REPERCUSSIONS OF INVESTMENT IN NETWORKING SECTOR ON ECONOMIC GROWTH IN NIGERIA

ABSTRACT This research investigates the dynamic relationship between investment in the telecommunication industry and economic growth in Nigeria from 1986 to 2023. The study aims to explore the impact of private and government investments, as well as the number of subscribers in the telecommunication sector, on the long-term economic growth of Nigeria. The research utilizes a robust data analysis approach, employing unit root tests and cointegration techniques to ensure the reliability of the findings. The unit root test, specifically the Augmented Dickey-Fuller (ADF) test, is employed to assess the stationarity of the variables, preventing spurious regression analysis associated with non-stationary time series. Cointegration analysis is then conducted to examine the existence of a long-run relationship among private investment, government investment, number of subscribers, and economic growth. The results indicate a positive and significant relationship between private investment in telecommunications and economic growth, as measured by real gross domestic product (GDP). A 1% increase in private investment is associated with a -0.074% increase in real GDP in the long run, highlighting the substantial impact of private investment on economic growth. Similarly, the telecommunications sector's GDP and the number of subscribers exhibit positive relationships with real GDP, with statistically significant impacts. The findings suggest that private investment, telecommunications GDP, and the number of subscribers are crucial factors contributing to Nigeria's economic growth. Post-estimation tests confirm the model's fitness and specification. Based on these results, several recommendations are made, including the provision of incentives to attract private investors, the promotion of competition to prevent monopoly, improvement of service efficiency, and active regulatory involvement. Furthermore, policy measures promoting investment in fixed assets, ensuring a constant power supply, and creating an enabling environment for capital investment are crucial for fostering sustainable economic growth in Nigeria.