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The Impact Of Foreign Direct Investment On Nigeria Economic Growth (1980 – 2010)
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1.2 STATEMENT OF PROBLEM:
One of the major economic problem in less
developed countries (LCD) is low capital formation to finance the
necessary investment for economic growth.
Capital was one regarded by
most economists as the principal obstacle to economic development and
this is lot attentions were 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’ all a test to
the crucial role of capital in the growth process. The theory of ‘big
push’ simply state 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), Akinlo(2004) examined the importance of
FDI on growth for several period and the channel through which it may be
benefiting 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 sure best option of 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.
These problems therefore raise the following research question.
1. What is the impact of foreign direct investment to the growth of Nigeria economy?
1.3 OBJECTIVE OF THE STUDY
The objectives of the study are as follow
1. To find out whether or not FDI has a significant impact on the growth of the Nigeria economy.
2. To determine the nature and magnitude of the impact of FDI on economic growth in Nigeria.
1.4 STATEMENT OF THE HYPOTHESIS
H01: FDI has no significant impact on the growth of the Nigeria economy
H02: The nature and magnitude of FDI on economics growth in Nigeria cannot be determined.
1.5 SCOPE/ THE LIMITATION OF THE STUDY
The
focus of the study is to verify if there has been any contribution made
toward the economic growth and development of the Nigeria economics via
gross domestic product (GDP) through foreign direct investment for the
period.(1990-2010)
This study will however be limited to investigate the impact of foreign direct investment on the growth of the Nigeria economy.
1.6 SIGNIFICANCE OF THE STUDY
Finding from the study will be of immense benefits in a number of ways and to different groups of persons.
1.
For policy making, the expected result outcome shall serve as a riseful
guide for future policies as it relates to stimulating growth within
the economy.
2. For further studies, it will serve as a reservoir of knowledge for such academic exercises.
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ABSRACT - [ Total Page(s): 1 ]The study examined the impact of foreign direct investment (FDI) in Nigeria over the period 1980 to 2010. The study employed multiple regressions in analysis, using the ordinary least square (OLS) regression technique. The result at this revealed that FDI impacted positively on the growth of the Nigeria economy over the period under study. Based on this, the study recommended the provision of adequate infrastructure and policy framework that will be conducive for doing business in Nigeria, so as ... Continue reading---
