Foreign Direct Investment and Poverty Reduction in Nigeria: Impact and Structural Constraints
Abstract
This study investigates the impact of Foreign Direct Investment (FDI) on poverty reduction in Nigeria between 2015 and 2024, with a focus on the structural constraints that influence its effectiveness. Despite Nigeria?s status as one of the leading recipients of FDI in Africa, poverty remains widespread, indicating a disconnect between foreign investment inflows and inclusive development outcomes. The study adopts a social survey research design, utilising primary data collected through structured questionnaires administered to staff of selected public and private institutions involved in investment and economic development, alongside secondary data from relevant literature and institutional reports. Data were analysed using descriptive statistical techniques. The findings reveal that FDI has contributed to poverty reduction mainly through job creation and economic growth, as a majority of respondents acknowledged its positive role in employment generation and income improvement. However, the study also finds that the poverty-reducing impact of FDI is significantly undermined by persistent structural challenges, including corruption, insecurity, weak regulatory frameworks, and inadequate infrastructure. These factors limit the capacity of foreign investment to generate broad-based welfare gains and strong linkages with the domestic economy. Anchored on New Growth Theory and Dependency Theory, the study concludes that while FDI has the potential to reduce poverty in Nigeria, its effectiveness largely depends on the quality of institutions and the broader socio-economic environment. The study recommends strengthening governance structures, improving security, enhancing regulatory consistency, and investing in critical infrastructure to maximise the poverty-reducing benefits of foreign direct investment in Nigeria.
Keywords
Foreign Direct Investment, Poverty Reduction, Structural Constraints, Economic Growth.
Citations
IRE Journals:
Mase Dondo Victor, Assoc. Prof. Canice E. Erunke, Dr. Atsiya Godiya Pius, Dr. Aminu Ibrahi, Hassan Haske Joel-Kadonrii "Foreign Direct Investment and Poverty Reduction in Nigeria: Impact and Structural Constraints" Iconic Research And Engineering Journals Volume 9 Issue 7 2026 Page 1661-1670 https://doi.org/10.64388/IREV9I7-1713708
IEEE:
Mase Dondo Victor, Assoc. Prof. Canice E. Erunke, Dr. Atsiya Godiya Pius, Dr. Aminu Ibrahi, Hassan Haske Joel-Kadonrii
"Foreign Direct Investment and Poverty Reduction in Nigeria: Impact and Structural Constraints" Iconic Research And Engineering Journals, 9(7) https://doi.org/10.64388/IREV9I7-1713708
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