FOREIGN DIRECT INVESTMENT AND IT'S IMPACT ON THE DEVELOPMENT OF NIGERIAN ECONOMY (1990-2010)
ABSTRACT
Generally, policies and strategies of Nigerian government towards foreign direct investment are shaped by two principal objectives of the desire for economic independence and the demand for economic development. Multinational corporations are expected to bring into Nigeria foreign capital in the form of technical skills, entrepreneurship, and technology and investment fund to boost economic activities thereby raising the standard of living in Nigeria.
The main issues in this paper relates to understanding the effects of foreign direct investment on the Nigerian economy as well as our ability to attract adequate amounts, sufficient enough to accelerate the price of our economic growth and development. From related research and studies, it was revealed that multinational corporations are highly adaptive social agents and therefore, the degree to which they can help in improving economic activities through FDI will be heavily influenced by the policy choice of the host country.
Therefore this research work examines FDI and development of the Nigerian economy from 1990 / 2010, a period o 20 years, using an ordinary least square method of regression, the trade o relationship between FDI and GDP in Nigeria was examined, the result showed that FDI has a positive relationship with GDP and a positive change in FDI will increase GDP by 50.594 and also the nature and magnitude of FDI can be determined.
CHAPTER ONE
1.1 Background Of The Study
Since Nigeria got her independence in 1960, it has created policies which are geared towards promoting the Nigerian economic growth and development by influencing domestic investment or indirectly policies which are aimed at stimulating the flow of finance in any growing economy. This is so given that in the literature there are divergent views on the nature of effects of foreign direct investment. It has been argued to be the most growth stimulation sources of foreign finance in any growing economy. There are divergent views on the nature of foreign direct investment on host economies. There are views that foreign direct investment produce positive effects on host economies and they argue that some of the benefit are in the form of externalities and adoption of foreign technology. Employers training and introduction of new process by the foreign firms.
Developing countries in Africa, Asia and Latin America have come increasingly to see that foreign direct investment is a source of economic development, modernization, income growth and employment and poverty reduction. These
countries are successfully developing their economies under outward oriented policies albeit in varying degrees.
Globally economists tend to favor the free flow of capital across national borders because it allows capital to seek out the highest rate of returns. Nigeria is reputed to be buoyantly blessed with an enormous minerals and human resources but believe to be at a high risk market for investment. Foreign direct investment can also be veritable booster to an economy (Omagbemir 2010).
Nigeria in the past and present has a large population and enlightened market. A real potential market, an investment conscious society and a conclusive sustainable environment for foreign private investment to thrive in the development of the economy.
Foreign direct investment can be described as investment made so as to acquire a lasting management interest (for instance 10% of voting stocks) and at least 10% of equity shares main enterprise operating in another country other than that of investor country(Willima 2003, World Bank 2007). Policy makers believe that foreign direct investment (FDI) produce positive effects on host economies. Some of these benefits are in the form of externalities and adoption of foreign technology. Externalities can be a form of licensing agreement, limitation, employee training and introduction of new processes by the foreign firms (Alfaro 2006).
According to Utomi (2007) foreign direct investment (FDI) via transnational corporations do posses the needed capabilities which can be put to the services of growth in any host economy.
1.2 Statement Of The Problem
One of the major economic problems in less developed countries (LDC) is low per capital formation to finance the necessary investment for economic growth.
Capital was once regarded by most economists as the principal obstacle to economic development and this made a lot of attention to be paid to capital formation. The role of capital in economic growth is still regarded as very crucial. Both theory of “big push” and the concept of “vicious cycle” are all a test to the crucial role of capital in the growth process. The theory of big push simply states that the stagnant and undeveloped economies need huge and sudden injection of large capital from foreign direct investment.
However in the literature FDI is found to be related to export growth while human capacity building is found to be related to FDI floe.
Most studies on FDI and growth are cross country studies. However FDI and growth debates are country specific. Among Nigeria, studies like those by Otepola (2002), Oyeyide (2005), and Akinlo (2004) examined the importance of FDI on growth for several periods and the channel through which it may be befitting the economy.
In the literature there exist, a direct positive link between export growth and the growth of an economy. This growth in export can further be traced down to the level of investment which in most cases can be domestic or foreign investment.
This is so given that foreign capital remains the best option to filling the saving investment gap where it exists. Given this fact assessment will be based on the existing link among investment, export, exchange rate and economic growth.
1.3 Research Questions
Based on the objective of the study the following research questions are necessary or the formulation of hypothesis
- Does the FDI have a significant impact on the development of the Nigeria economy?
- What is the nature and magnitude of the FDI on economic growth in Nigeria?
