This study investigates the impact of local content policies on foreign direct investment (FDI) inflows into Nigeria’s energy sector, with emphasis on oil, gas, and renewable industries. The dependent variable of interest is annual FDI inflows (US$) into the energy sector, while the core independent variables include local content policy intensity (LCP), regulatory quality (REGQ), and infrastructure availability (INFR). Control variables such as global oil prices and exchange rate volatility are incorporated to capture broader macroeconomic influences. The study adopts an ex-post facto research design using quantitative time-series data spanning 2000 to 2023. Data sources include the United Nations Conference on Trade and Development (UNCTAD), Central Bank of Nigeria (CBN), Nigerian Content Development and Monitoring Board (NCDMB), and World Bank governance indicators. A parsimonious error correction model (ECM) was employed to capture both short-run dynamics and long-run relationships between local content enforcement and FDI inflows. The findings reveal that local content policy intensity exerts a positive and statistically significant effect on FDI inflows, suggesting that properly implemented local content frameworks complement investment attraction by fostering domestic participation and technology transfer. Regulatory quality, though negatively signed, was statistically insignificant, indicating that inconsistencies in Nigeria’s institutional environment weaken investor confidence. Infrastructure availability had a positive but insignificant effect, implying that while physical facilities encourage investment, their uneven provision limits sustained impacts. The error correction term was negative and highly significant, confirming a stable long-run equilibrium, with approximately 67 percent of short-run deviations corrected annually. The study concludes that Nigeria’s local content framework, if effectively implemented, can simultaneously deepen domestic linkages and attract foreign investment. It recommends strengthening supplier-development programs, enhancing regulatory credibility, investing strategically in energy infrastructure, and stabilizing the macroeconomic environment. These measures will reinforce Nigeria’s ability to harness local content policies as both a development and investment strategy.

Keywords: Local content policy, Foreign direct investment, Energy sector, Regulatory quality, Infrastructure availability