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Foreign Direct Investment And Its Impact On The Development Of Nigerian Economy (1990 – 2010)
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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 the 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
1. Does the FDI have a significant impact on the development of the Nigeria economy?
2. What is the nature and magnitude of the FDI on economic growth in Nigeria?
3. 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
I. To find out whether or not FDI has a significant impact on the growth of the Nigerian economy
II. To determine the nature and magnitude of the impact of FDI on economic growth in Nigeria
III. To ascertain the adequacy of the level of fiscal incentives given to foreign investors by the Nigerian government
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ABSRACT - [ Total Page(s): 1 ]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 unde ... Continue reading---
