EFFECT OF NIGERIAN POLICIES AND LAWS ON CHINESE FOREIGN DIRECT INVESTMENT

2011

Nigerian journal of African studies, 2024

This study examines the determinants of foreign direct investment (FDI) in Nigeria, exploring the factors that contribute to an enabling environment for FDI inflows. Grounded in the OLI Paradigm, Market Imperfections Theory, and Institutional Theory, this research provides a theoretical framework to understand the complexities of FDI determinants. Through a comprehensive qualitative analysis of secondary data from academic literature, government reports, and international organization publications, the study identifies key themes influencing Nigeria's attractiveness as an FDI destination. Political stability, market size and economic growth, infrastructure development, institutional quality, and human capital development emerge as crucial determinants of FDI in Nigeria. The findings provide valuable insights for policymakers seeking to promote sustainable economic growth through foreign investment and offer recommendations for enhancing the country's FDI environment.

As the world economy continues to become more globalized, foreign direct investment (FDI) continues to gain prominence as a form of international economic transactions and as an instrument of international economic integration. In recent years, developing countries like Nigeria with large home markets and some entrepreneurial skills have produced large numbers of rapidly growing and profitable multinational enterprises (MNEs). These MNEs are like their counterparts in other countrirs, looking for markets where they have comparative advantage to invest in. It is therefore important to create the conditions that would attract FDI from such MNEs. In this context, this study outlined the reasons why some Nigerian enterprises decide on outward FDI, their levels of success, and what other countries particularly in sub--Saharan Africa must do to attract FDI from Nigeria. It also examines the flow of FDI to Africa since the 1970s and examined the determinants of FDI with a view to understanding whether the existing policy and operational framework are sufficient for attracting investments. It further discusses the factors that influence FDI, the role of FDI, FDI trends in Africa, sectorial allocation of FDI in Africa, why Africa has lagged behind in receiving FDI, and the various modes of entry. The study ends with clear recommendations for MNEs and policy makers

Global Journal of Human-Social Science Research, 2010

The role of foreign direct investment in the development of Nigerian economy cannot be over emphasized. Foreign direct investment provides capital for investment, it enhances job creation and managerial skills, and possibly technology transfer. This paper investigates the determinants of foreign direct investment in Nigeria. The error correction technique was employed to analyze the relationship between foreign direct investment and its determinants. The results reveal that the market size of the host country, deregulation, political instability, and exchange rate depreciation are the main determinants of foreign direct investment in Nigeria. The authors recommend the following policies among others: expansion of the country's GDP via production incentives; further deregulation of the economy through privatization and reduction of government interference in economic activities; strengthening of the political institutions to sustain the ongoing democratic process; gradual depreciation of the exchange rate; and increased investment in the development of the nation's infrastructure.

2014

The paper examines the determinants of Foreign Direct Investment (FDI) in Nigeria during 1970 2006. cointegration techniques reveal that the major determinants of FDI are market size, real exchange rate and political factor thereby validating theoretical expectations. Furthermore, simulations using impulse response and variance decomposition analysis suggest that uncontrolled trade liberalization must be avoided.

MPRA Paper, 2011

The paper examines the determinants of Foreign Direct Investment (FDI) in Nigeria during 1970-2006. cointegration techniques reveal that the major determinants of FDI are market size, real exchange rate and political factor thereby validating theoretical expectations. Furthermore, simulations using impulse response and variance decomposition analysis suggest that uncontrolled trade liberalization must be avoided.

2010

The Problem Historically, Nigeria’s traditional development partners are mainly from Europe and the Americas (U.S. A. and Canada). Indeed, these groups have dominated the flow of trade, investment (in terms of foreign direct investment – FDI) and grants and financial as well as technical aid to the country over the years. Although Nigeria and these countries have come a long way in their relationship, it is contestable if such has in any significant way assisted the country in its quest for development. The relationship appears to be exploitative at least from the trend in the structure and pattern of FDI inflow to the country. Although China-Nigeria relationship dates back to 1971, recent dimension and nature of economic interactions between the two countries demand a careful and detailed analysis of this relationship with a view to establishing its potential impact on the economies. Interestingly, the growing relationship between China and Nigeria is induced by the fact that the t...

