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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.
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.
Doctoral Thesis / Dissertation from the year 2016 in the subject Business economics - Investment and Finance, , course: Public Administration, language: English, abstract: The study examined foreign direct investment (FDI): a panacea to national economic development. The objectives set for the study are; to determine the causes of the Nigerian economic downturn, to ascertain the effects of foreign direct investment, to suggest measures that would be taken to accelerate the economic development of Nigeria. Primary and secondary data were used; the population of the study was 1200 from which the sample sizes of 400 were determined using Taro Yamani’s formula. The research instruments used were questionnaire and oral interview. The reliability of the research instruments was tested using Pearson Product moment correlation coefficient; the result gave a reliability index of 0.98 indicating a high degree of consistency. Chi-square and ANOVA approach were the statistical tools used. The findings from the study reveals that, decline in oil prices and revenue, increase government expenditure and decline in market indices are the challenges posed by economic downturn in Nigeria; consumption-based economy, poor savings, high credit culture and huge financial outflow are the causes of the economic crises in Nigeria; reduction in direct foreign investment and overseas development assistance are the effects of economic crisis to Nigeria and finally, diversification of the economy, robust regulatory policies and professional supervision to aid foreign direct investment in Nigeria. Based on the findings, the researcher made the following recommendation: Nigeria should adopt tough policy measures as effective strategies towards a comprehensive strengthening of the economy, government should ensure that policy recommendations are implemented in order to reposition the Nigerian economy against the impact of future economic downturn, government should create enabling environment to attract foreign investors in order to boost economic activities in the country. Finally, government needs to sincerely focus on developing/strengthening the economy and provide alternative sources of revenue on a sustained basis.
Nigeria has put in place an elaborate foreign direct investment policy in order to attract foreign investors. As the largest economy in Africa, Nigeria has become a final destination for foreign investors. Currently, Nigeria is the single largest recipient of FDI in Africa. Nigeria seeks to diversify its revenue base with the active participation of MNCs and so reduce overdependence on oil. The recent crash in the international oil price has caused deep abrasion in the Nigerian economy thereby casting aspersion on the effectiveness of FDI to stimulate growth. This study focused on identifying key factors which influenced the contribution of FDI to economic growth in Nigeria. The study revealed that two potent factors namely public sector investment and marginal efficiency of capital influenced the contribution of FDI to growth in Nigeria while public sector investment was found to boost foreign capital, declining marginal efficiency of capital eroded the private capital of domestic firms which had low absorptive capacity to harness the sophisticated technology of MNCs. It was recommended, inter alia, that only a dynamic FDI policy that takes into cognizance the importance of public sector investment and marginal efficiency of capital can harness FDI to contribute maximally to growth.