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Determinants Of Investment In Nigeria (1985 - 2011)
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Although successive government has implemented policies and strategies
raising the level of savings and investments, this policy so far has
been erratic as a result of the recent change in government as a result
of political instability.
In addition, the experience of East Asia
countries suggested that an investment rate of between 20 and 25 percent
could endanger growth rate of between 7 and 8 percent. Strategically
evidence reveals that output represented as the GDP in Nigeria shows a
picture growth after the civil war, following the oil boom of the 1970
such that growth rate stood at 21.3% in 1971(Bage 2003).
Therefore,
for Nigeria to register increase in growth and development there is need
to increase the private investment that will lead to higher growth, as
was the case of Asian countries.
Finally an analysis of domestic
investment require a simultaneous link to GDP as aggregate factor
interest rate and other unique variables that reacts to fluctuations in
investment like debt ratio, business environment real exchange rate
government expenditure and provision of infrastructure etc.
1.1 Statement of the Problems
Domestic investment in Nigeria has been constrained by numerous factors.
These factors range from the following:
Low capital stock: investment can never be successful if the capital is low
The
poor level of capital stock has been as a result of poverty which
decreases domestic saving resulting from decline in real pre-capital
inadequate infrastructure entrepreneurial activities is discouraged more
by the absence of basic infrastructure like electrify, good roads and
communication (Green 1991).
Economic and social infrastructure are
poverty developed in Nigeria thus domestic and foreign investors are way
of investing in countries where basic requirement are inadequate
political instability and policy inconsistency, due to the transitional
nature of the Nigerian government investment have been derailed.
Interest
rate more inversely with investment that is as interest rate increase
is falling investment rises. But Nigeria in interest rate of about 17.69
year ended 2006 did not account for upswing in private investment because of inappropriate administration and poverty.
The
growth of domestic and external debt over the year has negatively
affected the level of investment in Nigeria. Nigeria debt burden between
1980-2011 has effect for the economy and the welfare of the people. for
example, Nigeria was owing the international community as act of 2007
was up to billion while (US) which could have been used for more
allocation of basic requirement that would aggravate investment (Idoko
1966).
Exchange rate fluctuation has also contributed to low
propensity to invest in Nigeria by the foreigners. This is because of
low manufacturing of export goods. Capital which would have ordinarily
increased domestic exchange rate (Jhigan 2005). Therefore, instead of
investing domestically the greater percentage of Nigeria’s proffer
investing abroad where their money would manage effectively.
Huge
cost of raw materials and inadequate developed nature of domestic raw
materials for investment. Therefore government should give incentives to
encourage the investors give holding and reduction in duties changed
during import of raw materials.
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ABSRACT - [ Total Page(s): 1 ]In recent times, there has been growing concern about the rising but volatile rate of investments in Nigeria. Thus concern stem from the fact that investment plays a dominant role in stimulating growth. The study buttress on the overview and empirical analyses into the determinant of investment in Nigeria in other to achieve the objective hypotheses which was stated with the purpose of achieving current and future stable and upswing of investment by readdressing problems of investment, as highli ... Continue reading---
