Al-Hikmah University Journal

The impact and contributions of foreign investment towards the development of Nigeria’s economy cannot be over emphasized, from contributions of economic growth to transfer of technology, enhancement of balance of payment, creation of employment opportunities amongst others. A considerable decline has however been noticed in the inflow of foreign investment over the last few years, thus reducing the potential benefits the country stands to gain from such investment, hence the reason for these research study. The effect of FDI in manufacturing and processing, transport and communication, building and construction as well as business and trading services were all compared to ascertain their contributions to the country’s GDP as this is the yardstick for measuring the development or otherwise of a country. Secondary data from the CBN were analyzed using regression method. At the end of the research, it was shown that the contributions of FDI in the transport and communication and building and construction sectors were significantly high compared to manufacturing and processing and trading and business sectors. It was recommended that corruption and insecurity issues be dealt with to the barest minimum. The recommendations are given to help the country achieve economic development and harness the full benefits accruable from foreign investment.