INSECURITY AND DOMESTIC INVESTMENT IN NIGERIA
Abstract
The paper sought empirically to answer the question, of whether insecurity significantly affects the value of domestic investment in Nigeria during the period 1999-2020. Specifically, the paper examined the effect of insecurity, interest rate, inflation rate, and money supply on investment. Annual time series data were extracted from the CBN statistical bulletin and World Development indicator. Using the terrorism index as a proxy for insecurity, the OLS multiple regression model captured domestic investment as a function of insecurity and selected macroeconomic variables. Results indicated a significant effect of insecurity, interest rate, inflation rate, and money supply on domestic investment in Nigeria. However, money supply velocity had a positive effect on domestic investment, while interest rates, inflation rates and insecurity adversely affected domestic investment during the period. The paper recommends deliberate and frontal political will by the government to curb insecurity and food inflation to attract investments in the domestic economy.