Effect of Economic Globalization on Economic Well-Being in Nigeria

This study examined the effect of economic globalization on economic well-being in Nigeria, using per capita income as a proxy for welfare. The study specifically investigated the influence of exchange rate, foreign direct investment, official development assistance, portfolio investment, and net export on per capita income over the period 1990–2025. Time series data were sourced from the World Development Indicators and the Central Bank of Nigeria Statistical Bulletin. An econometric approach was adopted, and relevant diagnostic and estimation techniques were employed to ensure the robustness of the results. The empirical findings revealed that economic globalization variables jointly exert a significant influence on economic well-being in Nigeria. Exchange rate was found to have a negative and statistically significant effect on per capita income, indicating that currency depreciation undermines welfare due to Nigeria’s heavy reliance on imports. Foreign direct investment showed a positive and statistically significant impact on per capita income, highlighting its role in promoting productivity, employment generation, and income growth. Net export also exhibited a positive and significant relationship with economic well-being, suggesting that improved trade performance enhances income levels. However, official development assistance and portfolio investment were found to have positive but statistically insignificant effects, implying limited welfare benefits from foreign aid and short-term capital inflows during the period under review. The study concludes that while economic globalization has the potential to improve economic well-being in Nigeria, its benefits are uneven and depend largely on the structure of external inflows, exchange rate stability, and domestic institutional capacity. The study therefore recommends policies that promote productive foreign investment, export diversification, exchange rate stability, and effective utilization of external resources to ensure that globalization translates into sustained improvements in economic well-being in Nigeria.