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The economic growth of nations is substantially influenced by foreign direct investment. To better understand the factors that influence foreign direct investment, several studies have been done. This study contributed to the best understanding of the same concern in Rwanda. This study followed both descriptive and explanatory approaches and employed time series data from the years 1990–2020. This study specifically described the development of Rwanda’s inflow of foreign direct investment, A long-term link between Rwanda's gross domestic product and foreign direct investment was examined, and the factors influencing direct investment from abroad in Rwanda were estimated. Findings showed that during the period comprising 1990 and 2005, the inflow of foreign direct investment was low compared to that of 2006-2020. Again, the results evidenced a long-term link between Rwanda's gross domestic product and foreign direct investment. Lastly, findings revealed that the GDP, trade openness, infrastructure development index, and government expenditures have a profoundly favorable effect on foreign direct investment of high magnitude. The exchange rate and economic growth have a minor positive effect. Inflation has a significant negative impact. Hence, Rwanda should set policies and take concrete actions to attract foreign direct investors, whose role is essential to the national economy's growth. Once more, any factors that hinder the influx of direct foreign investment into the country should be strictly controlled.

I. INTRODUCTION	1
1.1 Background to the study	1
1.2 Statement of the problem	3
1.3 Objectives of the Study	4
1.3.1 General Objective	4
1.3.2 Specific objectives:	4
1.4 Hypotheses	5
1.5 The research questions	5
1.6 Significance of the Study	5
1.7 The scope and limits of the study	6
1.8 Definitions of terms	6
II. LITERATURE REVIEW	7
2.1 Introduction	7
2.1.1 Foreign direct investment	7
2.1.2 Foreign direct investment in Africa	8
2.1.3 Foreign direct investment in Rwanda	9
2.2 Theoretical literature	10
2.2.1 The theory of comparative advantage	11
2.2.2 The monopolistic advantage theory	12
2.2.3 The internalization theory	13
2.2.4 The eclectic paradigm	13
2.3 Empirical literature	14
2.4 Limitations of Previous Studies	18
2.5 Conceptual framework	18
III. METHODOLOGY	20
3.1 Introduction	20
3.2 Study area	20
3.3 Research design	22
3.4 Data types and sources	22
3.5 Description and measurement of variables	22
3.5.1 Gross domestic product (GDP)	23
3.6 Analytical Framework	27
3.7 Estimation procedures	29
3.7.1 Unit roots test	29
3.7.2 Test for cointegration	30
3.7.3 Vector error correction model	31
IV. DISCUSSIONS AND RESULTS	32
4.1 Introduction	32
4.2 Descriptive statistics	32
4.3 Objective One:	33
4.4 Comparison between two periods of time (1990-2005 and 2005-2020)	35
4.5 Dickey Fuller test for unit root	37
4.6 Objective two:	40
4.7 Objective three	41
4.7.1. Gross domestic product	42
4.7.2 Economic growth (growth rate)	42
4.7.3 Infrastructure Development Index	43
4.7.4 Exchange rate	44
4.7.5 Trade openness	45
4.7.6 Government expenditure	46
4.7.7 Inflation	47
4.8 The factors influencing the inflows of foreign direct investment in Rwanda	49
V.  CONCUSIONS AND RECOMMENDATIONS	51
5.1 Conclusions	51
5.2 Recommendations and Policy Implications	52
5.3 Areas for further empirical studies	52
VI. REFERENCES	54