Assessment of Macroeconomic Variables that Influenced the Participation of Foreign Direct Investors in Nigeria’s Commercial Property Market from 2000-2021

Abiodun  Jogunola; Austin Otegbulu; Obinna Umeh

Abiodun Jogunola University of Ibadan, Ibadan, Nigeria
Austin Otegbulu University of Lagos
Obinna Umeh University of Lagos

Keywords: Commercial, property market, Foreign direct property investment, Macroeconomic variables, Nigeria

Abstract

Purpose - This study aims to assess major macroeconomic variables that influenced the participation of foreign direct investors in Nigeria's commercial property market from 2000 to 2021. It identifies five FIGIP variables essential in determining the health of an economy that foreign direct commercial property investors could use as criteria for making their investment decisions.

Design / Methodology / Approach—Secondary data for the study were obtained from the statistical bulletins of the Central Bank of Nigeria (CBN) and the reports of the World Bank. The quantitative data were analyzed using descriptive statistical tools and multiple regression analyses. The study's hypotheses were tested using the Pearson product-moment correlation coefficient.

Findings – It was revealed that though Nigeria's GDP is presently the largest in Sub-Saharan Africa and used to be the largest in Africa for the past years, it did not result in the attraction of the highest foreign direct capital to its commercial property sector when compared with nations with lesser GDP size in the region. Furthermore, the study shows that the country's foreign exchange rate (multiple exchange rates) regime (though recently abolished but still thrives) is a significant factor mitigating the attraction of foreign direct investors into Nigeria's commercial property market.

Research Limitations—This study considered the commercial property sector; however, the impact of Nigeria's macroeconomic variables on the real estate market's residential and logistics property sectors could be considered for further study.

Theoretical / Social / Practical Implications—The national government should be aware of its responsibility to manage the economy so that the country's macroeconomic variables will boost the confidence of foreign direct commercial property investors.

Originality / Value—The Nigerian Investment Promotion Commission (NIPC) and the Central Bank of Nigeria (CBN) should find this study's recommendations useful in making important economic decisions.