This study seeks to contribute to the ongoing investigation on the growth effect of foreign direct investment in Nigeria. The study utilized annual time series data for the period 1981-2016 and the OLS estimation technique. Apart from the long-run estimation, the study also captured the short-run dynamics using an error correction model. The findings show that the role of FDI remained muted both in the long-run and short-run. However, the study established that growth in gross fixed capital formation and the dynamics of the naira to U.S. dollar exchange rate play important roles in economic growth in Nigeria, at least in the long-run. The study therefore concludes that there is need for Nigerian government to evolve and implement policies that can drive the inflow of foreign direct investments into the productive sectors of the economy in order to enhance the productive capacity of the economy. Such policies should encourage a stable economic and political environment that will enhance the confidence in foreign investors in the domestic economy