ABSTRACT
The primary of objectives of this study is to examine the impact of foreign private investment on Nigerian economy.
Furthermore, the favourables used to test the impact of foreign private investment on Nigerian economy shows that the role play by the foreign private investment is very minimal and it is hoped that the policy recommended will enable the authorities and the parties concerned re-assess the issues in the overall interest on the whole populate of Nigeria for our concern is with economic arrangements for continued existence and not that of unstable economic.
Foreign private investment, which includes private direct inventory and foreign private portfolio investment is an important component of aggregate investment especially in developing countries. In a country like Nigeria where domestic saving is low, increase in foreign increasing in macro significant sequence of private foreign investment resulting from increase in domestic saving and acceleration of foreign capital flows
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Foreign private investment, which includes private direct inventory and foreign private portfolio investment, is an important component of aggregate investment especially in developing countries. In a country like Nigeria where domestic saving is low, increase in foreign increasing in macro significant sequence of private foreign investment resulting from increase in domestic saving and acceleration of foreign capital inflows.
Like the Nigeria economy, which up to the late 1970's enjoyed considerable boom result of its oil wealth, as form 1981, thrown into an unprecedented economic recession. Private investment is an important channel for aggregate investment. That is to say progress economic adjustment is expected to trigger.
The cause of this had ironically been the oil itself. By 1981, the global prices of oil fall an all-time low have about $12.00 a barrel, as against us $40.00 per barrel in foreign previous year. This leads to significant fall in the foreign exchange earning acid serious distribution of the economic development process. It because difficult for government to implement already approved national projects the foreign exchange problem could not be every by the exports from the Agricultural sector has suffered major neglect in the years of the oil boom. Consequently, productivity declined in the industries, unemployment increased as factories produced below capacities or were shut down. Also the rate of inflation increased because of shortages industrial output and the restriction in the effort to conserve foreign exchange. Attempt to resolve the economy was done by virus regimes - Shagari, Babangida, Buhari (SAP), in the 80' s by 1987, it was clear to the government that the oil boom years were gone for good. The development as may be noted was further aggravated by the failure to raise funds for investment domestically and the decline in the flow of foreign capital into the country.
Hence, the emphasis of the Babangida administration on the need for new foreign investments into the economy. The government had in this context strongly upheld the several benefits assumed to accrue to the host country from foreign investment help to reduce the shortage of domestic saving and increase the supply of foreign exchange thereby permitting rapid expansion in real income. It is assumed that direct foreign investment could result in higher direct taxes to be paid by foreign afflicts.
However, G.L. REUBER et al have expressed some reservation on this since the amount of benefits here would be conditioned by the substantial subsidies, which the host countries have to provide. It is envisaged that direct foreign investment may lead to lower product prices especially when investment are cost producing foreign investment is assumed to be associated with certain external economics. Apart from bringing physical capital to the host country, they also in their own way bring technological knowledge, market information, managerial and supervision, personal organizational experience and innovation in products all that are in short supply in many developing countries. In this connection foreign investment may be vital to the portion of private technical assistance and the demonstrative efforts that could be beneficial elsewhere in the economy, new techniques accompany the inflow of private capital by promoting the diffusion of technological advancement in the economy.
It is further envisaged that foreign investment In Nigeria encouraged domestic investment through the reduction of cost in other industries; profits could rise and result in the expansion other industries. Moreover, initial foreign investment in Nigeria has contributed to the creation of external investment incentives by raising the demand for the output of other industries.
1.2 STATEMENT OF THE PROBLEM
The private foreign investment is described to help reduce the shortage of domestic saving and increase the supply of foreign exchange thereby permitting rapid expansion in real income. It is assumed that direct foreign investment could result in higher direct states to be paid by substantial subside which the host countries have to provide.
Similarly, it is envisaged that direct foreign investment may lead to large employment of labour force. Beyond this, foreign investment was seen to be associated with external economics.
The critical questions are on the magnitude of the inflow given the political and social economic arrangements of the country.
The external relation of the country and the economic, situation in the developed countries and their incentives to investor's significant inflows.
The inflow of the private foreign investment had also tended to be dictated by changing political and economic situation of a country.
Their situation may either improve or moved the potential growth of foreign private investment and the benefits of foreign private investment to Nigeria economy.
1.3 AIM AND OBJECTIVES OF THE STUDY
Foreign investments have contributed substantial solution to the fundamental problems In Nigeria's economic recession and growth. Also the stimulation of private foreign.
1. To examine the contribution of private foreign investment to the Gross Domestic Product of the Nigeria economy.
ii. To show the growth and development rate by private foreign investments in the economy.
iii. To highlight to the government that either sector of the economy could be developed very well with the participation of foreign investment into the country without depending solely on the oil sector of the economy.
iv. To determine the cover all performance of private foreign investments in Nigeria from1980 - 2002.
v. To exploit the various areas of private foreign investment say the usual economic sectors, mining and quarrying, manufacturing and processing, agriculture, forestry, fishing, transportation and communication. Others are construction building, trading and business, services and miscellaneous.
vi. To examine the prospects for increasing participation of foreign private investment into Nigeria over the years.
1.4 SIGNIFICANCE THE STUDY
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