rest of the world in seeking FDI as evidenced by the formation of the new partnership for Africa's Development (NEPAD), which has the attraction of foreign investment to Africa as a major component. This study investigated the empirical relationship between non-extractive FDI and economic grow in Nigeria and examined the determinants of FDl into the Nigerian economy. Result suggestions that the determinants of FD! in Nigeria are market size, infrastructure development, stable macroeconomic policy, openness to trade and available human capital; However, are not FDI inducing. FDI in Nigeria contributes positively to economic growth although the overall effect of FDI on economic growth may not be significant, the component of FDI does have a positive impact. The FDI in the communication sector has the highest potential to grow the economy and is in multiple of that of the oil sector. The manufacturing sector FDl negatively affects the economy reflecting the poor business environment in the country. The level of available human capital is low and there is need for more emphasis on training to enhance its potential to contribute to economic growth.