The Analysis of Foreign Private Investment in Nigeria (1970-2010). ABSTRACT The aim of the study was to determine the major determinants of Foreign Private Investment (FPI) inflow in Nigeria comprising of Foreign Portfolio Investment and Foreign Direct Investment in the short and long run and also to ascertain the causality relationship between these two investments using secondary data sourced from the Central Bank of Nigeria statistical bulletins and the World Bank Development index (2008) from 1970-2010. The obtained results from the analysis were made possible using the Granger Causality Test, Johansen Co-integration test, and then the Error Correction Mechanism estimation test, having tested for unit root to avoid spuriousity.The study finds a long run relationship amongst the variables and reveals further that Foreign Private Investment into Nigeria have not been encouraging given the high inflation rate, rising external debt, lack of openness, and poor economic growth caused by frequent political instability factors, insecurity, poor infrastructures, and corruption.
…Realizing the inadequacy of the domestic capital to finance investment needs, Ethiopia has opened several economic sectors to foreign investors especially after 1992 to have sustainable economic growth (EIA, 2012). However “The impact of foreign direct investment on economic growth of host country, determined further by whether it crowd-in or crowd-out domestic investments” (Agosin,R and mayor, 2000). The book emphasizes on the interrelationship between foreign direct investment and domestic private investment. The author employs vector auto regressive model to know the relationship between foreign direct investment and domestic private investment. The study shows that foreign direct investment crowds-out domestic private investment. In addition, foreign direct investment does have not significant effect on economic growth of Ethiopia; But Domestic private investment complements growth trajectory…
Despite lofty rhetoric and aspirations, neither the goals of Foreign Aid nor those who advocate Foreign Direct Investment for alleviating poverty have been, or are likely to be achieved in Nigeria. This study examines why Foreign Direct Investment and Foreign Aid in Sub-Saharan Africa facilitate patronage which, in turn, results in Human Insecurity across the region. In the case of Nigeria, there is an inherent dilemma between aid and investment on one hand and patronage, access, and corruption on the other. U.S. Foreign Aid and Foreign Direct Investment in Nigeria facilitate and reinforce patronage and corruption, which in turn, results in a condition of Human Insecurity.
Nigeria has the potential to become Sub-Saharan Africa’s largest economy because of its rich human and natural resources. These vast natural resources qualify Nigeria to be a major recipient of foreign direct Investment. Foreign Direct Investment in turn is believed to be an engine of economic development in that it brings about the transfer of technology, managerial skills, international production, access to markets, etc. A number of studies have been conducted on the Impact of Foreign Direct Investment on Economic Growth, with most of those studies focusing on cross-country studies. Yet, results about the relationship between foreign direct investment and economic growth come with varying outcomes. This Bachelor’s thesis focused exclusively on Nigeria with a view to analysing the role foreign direct investment has played on economic growth in Nigeria since independence. This thesis concludes by making important recommendations that are particularly useful to investors who want to invest in Nigeria; academicians interested in studies of FDI-growth linkage; and to policymakers to adopt some measures to further strengthen and improve investment environment in Nigeria.
Using a macroeconomic approach, this work examined the role of foreign private investment (FPI) and capital formation in the economic growth of Nigeria.In order to achieve our objectives, we estimated the model of capital formation and economic growth for Nigeria. We found, that foreign private investment has a negative impact on capital formation in Nigeria. We also found that both foreign private investment and capital formation, in addition to other factors, significantly determine economic growth in Nigeria.Again we found that the long run impact of capital formation and foreign private investment on economic growth is larger than their short run impact. There is thus a long run equilibrium relationship among the variables as the error correction term is significant, but the speed of adjustment is small in both models. We estimated two stage least squares counterpart of the models in order to check for endogeneity bias.Our findings therefore have some policy implications: First, policies that enhance capital formation and FPI inflow do increase economic growth. Second, banking systems credit to domestic economy enhances capital formation and economic growth.
It is a widely held opinion that the attainment of a robust economic growth and development in Nigeria will require, among other things, an increase in investment which will have to come primarily from the private sector. Viewed against the background of growing evidence of a link between investment and economic growth, the question of what determines private investment behavior in Nigeria therefore becomes an important one. Several studies in developing countries emphasize the importance of macroeconomic policy in explaining variations in investment, and in particular, identify the macroeconomic determinants of private investment to include; interest rates, output growth, public investment, bank credit to the private sector, inflation, real exchange rate , and the level of trade. This study proceeds in the same vein and evaluates the macroeconomic determinants of private investment in Nigeria by means of an estimation technique based on the co-integration and Vector Error Correction Model (VECM).
Nigeria has the potential to become Sub-Saharan Africa’s largest economy because of its rich human and natural resources but in spite of this, Nigeria is considered to be one of the poorest countries in the world. About 70% of the population live below the poverty line and with an investment rate of barely 10% of GDP, Nigeria is below the minimum investment rate of about 30% of GDP required to reduce poverty. Foreign Direct Investment can provide the capital needed to bridge the savings gap, required to propel economic growth and development. This is an historical and empirical assessement of the story so far and the best ways Nigeria can position effectively to make the most of available capital, generate and sustain global interest in the non-oil sector.
