Foreign Private Capital Accumulation and Economic Development in Nigeria 1970 -2010
Michael Baghebo, Samuel Edoumiekumo

Abstract
This study empirically examine the relationship between foreign private capital accumulation and economic development in Nigeria from 1970 – 2010. The stationarity and non-stationarity of the data series were examined using Group Unit Root Test. The variables attained stationarity after first differences. We established long-run equilibrium relationship among the variables (PCGDP, IEC, INFLA, FPI) using Johansen cointegration test . The short-run dynamic adjustment required for stable long-run equilibrium relationship was carried out using the error correction technique. It shows that the system adjust to long run equilibrium in both the over parameterized and parsimonious error correction model. FPI both in the current and one lag period in the parsimonious model impact positively on economic development. Its impact on economic development in the one lag period was positive and statistically significant while in the current period was positive and insignificant. The stable political environment couple with huge investment opportunities offered by Nigeria government to foreign investors may be responsible for this positive relation. We therefore recommend that Policies that will increase foreign private investment should be pursued vigorously as our results revealed a strong and statistically significant relationship with economic development. It is noteworthy that this will greatly benefit the manufacturing sector especially in the form of technology transfer. To optimally raise the level of foreign private capital accumulation in Nigeria, government has to maintain a steady supply of energy (power) and other infrastructural supplies. We cannot raise Gross Domestic investment and national productivity level without maintaining adequate supply of energy to all facets of our industrial machinery. Deliberate effort should be made by the Public and Private Sectors to develop indigenous technology through increase investment on Research and development [R&D] to solve the peculiar problems of developing countries.

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