Predicting Net Foreign Direct Investment in Nigeria Using Box-Jenkins ARIMA Approach

Using annual time series data on net FDI inflows for Nigeria from 1960 to 2017, the study analyzes net FDI inflows using the Box – Jenkins ARIMA methodology. The Augmented Dickey-Fuller tests show that Nigeria FDI net FDI inflows data is I (1). Based on the AIC, the study presents the ARIMA (0, 1, 2) model. The diagnostic tests further show that the presented model is not only stable but also acceptable for explaining net FDI dynamics in Nigeria. The results of the study indicate that net FDI inflows in Nigeria are likely to deteriorate over the next decade. The study offers important policy recommendations in an effort to help policy makers in Nigeria on how to promote and maintain the much needed net FDI inflows in Nigeria