Foreign Direct Investment And Poverty Reduction In Nigeria

Foreign Direct Investment And Poverty Reduction In Nigeria

Abstract

The study examined the Foreign Direct investment and poverty reduction in Nigeria and to examine if foreign direct investment has significant run impact on poverty reduction in Nigeria and to estimate if there’s any significant casualty between foreign direct investment and poverty reduction in Nigeria. Foreign direct investment( FDI) granger cause per capital income but PCI doesn’t granger cause FDI. therefore, there wasuni-directional reason lt the result depicted the spread of adaptation to the long- run equilibrium. The measure of ECM(- 1) is statistically significance(- O- 085) and it’s negative. My policy recommendation on the part of( FDI) policy makers should pay increased attention to the overall part of FDl on poverty reduc1ion in light Of this, there should be provision of enabling terrain that would give a better incitement to attract FDI in overflows. Foreign direct investment influence poverty reduction to really feel the impact of FDI, the government should insure there’s FDl in inflow to real sector.

Background to the Study

The significance of foreign capital to developing countries is well known. It supplements their domestic savings and it’s frequently accompanied with technology and directorial chops which are necessary in profitable development. Foreign direct investment can contribute in significant ways to breaking of the growth – poverty vicious circle, and there lies Nigerians hope. The Nigerian government hopes that Foreign Direct Investment( FDI) can make up for domestic capital faults, give technology, directorial chops, grease access to foreign request and induce both technological and effective spillovers to original enterprises. By furnishing access to external requests, transferring technology and structure capacity in the original enterprises generally, Foreign Direct Investment( FDI) is anticipated to ameliorate the integration of the mainland global frugality, goad profitable growth and palliate poverty.

Direct foreign investment has been characterized as the stylish form of foreign finance. The packages of Foreign Direct Investment( FDI) comes with finance, technology and largely professed labor force( Lall and Streeton 1977). Indeed in the case of Nigeria as in 3rd world countries Foreign Direct Investment( FDI) was the main channel through which their import- negotiation industrialization strategies were fulfilled.

It’s extensively believed that given the applicable host- country programs and a introductory position of development, benefits that might accrue from Foreign Direct Investment( FDI) include employment creation, the accession of new technology and knowledge, increased duty profit from cooperate gains generated by Foreign Direct Investment( FDI). All of these form of benefits are anticipated to contributed to advanced profitable and employment growth, which is the most important and effective tool for achieving advancements in mortal well- being for easing poverty in Nigeria.

Although, the impact of Foreign Direct Investment( FDI) on poverty relief depend basically on numerous factors similar as host country programs and institutions. The most effective way Foreign Direct Investment( FDI) help in easing poverty is the widening access to employment openings.

The capability of Nigeria to palliate poverty depends on acceptable flux of foreign investment coffers. The country has been passing difficulties in her trouble to palliate poverty for decades now. At present, maturity of Nigerians are living below the poverty position. Accordingly given the low position of per capital income characterizing the less developed husbandry, the traditional model of economics assumes that average and borderline consumption propensities are high, savings are low and that the conformation of new productive capital is confined.