IMPACT OF FDI ON THE CONSTRUCTION SECTOR OF THE NIGERIAN ECONOMY

IMPACT OF FDI ON THE CONSTRUCTION SECTOR OF THE NIGERIAN ECONOMY (ECONOMICS PROJECT TOPICS AND MATERIALS)

CHAPTER ONE
INTRODUCTION
1.1  BACKGROUND TO THE STUDY
The construction sector occupies a focal position in the economy of any nation because it is an important contributor to the process of development (Aje, 2008). In the conduct of economic activities, the construction sector is always used by government as the stimulus for the buoyancy of the economy (Akindoyemi, 2011). The construction industry is therefore a critical factor or variable of progress in the drive for economic advancement of nations, especially developing countries such as Nigeria. Nigeria no doubt requires substantial amounts of foreign investment in the construction sector to speed up her economic growth most especially in the area of building and construction infrastructure/facilities investment and to promote development, which will in turn boost GDP. The significance of foreign capital for the provision of infrastructure development for both macroeconomic and microeconomic activities of the society, cannot therefore, be overemphasized. Todero (2001) described infrastructure as the pillar of growth in Africa and it is generally inadequate and of poor quality when compared to developed nations of the world. Foreign capital has long been accepted as an inevitable input in the development process, given the fact that no country is an “island” with self sufficiency on her in terms of needed resources, to stimulate economic growth and development (Orji, 2004). This is a continuation from experience of some countries in South East Asia notably, Singapore, South Korea, Taiwan and Hong Kong (Ayo, 2008). The Organization for Economic Co-operation and Development (OECD), (2002) succinctly described Foreign direct investment (FDI) as follows: an integral part of the international economic system and a major catalyst for development or the flow of capital and human resource from one country to another. Foreign direct investment (FDI) is thus part of the economic system that stimulates economic growth including infrastructural development. In view of the role of foreign capital inflows as investment mechanism for economic growth in most countries, it is a strong indicator of the economic strength of Nations. National policies and the international industrial architecture obviously play a significant role in attracting FDI to most countries and stimulating growth. For instance, Nigeria’s vision 20: 2020 sets strategies and targets in every sector of the economy that are expected to ensure that the country joins the group of twenty most developed economies in the next ten years. Kolapo (2010) asserted that it is unfortunate that the palpable bottleneck in the way of sustainable growth in Nigeria are only a clear manifestation of five decades of dishonest and egocentric governance. Some notorious past leaders had unwittingly given themselves away as incompetent by saying that Nigeria’s problems defiled all logic.

IMPACT OF FDI ON THE CONSTRUCTION SECTOR OF THE NIGERIAN ECONOMY (ECONOMICS PROJECT TOPICS AND MATERIALS)