Asian Journal of Sociological Research

The study investigated the impact of private domestic investment and foreign direct investment on the growth of the Nigerian economy using annual data. The data sets covered the period of 1981-2020 and were extracted from Central Bank of Nigeria Statistical Bulletin. The data sets were filtered using Augmented Dickey Fuller unit root test and Johansen cointegration test. Contrary to the test results, the vector autoregressive technique was used to analyze the effects of private domestic investment and foreign direct investment on economic growth. The result from the vector autoregressive analysis shows that economic growth was positively and significantly influenced by foreign direct investment while private domestic investment exhibited an insignificant influence on economic growth. Based on the findings, the study recommends that; the government should create an enabling environment to attract domestic and foreign investors, the existing policies and measures that are not investors’ friendly should be strengthened or repeal.