CERN European Organization for Nuclear Research - Zenodo, 2022

Extant literature is replete with the benefit of attracting Foreign Direct Investment (FDI) into an economy, it not only provides developing countries with the much needed capital for investment; it also enhances job creation, managerial skills as well as transfer of technology. However, attracting and sustaining FDI inflow in Nigeria have remained a teething problem. This study therefore examined the determinants of foreign direct investment in Nigeria. Specifically the study provides empirical evidence on the influence trade openness, market size, infrastructure, human capital, labour force, natural resources, exchange rate and inflation rate on Foreign Direct Investment (FDI) in Nigeria using an econometric regression technique of the Ordinary least square (OLS). The findings of the study also show that trade openness, market size, infrastructure, exchange rate and inflation rate are statistically significant in explaining the foreign direct investment in Nigeria while human capital, labour force and natural resources are statistically insignificant in explaining the growth of foreign direct investment in Nigeria. The study recommends that: The government should make polices that will create a business friendly environment to attract FDI inflows in economy. The government should provide the needed leadership and also ensure political stability in the country. This will attract investors to take the advantage of the market size of the country to FDI into the economy. The government should make policies that will favour trade openness. Trade openness is found to be factor that attracts investors invest in the country. This is lesser barriers to trade encourages investment and the government should provide the needed infrastructure. Necessary infrastructures that will reduce the cost of doing business should be the watch word of every government.

In this paper, we examine country specific or locational determinants of foreign direct investments (FDI) in Nigeria. Using time series data from 1975-2008 and applying Generalized Method of Moments (GMM) with autoregressive error technique, we find that the index of government expenditure, index of energy consumption, and the indicator of political stability are positive and significant predictors of FDI in Nigeria at 5 percent significance level. Other locational variables suggested in the literature such as inflation rate, exchange rate, market size, infrastructure and human capital are however not significant determinants of FDI in the country. We thus recommend that the varying influences of these variables should be noted for appropriate policy actions in order to fully attract FDI into the country. 1. Introduction The Nigerian government at the advent of democratic government in May 1999 enthusiastically announced its desire to attract and embrace foreign direct investments (FDI) into the country. This renewed interest emanated from the perceived opportunities derivable from utilizing this form of foreign capital injection into the economy (Adeseyoju 2001). In the first instance, FDI is believed to be more stable and easier to service than commercial bank credit or portfolio investments. FDI is usually a long-term economic activity in which repatriation of profits only occur when the project generates enough returns. Secondly, Nigeria is expected to access modern technologies through FDI to upgrade the country's productive capacities through adaptation of such technologies to her local conditions. Thirdly, on account of its integrated network of activities across the globe, FDI is potent enough to integrate Nigeria into the global market (both for existing economic activities as well as new ones that are likely to emerge). Such penetration into international market engenders substantial capacity building and economies of scale, among others (Hood & Young 1979; Aremu, 2000). Moreover, FDI provides employment opportunities to underutilized factors of production, guarantees formal and informal trainings, and returns to domestic resource owners in the Nigerian economy. As multinational corporations (MNCs) through their affiliates (branches, subsidiaries and associates) integrate Nigerian economy into their system, the country's domestic productive capacities are expected to be improved.

The growing recognition of Foreign Direct Investment (FDI) as an instrument of economic development has reached a high pitch. This is because many countries and especially developing countries see FDI as an alternative financial measure to fill revenue-generation gap of government in achieving economic development. This paper provides a content review analysis of the foreign direct investment development in Africa with particular reference to Nigeria. The findings of this review suggested that the degree to which foreign direct investment helps or hurts a developing country will be heavily influenced by the policy choice of the host country. Therefore, it is recommended that for Nigeria to attract the desired level of FDI, it must have strong based institutions that promote justice, adherence to regulatory framework, and safe haven for congenial business environment. There must be political stability to encourage inflow of capital flight in diaspora and concerted effort to develop infrastructure.

