Foreign Direct Investment And Manufacturing Industry In Nigeria, Performance, Problems And Prospects

Foreign Direct Investment And Manufacturing Industry In Nigeria, Performance, Problems And Prospects

Abstract

This study shows the performance of foreign direct investment on the manufacturing sector of the Nigeria frugality. The study adopts a time series approach to the development of three different models videlicet; Manufacturing Value Added Model, Foreign direct investment, Interest rate and Gross fixed capital conformation, from the time 1981 to 2015. The needed data were collected from the central bank of Nigeria( CBN) 2015 statistical bulletin. The econometric model of multiple retrogression analysis was used to test the relationship between the dependent and independent variable, the short and the long run impacts of the foreign direct investment flux on Nigeria’s manufacturing sector was anatomized using OLS estimation fashion. All variables will be tested to confirm the absence or presence of unit roots problems using ADF( Augmented Dickey- Fuller) test for the period in consideration. To test the impact of foreign direct investment( FDI), on the Manufacturingsub-sector’s performance, the Manufacturing Value Added( MVA) will be used to deputy the performance in the manufacturing assiduity

Background of the Study

One of the major objects of every frugality is to achieve a high profitable growth that will lead to rapid-fire profitable development through poverty reduction, creation of employment openings and entire creation of the weal of the citizen.

nearly, nearly all development propositions believe that this profitable growth can be achieved through the accumulation of physical and mortal capital among other effects. Hence, the accumulation of capital can come in the form of foreign direct investment( FDI) and domestic investment which are the central issues on which this exploration work revolves.

The Nigerian frugality has been on the loftiest philanthropist of the capital income from the nest of the world( CBN statistical Bulletin, 2010). The reasons behind these are really the large request size of the frugality, the position of its trade openness among other reasons. But recent events in the country show that similar benefit might not be sustained given the present socio- political rivals form the side of someanti-social group popularly known as the “ Boko Haram ” in the country which largely mischievous to the profitable health of the nation as well as the entire growth of the profitable. This leads to a crawler movement of the development process and ultimately a complete over hauling of the entire system, lack of industrialization, capital flight and absence of technology transfer. For case the position of Nigeria’s share of foreign Direct Investment( FDI) in overflows to Africa, fell from35.3 in 2005 and stood at14.1 in 2010( CBN statistical Bulletin 2010). Hence, the macroeconomic terrain of the country is no longer conducive for investors to thrive and no bone will like to invest in a place where he’ll suffer capital loss no matter how promising and profitable it appears. In addition to what has been said so far, attempts will be made in the literature to unravel the cause of this volatility and unstable inflow of foreign direct investment to Nigeria and the consequences of similar volatility of overall of overall profitable progress in the country; among issues delved is the effect of global profitable policy shocks and query. Theoretically, query may negatively affect Foreign Direct Investment.