Foreign Direct Investment and the Performance of the Insurance Sector in Nigeria

Oladeinde Akeem Raji & Adisa Taiwo Abel, Volume 3 Issue 2, December 2022 Pages 92-99, Published: 2022-12-09

Abstract

The study looked at how, over 30 years, from 1991 to 2020, foreign direct investment (FDI) impacted the growth of Nigeria's insurance market. OLS regression, the Augmented Dickey-Fuller unit root test, the Normality Test, regression, co-integration, and the Granger test were analysed after obtaining the data from the Central Bank of Nigeria (CBN) statistical bulletin. The results demonstrated that the GDP contribution of insurance is not considerably impacted by either foreign direct investment or exchange rate. Furthermore, the output of the insurance industry as a percentage of GDP decreases in the same way when the explanatory variable—foreign direct investment inflows—changes. This demonstrates that the inflows of FDI into the country have not significantly affected the performance of the insurance sector. To increase domestic investment in the nation, it was advised that the government modernize its infrastructure, offer life and property insurance protection, and maintain consistency in policy. To be more exact, increasing insurance investment and requiring insurance for all businesses.