ABSTRACT
This study succinctly examined FDI development and its impact on the Nigeria Economy from 1995 - 2010. This trend show that FDI although had some drawbacks due to economic instability and other economic factors that militated against its rise until recent democracy and economic reforms, improved and characterized its changes significantly. The ordinary least square (OLS) method of multiple regression was used and econometric applications all used for the interpretations and analysis.
The findings conclude that FDI has significantly increase GDP growth rate and enhance foreign reserve and economic performance.
CHAPTER ONE
1.1 INTRODUCTION
The need to accelerate the pace of economic growth and development by many Countries, especially the less developed coun ies (LDC) i.e. Nigeria, have propelled them to make deliberate efforts to attract foreign direct investment (FDI).
Ezirim, Emenyeonu, Muoghalu (2002) suggested that these efforts are geared towards improving the general investment c1imat through the adoption and implementation of foreign investment. Ho ever, friendly policies and programme such as Tax incentives, export promotion significantly, the drive for foreign investment drives the various benefits it confers on the host Country. The benefits include addition of new capital, technology, improved management and market access,. FDI has also been acknowledged as a potent source of improving efficiency of the productive sector through competition, stimulation of economic progress, creation of jobs and fostering growth in the host economies.
According to Narula and Portelli (2004) over the past two decades, the growth of Multinational enterprises (MNE's) activities in developing countries has increasingly been regarded as one of the defining characteristics of the world economy and an engine of economic growth of host economies.
Multinational Enterprises (MNEs) related externalities have been, although increased interest from developing countries because of the perceived benefits in terms of the injection of capital, technology and knowledge. However, key multinational enterprises (MNE's) externalities include the knowledge spillovers and link es from the ... MNEs to domestic firms in host countries.
The nature of these MNE- externalities may either arise from pure market transactions (e.g. Through MNE vertical linkages) or else through knowledge spillovers which take non-mar monetary firm, non-monetary firm.
The nature of these MNE - externalities may either arise from pure· market transactions (e.g. through MNE vertical linkages) or else through knowledge spillovers which take on-market or on-monetary firm.
This general, warning of attitudes towards Foreign Direct Investment (FDI) has taken place in the content of the promotion of outward looking economic strategies as envisaged by the International Monetary Fund (IMF) and the World Bank. Hence, developing countries have been undertaken policy shifts from inward-looking. import substitution industrialization models towards ore outward, export-oriented economics policies, Narula, (2001); Ozawa (2002).
This topic has assumed greater importance in the context of the anti-globalization movement, which opposes further liberalization of international trade and investment. FDI and its developmental effects is therefore a topic which attracts considerable attention and interest from academia and policy makers (Narula and Portelli, 2004).
The abundance of natural resources in Nigeria is not in doubt as the country can boast of large reservoir of many mineral resources such as crude oil, cold, zinc, limestone, coal etc as well as skilled manpower. But due to bad management of the economic resources; lack of adequate capital resources, declining higher inflationary rates, and high rate in poverty level (which affects savings and capital formation) makes direct foreign investment or capital inevitable for the economy. This study proposal, therefore represent an attempt to examine the impact of Foreign Direct Investment on the Nigeria Economy.
1.2 STATEMENT OF RESEARCH PROBLEM
The statement of the research problems which necessitate carrying out this research work are:
What impact does FDI has on the economic growth in Nigeria?
Direct foreign investment has not contributed to the increase in Gross Domestic Product (GDP)
The fiscal policy of the government does not affect the inflow of FDI to Nigeria.
1.3 AIM AND OBJECTIVES OF THE STUDY
The overall objectives and aims of the study are to understand the effect of FDI on Nigeria Economy.
The Objectives of this study are:
.