This book is An Analysis of Impact of Official Development Assistance in Nigeria. This book is different from other books on the impact of foreign aid on the economy of developing countries, because it approaches the issue of the impact of official development assistance on Nigerian economic from sectoral lens. The sectoral analysis of impact of aid in Nigeria is important because foreign aid may have differentiated impacts at the sector levels. The book should be a ready companion to development economists and donors who are interested in aid effectiveness in Africa, especially, Nigeria. Students of economics at the advance levels and others who are interested in development in Nigeria will also find the book an interesting academic piece of materials.
Developing countries are in dire need of sustainable economic growth and theoretical literature suggests the resurgence of private investment as a panacea for rapid economic growth. This calls for the examination of the determinants of private investment in the literature. Recent works have, however, indicated that the lost option value of investment and effect of uncertainty can be large but empirical literature on this issue is scanty in developing countries. The book, thus, examines private investment decisions in Nigeria and provides improved understanding and more dynamic framework for private investment decisions in the wake of irreversibility and uncertainty. The book concludes that high levels of uncertainty indicators cause private investment to decline while irreversibility affects the timing of private investment spending in the short run and makes private investors less eager to invest thus impacting negative effect on investment spending. The book is relevant to academia in the context of policy discussion on the causes of Africa's dismal growth performance and offers important guidelines for designing more effective policies as regards private investment decisions.
Foreign investment protection is relatively new to the Nigerian legal regime, following a shift from military rule to democracy in the late nineties. There is yet to be a comprehensive study which explores National laws and Bilateral investment treaties (BIT’s) as they reflect the recent global trends in international Investment protection. The adequacy of the law to protect foreign investment is Paramount to the increase of Foreign Direct Investment (FDI) in any given country. This book provides an insight into the inconsistency in the Nigerian legal regime that undermines protection of FDI'S and proffers ways to bridge this gap. The analysis provided should be a guide for anyone planning to do business in Nigeria, legal scholars as well as the Nigerian Investment Protection Commission. It should also stimulate Lawmakers to address the issues facing the protection of FDI and close the lacuna in the law; bringing it to par with International standards and foster Investment.
This study shows the Impact of Foreign Direct Investment in the Economic Growth of Pakistan from 1971-2007. We can see the importance of Foreign Investment inflows by the help of research findings. Huge Economic growth can be seen in 2007, by the help of Foreign Direct Investment. Many policy recommendations are also written in this book, those are very beneficial for Pakistan to attract the foreign Investment.
This research study analyses the impact of a shortage of local skilled labor force on foreign investment in the private sector of the region and risk appetite toward this risk factor. The aim of this study is to examine the effect of the shortage or absence of local skilled labor force as a risk factor for foreign private sector’s investment in Kurdistan region and set a strategy to minimize the negative consequences of such shortage. This work also evaluates how foreign investors are affected by the shortage of the local skilled labor force concerning their investment in the region whilst it explores how companies assess and manage the risks they face in Kurdistan.
Nigeria has a large domestic market, natural resources, entrepreneurial talent and a geographical location capable of exploiting regional and continental markets. Despite these advantages, Nigeria cannot muster the desired level of gross national savings to achieve a reasonable level of sustainable growth. Foreign Direct Investment (FDI) is a major form of resource flow among countries as globalization narrows domestic and foreign policies towards a common international economic order. FDI requires a systematic focus in the area of employing it as a strategy for market penetration and enhancing economic growth of Nigeria. This book, therefore, provides strategic approaches for determining how Nigeria can encourage sustainable inflow of FDI and obtain a more substantial contribution to the country’s economic growth programs. The work is premised on Dunning’s Eclectic Theory and the Harrod-Domar Growth Model. The analysis should help bring to focus some factors that enhance FDI in market penetration and its impact on economic growth in Nigeria. It should be useful to students, scholars and professionals in marketing, economics, social sciences and practitioners in other fields.
Nigeria is suffering from capital flight which has been a problem to the economy. This is affecting domestic investment especially at this period of financial globalisation. This study examined the relationship between capital flight in Nigeria and investment at this period of financial globalisation with data from 1970 to 2007. The OLS technique is used in determining the significant variables in investment and globalisation while ECM is adopted to determine relationship between investment and capital flight with the variables of exchange rates, investment, Kaopen, financial savings, external reserves and interest rate differential among others. The study finds that the rate of exchange is significant in investment and financial globalisation. The estimates of capital flight do not significantly impact investment. This study also shows role of errors and omissions in distorting the estimates of capital flight in Nigeria. The study recommends further floating of the currency to crowd in investment while investments should be increased by both public and private sectors to induce other domestic investments, which will facilitate further inflow of capital.