Private Investment and Political Instability: Evidence from Nigeria

Abstract

It is a widely held opinion that the resumption of growth in Africa will require, among other things, an increase in investment, which will have to come primarily from the private sector if growth is to be efficient and sustained. Using a simple neoclassical investment model, we examined the impact of political instability on private investment. The OLS estimates indicate that political instability does not have any significant direct impact on private investment. We recommend that a political framework that does not negatively affect aggregate spending will be favourable to private investment boom.