Digital Financial Services, Foreign Direct Investment and Economic Growth in Nigeria
Keywords:
Digital Financial Services (DFS), Foreign Direct Investment (FDI), Digital Infrastructure, Neobanks, Fintech Growth in Nigeria
Abstract
- This study investigates how digital financial services, foreign direct investment (FDI) affect Nigeria's economic growth. The study used the Ordinary Least Squares (OLS) regression technique. The results revealed that the effect of point of sales terminal, Automated teller machine and mobile banking transactions are statistically insignificant, i.e., though, digital financial services have expanded, their role in economic growth is low. In addition, the study reveal that foreign direct investment (FDI) has a strong negative effect on Gross domestic product, which contradict modern economic theory. Therefore, to establish a strong environment for foreign direct investment, strong digital financial regulatory framework, high-value foreign direct investment, and most especially aggressive financial literacy needs to be in place.
References
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Akinlo, A. E. (2020). Foreign direct investment and economic growth: Evidence from Nigeria. Journal of Development Economics, 102(3), 345–362
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Okonkwo, J., & Uchenna, I. (2020). The impact of insecurity on foreign direct investment in Nigeria. Nigerian Journal of Economic Studies, 12(3), 45-62.
Okonjo, I., & Bello, R. (2023). Institutional Quality and the Regulatory Challenges of Fintech in Nigeria. Nigerian Journal of Economic Reform, 15(3), 50–66.
Oluwaseun, A., & Adegbite, T. (2020). Fintech adoption and foreign investment inflows in Emerging markets: The Nigerian experience. Journal of African Financial Studies, 7(2), 55-72.
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Oluwole, K., & Daramola, Y. (2022). Causality between Digital Finance, FDI and Economic Growth in West Africa. African Econometric Review, 9(1), 41–57.
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World Bank. (2021). The African Continental Free Trade Area: Economic and distributional Effects. Washington, DC: World Bank.
World Bank. (2021). the role of digital financial services in global investment trends. Washington, DC: World Bank.
World Bank. (2022). Expanding Financial Access through Digital Financial Services in Nigeria. Retrieved from https://www.worldbank.org
Adebisi, T., & Alade, F. (2023). Fintech, MSMEs, and Inclusive Finance in Nigeria: A Sectoral Analysis. Journal of Emerging Digital Economies, 7(1), 33–49.
Adeyemi, M. (2020). Cybersecurity and financial services: Implications for foreign direct investment in Nigeria. Journal of Digital Finance, 8(3), 78-95.
Akinlo, A. E. (2004). Foreign direct investment and growth in Nigeria: An empirical investigation. Journal of Policy Modeling, 26(5), 627-639.
Akinlo, A. E. (2019). Financial inclusion and economic growth in Nigeria: An empirical investigation. Economic Modelling, 36(4), 450-463.
Akinlo, A. E. (2020). Foreign direct investment and economic growth: Evidence from Nigeria. Journal of Development Economics, 102(3), 345–362
Boateng, K., Mensah, R., & Tetteh, A. (2021). Digital finance, productivity, and foreign investment in Ghana’s SME sector. African Economic Review, 13(2), 112–130.
Central Bank of Nigeria (CBN). (2021). Annual report and statement of accounts. Abuja: CBN.
Central Bank of Nigeria (CBN). (2023). Nigeria’s Digital Financial Services Framework. Retrieved from https://www.cbn.gov.ng
Central Bank of Nigeria (CBN). (2024). Financial Inclusion in Nigeria: Milestones and Future Directions. Retrieved from https://www.cbn.gov.ng
Chukwu, E., & Eke, S. (2022). Digital banking and foreign direct investment in Nigeria: A time series analysis. International Journal of Financial Studies, 10(1), 22-39.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.
Dunning, J. H. (1980). Toward an eclectic theory of international production: Some empirical tests. Journal of International Business Studies, 11(1), 9-31.
Ejemeyovwi, J. O., & Osabuohien, E. (2021). Financial inclusion, digital finance, and economic growth in Africa. Economic Policy Review, 9(4), 88-107.
Eze, C., & Adebayo, T. (2023). The Impact of Fintech Platforms on Financial Inclusion in Nigeria. Journal of Digital Finance and Economics, 11(2), 73–89.
Hymer, S. (1976). The international operations of national firms: A study of direct foreign investment. MIT Press.
Ibrahim, L., & Musa, H. (2022). Modeling Financial Sector Reforms and Economic Growth in Nigeria: An ARDL Approach. Nigerian Journal of Quantitative Economics, 16(4), 102–118.
International Monetary Fund (IMF). (2021). the Impact of Digital Transformation on Emerging Economies. Washington, DC: IMF Publications.
International Monetary Fund (IMF). (2023). Fostering Financial Inclusion through Digital Financial Services in Nigeria. Retrieved from https://www.imf.org
McKinnon, R. I. (1973). Money and capital in economic development. Brookings Institution Press.
Mwangi, J., & Wanjiru, S. (2020). Digital finance and foreign direct investment: Evidence from Kenya’s fintech ecosystem. Journal of African Business and Finance, 15(3), 155–176.
Munyanyi, W. (2022). Digital transformation and economic growth in Zimbabwe: A focus on mobile finance. Southern African Journal of Economics, 10(1), 75–91.
Rizwan, M., Ahmed, R., & Kapoor, N. (2021). Digital finance, financial inclusion, and FDI in emerging Asia. Asia-Pacific Economic Review, 24(1), 87–104.
Okonkwo, J., & Uchenna, I. (2020). The impact of insecurity on foreign direct investment in Nigeria. Nigerian Journal of Economic Studies, 12(3), 45-62.
Okonjo, I., & Bello, R. (2023). Institutional Quality and the Regulatory Challenges of Fintech in Nigeria. Nigerian Journal of Economic Reform, 15(3), 50–66.
Oluwaseun, A., & Adegbite, T. (2020). Fintech adoption and foreign investment inflows in Emerging markets: The Nigerian experience. Journal of African Financial Studies, 7(2), 55-72.
Schumpeter, J. A. (1911). The theory of economic development. Harvard University Press.
Oluwole, K., & Daramola, Y. (2022). Causality between Digital Finance, FDI and Economic Growth in West Africa. African Econometric Review, 9(1), 41–57.
Ozili, P. (2020). Digital finance, financial inclusion and the COVID-19 crisis: Evidence from Africa. Emerging Markets Finance and Trade, 56(10), 2315–2330.
United Nations Conference on Trade and Development (UNCTAD). (2022). World Investment report 2022: International tax reforms and sustainable investment. Geneva: UNCTAD.
Uzoho, M., & Nwankwo, J. (2024). Data Governance, Cybersecurity, and Investor Confidence In Africa's Digital Economy. International Review of Financial Technology, 12(1), 88–102.
World Bank. (2021). The African Continental Free Trade Area: Economic and distributional Effects. Washington, DC: World Bank.
World Bank. (2021). the role of digital financial services in global investment trends. Washington, DC: World Bank.
World Bank. (2022). Expanding Financial Access through Digital Financial Services in Nigeria. Retrieved from https://www.worldbank.org
Published
2025-06-26
How to Cite
Igbinovia, L. E., & Shittu, E. S. (2025). Digital Financial Services, Foreign Direct Investment and Economic Growth in Nigeria. Global Journal of Accounting, 11(1), 73-80. Retrieved from https://gja.unilag.edu.ng/article/view/2639
Section
Articles
