This paper examines the link between foreign direct investment and financial development with a view to ascertaining whether FDI is a substitute or complement to financial development in a sample of fifteen countries in ECOWAS from 1980-2014. The study employed the two step system Generalized method of moment. The result of the study is mixed. Specifically, the findings reveal that the development of the financial sector in the West African sub-region is actually not aiding FDI inflows as it is evident from our analysis that financial development is not positively significantly correlated with FDI inflows into the region. However, the analysis of the effect of foreign direct investment on financial development indicates that FDI influences the domestic financial sector development positively and significantly in most of the ECOWAS countries. This indicates that FDI have been complementing financial sector development. Generally, the study submits that foreign direct investment and financial development can act as both substitute and complement in the ECOWAS regio