- Are there enough incentives by the governed to encourage the flow of FDI
1.4 Objective Of The Study
The objectives of the study are as follows
- To find out whether or not FDI has a significant impact on the growth of the Nigerian economy
- To determine the nature and magnitude of the impact of FDI on economic growth in Nigeria
- To ascertain the adequacy of the level of fiscal incentives given to foreign investors by the Nigerian government
1.5 Significance Of The Study
It is hoped that this study will act as a reference point for policy debate in the idea of FDI in our economy.
On the whole it is envisaged that the research findings will be of the following specific significance.
- It will serve as a guide to economic policy makers and planners in future decisions concerning FDI
- It is equally hoped that the findings and recommendation of this study will be of immense benefit not only to the government but also to other researchers and students for future research undertakings
1.6 Research Hypothesis
In order to find answers to the questions raised in the research questions, the following hypothesis are necessary and would be tested and it will either be accepted or rejected based on the research findings
- Null hypothesis (HO): Foreign direct investment has a significant impact on the development of the Nigeria economy
Alternate hypothesis (H1): Foreign direct investment has a significant impact on the development of the Nigerian economy - Null hypothesis (HO): The nature and magnitude of foreign direct investment on economic development in Nigeria cannot be determined
Alternate hypothesis (H1): The nature and magnitude of foreign direct investment on economic development in Nigeria can be determined.
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
The review of relevant literature is the main topic of this chapter. A literature review covers theoretical and methodological contributions to a certain issue in addition to the state of knowledge at the time of writing. It provides information about the state of the art in relation to the subject you are writing about. It examines the body of work on the chosen subject. The literature evaluation in this study comprises the …
Procedure for Downloading the PDF (Docx) Material
Foreign Direct Investment and It’s Impact on the Development of Nigerian Economy (1990-2010) can be downloaded by requesting the full set of materials at the project or seminar cost. The document will be sent via Microsoft Word (MS-Word) format via WhatsApp (e-mail) following payment confirmation.
| Seminar Material Cost ₦3,000 | Project Material Cost ₦5,000 |
Request Complete Material
 | Click here to request the Complete Material via WhatsApp including;
|
Disclaimer for Complete Material Utilization
The displayed research work titled "Foreign Direct Investment and It's Impact on the Development of Nigerian Economy (1990-2010)" is stated as a research guideline towards accomplishing your assigned project / seminar research work. All the research materials on this website are ONLY for research purposes and should be used as a guideline in developing your research work. For no reason should you copy word for word as projectlist.com.ng will not be liable for any who copied the material. By ordering the complete research guideline, it signifies that you've accepted our terms of service.
Frequently Asked Questions (FAQ)
Can the material for “The Impact of School Children Abduction of Educational Development in Nigeria” be used as a guide for Criminology and Security Studies Project?
Yes it can be used — School Children Abduction appears to be one of the most technical and most lucrative in nature, considering the fact that a lot of people are involved unannounced. The study evaluates the Impact of School Children Abduction of Educational Development in Nigeria. In achieving this aim, the following specific objectives were laid out to examine the factors encouraging abducting of school children, examine the impact of school children abduction on educational development, assess the relationship between education and insecurity problems associated with abducting, ascertain the sustainability of government interventions in Nigerian Educational system, and examine the consequences of abducting school children in Northern Nigeria The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from …
Can this topic “An Empirical Review of Sanitation and Hygiene” be used for Nursing (Science) Project?
Yes it can be utilized for research — The purpose of the study was to review the relevant literature of sanitation and hygiene regarding women in poor urban centres and explore ways on empowering women on sanitation and hygiene. The aim of the study was to describe the typical concerns for women regarding sanitation and hygiene in Kibera as well as providing women with practical suggestions to improve Hygiene and Sanitation in slums. The data collection method involved reviewing relevant literature which consisted research materials from poor urban centres and developing countries. In addition, United Nations publications and educational books for research were referred to. The findings suggest that there are seven sanitation and hygiene concerns that women experience: Toileting, water, poverty, problems caused by poor sanitation, communicable diseases, insecurity …
Can this topic “The Impact of External Auditing on the Performance of Local Government Council in Nigeria” be used for Accountancy / Accounting Project?
Yes it can be utilized for research — Local Governments in Nigeria have been featured with gross financial mismanagement to the extent that the government had decides to institute periodical restricting and reform programmers. In the existence of integrity, effectiveness and efficiency in utilization of resources, the council can easily obtain unqualified audit opinion from CAG. Failure to obtain unqualified audit reports may take the council into access to LGCDG and therefore gives a negative impact to the authority it terms of service provision. It was that reason therefore, that prompted to carry about a study to assess whether local authorities effectively implement financial management systems by conducting a study at uyo Municipal Council. The research methods employed were:-questionnaires observation and interviews. The researcher employed simple selection techniques. …
Can the material for “Design and Simulation of Vehicle Speed Control System” be used as a guide for Computer Science (CS) Project?
