Domestic capital flow VS Foreign Capital flow in Nigeria: which one matter most?

Abstract

The path to achieving economic growth as well as the ultimate economic development is the greatest macroeconomic goal sought after by all global economies. Traditionally, these resources are classified as labour and capital. Therefore, we focus on the capital factor and its impact on economic growth. This study for the first time in Nigeria classifies the capital resources into two categories namely domestic and foreign capital and to compare their respective influence on economic growth. The results show that domestic capital is more influential in promoting the cause of economic growth whereas external debt as one of the components of foreign capital exerts serious level of threat to the course of economic expansion in Nigeria. Thus, this study recommends the need for the authority concern to look inward in resolving it economic challenges through domestic mobilization of resources. Sourcing for external capital should strictly take the form of FDI and foreign aids to augment the domestic capital for economic reasons with the view to expand the productive capacity of the economy.