SSRN Electronic Journal, 2008

The paper examines the determinants of Foreign Direct Investment (FDI) in Nigeria during 1970 2006. cointegration techniques reveal that the major determinants of FDI are market size, real exchange rate and political factor thereby validating theoretical expectations. Furthermore, simulations using impulse response and variance decomposition analysis suggest that uncontrolled trade liberalization must be avoided.

CJMR - Colombo Journal of Multidiciplinary Research, 2020

Foreign Direct Investment is the dominant and the most reliable source of deficit financing to nations mostly developing and third world characterized with low investible fund since early 80s. This is against the backdrop that investible funds generated from high saving are a necessary condition for economic growth. However, the all-encompassing determinant of FDI is the consistency in the economic policy especially in the third world and developing economies like Nigeria. It is against this that this study seeks to measure the effect of policy inconsistency on the flow of FDI in Nigeria from 1970 to 2016 using Annual and Cumulative Growth Rate approach. The study revealed that policy inconsistency within the period reviewed has a serious impact on the flow of FDI. In line with this, it was part of the recommendations that Nigerian governments at all levels should reduce the rate of policy change and volatility through the design and pursuance of long term economic and FDI related policies with a strong legislation that they must remain uninterrupted even with a change of political leadership.

Countries enter bilateral and multilateral relationships with one another based on the expectation of mutual benefit. This paper focusses on the bilateral investment relation between China and Nigeria. Despite the a long history of interactions and agreements between Nigeria and various more developed partners, development in Nigeria has not been as successful as could have been hoped. This study adopts a historic-structural, analytical and systematic approach in the Sino-Nigeria Investments. Findings reveal that Nigeria has been one of the leading partners of foreign direct investments from Chinese companies. In addition the research has also revealed that the benefits derived from the relationship sketch a lopsided picture in favour of China, at the peril of the Nigerian counterparts. To this end, the paper postulates that this Sino-Nigeria bilateral engagement should undergo some changes to achieve equal and mutual benefit to both parties.

Open Journal of Business and Management

Perceptions play a critical role in international affairs. Politicians must be able to consider and forecast both challenges and opportunities. Public opinion has the power to change the course of politics. As the world becomes more interconnected, it's critical to comprehend how China is perceived and how this affects China's global effect. Although it only makes up a small part of overall Chinese OFDI, this investment class has recently drawn interest because of its sectoral and geographic diversification. Nigeria has been one of China's top 40 trading partners for more than five decades. For some time, it has been the leading African investment destination for Chinese investment in the continent. The pursuit of multilateral agreements has a significant effect on how countries engage in the political and economic realm. This study used both quantitative and qualitative methods. The study adopted simple random sampling techniques to allow for equal and unbiased respondents' participation in the primary data collection. The response scale was base on a 1-5 points Likert scale. Secondary data was sourced from archival materials, published books or scholarly works, the internet, international organization official documents, journals, press releases, newspapers. The overall research accepts the study's alternative hypothesis, which shows that perhaps the ten outlined perceptions of Nigerians towards Chinese FDIs and its acceptability are heavily influenced by the success of FDI by Chinese investors and businesses in Nigeria's market climate. The importance and positive outcomes of such FDI are heavily reliant on Nigerian perceptions of Chinese FDI and their acceptability and the investment target region.

from 1990s. The paper is structured into four chapters. The first chapter deals with the development of trade and investment flows to and from Africa from 1970s, identifying the FDI receiving front-runners and specific focus of investment into oil industries. The second, third and forth chapters address trade and investment relations of three major economic actors in sequence the United States, China and the European Union with Africa. These three chapters concentrate on development of trade and FDI to Africa from 1990s from the three regions stated above, trade and FDI directed into extractive (predominantly oil) industries as they in most cases create substantial part of the whole trade and investment to Africa and future prognosis of the development of these flows.