THE EFFECT OF FOREIGN DIRECT INVESTMENT ON THE NIGERIAN ECONOMY 2005-2015

THE EFFECT OF FOREIGN DIRECT INVESTMENT (CASE STUDY: NIGERIA) (MANAGEMENT PROJECT TOPICS AND MATERIALS)

ABSTRACT

Foreign direct investment involves a business or production investment by a company to one or more countries. FDI enables host countries to achieve economic growth through investments that outweighs that of the host country’s local investment. It increases the capital formation of host countries, which in the long run lead to growth in both the private and public sectors. Host countries usually benefits from foreign direct investment because of new technologies, capital, employee training, and other incentives which investors bring with them.

This paper tends to look at the relationship that exists between the host country and foreign direct investment. The biggest challenge investors’ encounter in developing countries like Nigeria is the lack of infrastructural facilities and this has reduced the amount of FDIs Nigeria. Various articles from different writers are used in this research work on how foreign direct investment affects the host country.

At the end, it was discovered the foreign direct investment helps in developing the economy of developing countries like Nigeria.

1       INTRODUCTION

In the history of the world, there had been so many revolutions, which had changed the pattern of relationship among nations within the global environment. First World War brought about peaceful and friendly relations among the countries internationally because there was a need for them to come together and resolve the various issues that could lead to another war among them and this led to the formation of League of Nations, the War was regarded to be War to end all Wars. It was quite unfortunate that League of Nations couldn‘t prevent the coming of the Second World War in 1939 to 1945 and after this war, there was cold war within the global environment, which ended the friendly relations among the countries in the world and the issue of security came to be prominent and important to them. There was no mean for economic interdependence whereby a multinational company could expand its branch beyond its sovereign state.

From Second World War to 1970s Foreign Direct Investment could not convince so many countries especially developing countries about its advantages and the fear of domination as well as the belief of national security could not allow foreign investors to penetrate beyond their political boundaries in fact, there was nothing like economic relations among the nations then. But from 1970s upward, the need for economic relations and interdependence came to be significant to countries in the world and most in particular, developing nations. And the various benefits of Foreign Direct Investment as a roadway to success for economy development of the developing economies came to be very important to developing countries. FDI had done so much to many nations considering their efforts in Korea after Korean War, Japan after the destruction of Hiroshima and Nagasaki by United State during the World war II, China and India the two most populous countries in the world with poor economy to sustain their people. These countries had economy development by incorporating their local investment with the use of foreign skills, technologies, experts and management through FDI.

THE EFFECT OF FOREIGN DIRECT INVESTMENT (CASE STUDY: NIGERIA) (MANAGEMENT PROJECT TOPICS AND MATERIALS)