Determinants Of Investment In Nigeria

abstract

The Nigeria GDP (Gross Domestic Product) or GNI (GROSS NATIONAL PRODUCT) versus Nigeria’s population growth rate of 3% would be the study’s limitation.

Economic growth, on the other hand, is defined as GDP OR GNP divided by the total population of the country. This is a measure of the output of the economy. According to this equation, if the population grows quickly, economic growth will slow slightly and people’s income will fall. According to the findings, controlling birth, death, and migration rates, as well as some other demographic and economic variables, can improve GDP or GDP per capital.

TABLE OF MATERIALS

Title Page I

Approval Page ii

Dedication iii

acknowledgement iv

Abstract v

PART ONE: INTRODUCTION

1.1

Background of the research

1

1.2

Description of the issue

6

1.3

Question for Research

8

1.4

The Purpose of the Research

8

1.5

Hypothesis Proposal

8

1.6

The Importance of the Research

8

1.7 The Study’s Scope and Limitations

REVIEW OF LITERATURE IN CHAPTER TWO

2.1

A Review of the Literature

10

2.2

Literature Based on Experimentation

24

2.3

Previous Research’s Limitations

32

CHAPTERS THREE AND FOUR: RESEARCH METHODOLOGY 34

9

3.2

Model Information

34

3.3

Several Regressions

35

3.4

Evaluation Method

36

3.5

Packages of data and software

37

CHAPTER FOUR: PRESENTATION AND ANALYSIS

OF RESULT

4.1

Presentation of Regression result

38

4.2

Analysis of the Regression result

39

4.3

Evaluation based on statistical Criteria

41

CHAPTER FIVE: SUMMER, CLOSURE, AND

RECOMMENDATION

5.1

Results Synthesis

46

5.2

Recommendation

46

5.3

Conclusion

47

BIBLIOGRAPHY

49

JOURNALS

50

10

CHAPTER ONE

INTRODUCTION

1.1            Background of the Study

The Nigerian economy has grown at a slow and steady pace.

5% over several decades. Various explanations have been advanced for this development, but the most obvious has been a poor investment climate in the economy, which has been attributed to a lack of investable funds.

A balanced investment in physical and financial assets, human and social capital, as well as natural and environmental capitals, is required to stimulate sustained economic growth.

Nigeria has been classified as a low saving and even lower investment economy (Ajakaiye 2002). Fostering sustained economic growth is one of the primary obj ectives of the Nigerian government under the 1999 democratic dispensation. Over the years, the government has been in control of the growth of the government economy. However, life lessons have been learned.

demonstrated that the government is unable to effectively regulate the economy. A typical example is the shift recommended by the National Economic Empowerment and Development Strategy (NEEDS), which recommended the need to

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Restructure and expand the financial system. According to some economists, such as Mc Kinnon and Shaw (1973), rising investment alone is insufficient to generate growth, and the role of financial institutions is critical. The new express of that the role of capacity fund is very critical to the success of any endeavor is particularly important (World Bank 1998). In this regard, it is therefore critical to invest the determinants of economic investment over the last three decades.

In rural Nigeria, the banking sub-sector has remained foreign. However, recently the

The establishment of community banks (now micro finance banks) has been, to some extent, successful.

Expand their presence in rural areas. With government assistance, these banks make loans and mobilize savings from rural areas for further investment in Nigeria.

Furthermore, the government has attempted to provide necessary infrastructure in rural areas in order to reduce the rate of rural-urban migration in order to compel the rural population to take agriculture to greater heights as it had in the previous 38 years; however, diversification of the various sectors of the economy has been the most successful.

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The government’s primary goal. This is done to increase employment, which raises income and allows for more savings for investment.

However, the process has been insufficient thus far due to political instability and police inconsistency, which range from

from corruption of political administrators and negative effects of transitional government.

Diversification of various key sectors of the economy, such as agriculture and industry, increases employment, income, consumption, savings demand, and overall aggregate investment level, broadening and deepening the society’s standard of living. However, economists have expressed concern about the dismissal of growth records in most African countries in comparison to other regions of the world. 1998 (World Bank).

This is because the rate of growth in most African countries, including Nigeria, is frequently not proportional to the level of investment.

Nigeria, for example, experienced tremendous growth as a result of the oil boom in the early and late 1970s (World Bank).

This increased investment, particularly in the public sector; however, with the collapse

prices on the oil market in the early and mid-1980s

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Investment dries up, causing economic growth to slow. During the investment boom, for example, gross investment as a percentage of GDP was 16.8% and 31.4% in 1974 and 1976, respectively, before falling to 9.5 and 8.7 percent in 1984 and 1985 due to the depression (world bank).

Although the rise in oil prices between 1990 and 1991 was supposed to spur investment, this was not the case in Nigeria. For example, the Nigerian military government was inexperienced in formulating economic policies and thus delegated that task to bureaucracy (Idoko 1996). The unit was that investment decisions were undertaken with great decline, and the government adopted IMF World in 1986.

Bank structural adjustment programmer (SAP) aimed at ensuring a stable macroeconomic and investment environment.

To that end, previously fixed and negative in real terms interest rates were replaced by a market-driven interest rate regime. The policy shift deemphasized direct investment stimulation through low interest rates in favor of encouraging savings mobilization through interest rate decontrol (World Bank 1996). As a result, the goal of increased investment and

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Output growth was not realized because the country’s investment failed to return to levels comparable to those seen in the 1970s.

Although successive governments have implemented policies and strategies to increase savings and investments, this policy has been erratic as a result of the recent change in government.

As a result of political insecurity, the government was formed.

Furthermore, the experience of East Asian countries suggested that an investment rate of 20 to 25 percent could jeopardize a growth rate of 7 to 8 percent. Strategic evidence reveals that GDP in Nigeria shows a picture of growth after the civil war, following the oil boom of the 1970s, with a growth rate of 21.3% in 1971. (Bage 2003).

As a result, in order for Nigeria to experience increased growth and development, private investment must increase, as has been the case in Asian countries.

Finally, an examination of domestic investment necessitates a concurrent link to GDP as an aggregate factor, interest rate, and other unique variables. reacts to changes in investment such as debt ratio, business environment, real exchange rate, government expenditure, and infrastructure provision, among other things.

1.1            Statement of the Problems

Domestic  investment  in  Nigeria  has  been  limited by

various factors.

These factors begins from the following:

Low capital stock: investment wont be successful if the capitalis low

The poor level of capital stock is due to the result of poverty which lowers domestic saving resulting from a decrease in real pre-capital inadequate infrastrasture

 

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