Yes it can be used — This proposed work is an attempt to control the speed of the vehicle designed with computer software to enable the third party or owner to get the location, speed and activity of the driver. To achieve this, the system can transmit the information in real time. The use of GSM/GPRS technologies allows the system to track the objects and provide the up-to-date information. This information is authorized to specific users over the internet as the server gets the information. It is the tele-mointoring system to transmit data to the remote user. Thus the applications are used in real time traffic surveillance. This study proposes a prototype model for location tracking using Geographical Positioning System (GPS) and Global System for Mobile …
Can the material for “Design and Implementation of a Computerized Personnel Auditing System of a Local Government Administration” be used as a guide for Computer Science (CS) Project?
Yes it can be used — Personnel auditing system is an application software that executes a recurring evaluation to assess the efficiency of personnel management and identify the actions necessary for optimizing the use of human resources. The aim of the study is to design and implement a Computerized Personnel Auditing System. In achieving this aim, the following specific objectives were laid out to develop an application that will give a more accuracy and timely information for government decision making, and provide facilities for quick access to stored data giving at random in other to assist in management functions. The motivation that led to the implementation of the proposed system is that the accumulation of this document in files creates low of storage problem as in …
Is the topic “Problem of Unwanted Pregnancy on Adolescent Education” recommended for Teacher Education Project?
Yes it is highly recommended — The study was carried out to identify the Problem of Unwanted Pregnancy on Adolescent Education. Investigation revealed that despite greater attempts have been made to manage teenage pregnancy over the years, with little immediate solution in sight, concern over adolescent pregnancy has grown. The government and other stakeholders have created youth-friendly clinics, conducted campaigns, and made interventions, yet the prevalence rates still increase. The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from the respondents for this project. Primary data were collected from the primary source which questionnaire was used as an instrument of data collection while secondary data were sources from textbooks, journals, newspapers and the internet were employed. The data were …
Can this topic “An Examination of the Role of Taxation in Revenue Generation and Economic Development in Nigeria” be used for Taxation Project?
Yes it can be utilized for research — Government revenue refers to the revenue received by a government to finance its operations and development projects. The study was carried out to examine the Role of Taxation in Revenue Generation and Economic Development in Nigeria. In achieving this aim, the following specific objectives were laid out to examine the roles or revenue generation in the economic growth and development and find out the problems confronting revenue mobilization and how to improve it. Investigation revealed that the state of economic development of the society affects revenue collection provision of enhanced infrastructures enhance ability to pay as this, gets as impetus. There is evidence of dissatisfaction with poor conditions of services as well as working environment. There is lack of motivation …
Can the material for “The Impact of Foreign Investment on the Nigerian Economy” be used as a guide for Economics Project?
Yes it can be used — This study examined the relationship between foreign private investment and economic growth in Nigeria over the period of 1980 − 2009. In doing so, we investigate the impact of foreign private investment on economic growth in Nigeria, as well as the causal relationship between them. We used an ordinary Least Square Regression (OLS), based on objective one, we found that foreign private investment causes economic growth in Nigeria, and economics growth does not cause foreign private investment as it is a unidirectional movement and no feedback effect. On the second objective, the findings revealed that economic growth directly related to inflow of foreign private investment and it is also statistically significant implying that a good performance of the economy is a …
Can the material for “An Analysis of Bacteriology in Halls of Residence Water Tanks” be used as a guide for Microbiology Project?
Yes it can be used — Water is one of the indispensable resources for the continued existence of all living things including man. The provision of an adequate supply of safe drinking water was one of the eight components of primary health care identified by the International Conference on Primary Health care in 1978. This study investigated the bacteriological quality of water in Imo State, Nigeria. A total of five Water Tank collected around Imo State University premises where examined for registration number, manufacturing date, expiry date and net volume (cl). Physiochemical analysis carried out showed that these Water Tanks where in accordance with the World Health Organization (WHO) Standard. The Water Tanks cultured on bacteriological media showed the presence of coliform bacteria and other pathogenic …
Can the material for “Analysis of Twin Deficit and Manufacturing Sector of Nigerian Economy (1981 - 2015)” be used as a guide for Economics Project?
Yes it can be used — The study investigated the relationship between twin deficit and manufacturing sector of Nigerian economy for the period of 34 years (1981 to 2015). The study adopted the time series data using the OLS estimation technique to analyze the data. The model was estimated using a linear specification methodology. It was discovered Current account deficit and fiscal deficit exerts a negative and significant relationship with manufacturing output in Nigeria while Real Gross Domestic Product has a positive and significant relationship with manufacturing output in Nigeria. The study recommended that Government should endeavor to live within its means. Persistent budget deficit may lead to chronic current account disequilibrium which may further inhibit economic growth. Government must ensure that it pursues fiscal policies …