Foreign Investment and Employment Creation in Nigeria 2004-2010.
ABSTRACT
The issue of the using external financing, in particular foreign investment in achieving developmental objectives and aspirations has been at the forefront of economic diplomacy of various Nigerian governments since 1985. In particular, National Economic Empowerment and Development Strategy (NEEDS), programme has encapsulated this view for it to achieve its objectives of poverty reduction, wealth creation and employment generation.
It is believed that the achievement of these objectives will help in the transformation of the Nigeria’s socio-economic development. This Study is an effort to examine the inflow of foreign investment as a source of external finance for the achievement of employment creation objectives of NEEDS. Blending the primacy of material conditions of Marxist political economy approach and the theory of Post-Colonial State as the theoretical framework, and using the secondary sources of data, the study found the following.
There have been increase in the inflow of foreign investment, and this inflow has not significantly affected employment creation as unemployment increased within the period. The major determinant of foreign investment inflow within the period is the increase in the level of external reserve and the liberalisation of transaction in the Nigeria financial account occasioned by the IMF/World Bank induced policy of debt relief.
TABLE OF CONTENT
Title ……………………………………………………………………………………………… i
Approval ……………………………………………………………………………………………… ii
Dedication ……………………………………………………………………………………………… iii
Acknowledgment ………………………………………………………………………………………….. iv
Table of Content ……………………………………………………………………………………………. v
List of Tables ……………………………………………………………………………………………… vi
Abstract ……………………………………………………………………………………………… vii
CHAPTER ONE: Introduction
1.1 Introduction ……………………………………………………………………………… 1
1.2 Statement of Problem ………………………………………………………………………………. 3
1.3 Objective of Study ……………………………………………………………………………………. 8
1.4 Significance of Study ………………………………………………………………………………… 9
1.5 Literature Review……………………………………………………………………………………… 10
1.6 Theoretical Framework ……………………………………………………………………………… 22
1.7 Hypotheses ……………………………………………………………………………………………… 24
1.8 Method of Data Collection …………………………………………………………………………. 24
CHAPTER TWO: Economic Policy and Development Strategy
in Nigeria ………………………………………………………………………………… 27
2.1. Investment and Development Strategy ……………………………………………………….. 29
2.2 Foreign Investment as Source of External Finance for Developing Countries ….. 32
2.3. History and Overview of Foreign Investments in Nigeria. …………………………….. 38
2.4. Policies and Incentives for Foreign Investments in Nigeria. …………………………. 42
CHAPTER THREE: Meaning of Employment /Unemployment ………… 54
3.1. Trends in Manpower Employment in Nigeria. …………………………………………….. 58
3.2. Employment Strategies and Policies in Nigeria. ………………………………………….. 63
3.3 Nature and Structure of Nigeria Economy. …………………………………………………… 67
CHAPTER FOUR: Global Capitalism and Politics of Economic Policy in
Nigeria ………………………………………………………………………………… 71
4.1 Foreign Investment and Employment Creation under NEEDS ……………………….. 74
4.2 Component of Foreign Investment Inflow under NEEDS. ……………………………… 85
4.3 Government Economic Policy and Employment Creation. …………………………….. 95
CHAPTER FIVE: Summary/ Conclusion and Recommendations. . 102
BIBLIOGRAPHY …………………………………………………..109
INTRODUCTION
The need to improve human welfare is the essence of economic policies pursued by States. This is based on the underlining economic activities which the people pursue. Economic activities are the basis for production and reproduction of human material existence and economic relations. Thus, for human being to produce he must have some instruments at his disposal. Classical economic theory assumes that capital and labour are the two critical factors of production.
Factors of production help in improving the economy’s productive forces. States in essence pursues policies aimed at improving its citizen’s standard of living by providing or acquiring these productive forces either internally or externally. Policy which States pursue in fact emanate from the need to counteract the contradictions and problems arising from impediment to accumulation of capital in the domestic economy.
These problems and contradiction emerge as States produce and reproduce its material existence. The Nigerian State being incorporated into the world capitalist economy is affected by the contradiction inherent in the system. Thus, the understanding of the achievement of Nigeria’s developmental goals and aspirations, means understand the position of Nigeria State in the international capitalist division of labour in this era of globalization.
One of the key components of the movement towards economic globalization is international capital flow.Foreign direct investment (FDI), portfolio investment, foreign credit and loans, and highly speculative funds are the major categories of the international capital flow. According to Khor (2001:42) globalisation of financial sector is driven by financial deregulation and liberalisation.
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