Fuoye Journal of Management, Innovation and Entrepreneurship. ISSN: 2814-2578. Vol. 1. No. 2, 2022. 130 FOREIGN DIRECT INVESTMENT INFLOWS, EXCHANGE RATE AND NIGERIA’S ECONOMY: AN AUTOREGRESSIVE DISTRIBUTED LAG APPROACH Osmond Chigozie AGU (PhD) Department of Economics, Federal University, Oye-Ekiti, Ekiti State, Nigeria. E-mail: osmond.agu@fuoye.edu.ng Tel Contact: +2348065128698 Orcid Details: https://orcid.org/0000-0002-8290-1106 Adepoju Adeoba ASAOLU (FNIMN, ACIB, PhD) Department of Finance, Federal University, Oye-Ekiti, Ekiti-State, Nigeria. E-mail: adepoju.asaolu@fuoye.edu.ng Tel Contact: +234 803 401 8357 Orcid Details: https://orcid.org/0000-0001-5404-0604 ABSTRACT This study examined the impact of Foreign Direct Investment inflow and exchange rate on Nigeria’s economic growth between 1980 and 2021 to ascertain the influence of foreign direct investment and exchange rate on Nigeria’s productivity. The study investigated the relationship among study variables in the long and short run using the bound testing and Auto-Regressive Distributed Lag (ARDL) model. The estimation results revealed that foreign direct investment has no significant impact on the economic growth rate in the long term. At the same time, in the short run, there is a negative relationship between foreign direct investment and gross domestic product growth rate. There is a positive and statistically significant relationship between exchange rate and gross domestic product growth rates in the short and long run. Therefore, the Monetary Policy Committee (MPC) of Nigeria’s Central Bank and all other concerned stakeholders should improve their efforts in regulating the constant fluctuation in the exchange rate in the country. Finally, the Monetary Policy Committee (MPC) may implement appropriate policy measures (either contractionary or expansionary) to regulate economic and monetary flow at any point to promote economic growth in Nigeria. Keywords: Bound Testing; FDI; ARDL; Nigeria; Macroeconomics Jel Classification: B22; D51; E44; L98 INTRODUCTION An inadequate supply of funds has hampered capital investment in many emerging economies. To alleviate this ugly situation, the governments of these countries concentrate more on investment, notably FDI, to ensure employment and impact EG positively (Alex, 2011). Imports from other countries must be brought in to close the gap between expected gross domestic investment and national savings. Productivity gains brought on by newer technology are the primary reason for the growth of FDI, which is useful in correcting the fiscal deficit gap if the domestic savings ratio remains low (Andrew et al., 2022). FDI inflows to Nigeria have increased from $542 Million in 1981 to roughly $8.84 Billion in 2011 and dropped from $8.84 Billion in