Using a macroeconomic approach, this work examined the role of foreign private investment (FPI) and capital formation in the economic growth of Nigeria.In order to achieve our objectives, we estimated the model of capital formation and economic growth for Nigeria. We found, that foreign private investment has a negative impact on capital formation in Nigeria. We also found that both foreign private investment and capital formation, in addition to other factors, significantly determine economic growth in Nigeria.Again we found that the long run impact of capital formation and foreign private investment on economic growth is larger than their short run impact. There is thus a long run equilibrium relationship among the variables as the error correction term is significant, but the speed of adjustment is small in both models. We estimated two stage least squares counterpart of the models in order to check for endogeneity bias.Our findings therefore have some policy implications: First, policies that enhance capital formation and FPI inflow do increase economic growth. Second, banking systems credit to domestic economy enhances capital formation and economic growth.

Recent macroeconomic developments in Nigeria's financial sector reveal a strong desire by the monetary authorities to reposition Nigeria's financial system to meet the trend of globalization. This study therefore, investigated the determinants of private domestic savings in Nigeria and also examined the impact of savings and bank credits on Nigeria's economic growth.Two models were adopted viz Distributed Lag-Error Correction Model (DL-ECM) and Distributed Model. The empirical results showed a positive influence of values of GDP per capita (PCY), Financial Deepening (FSD), Interest Rate Spread (IRS) and negative influence of Real Interest Rate (RIR) and Inflation Rate (INFR) on the size of private domestic savings. Also positive relationship exists between the lagged values of total private savings, private sector credit, public sector credit, interest rate spread, exchange rates and economic growth. We therefore recommend, among others, that government's effort should be geared towards improving per capita income by reducing the unemployment rate in the country. Also growth should be enhanced through improved savings, credit allocation and investments in highly productive sectors.