IMPACT OF FOREIGN DIRECT INVESTMENT ON THE NIGERIAN ECONOMY
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND TO THE STUDY
    As a result of increases in the wave of globalization and liberation since the 1980’s the penetration, banking and discriminating of barrier to trade investment capital flows and technology movements across national frontiers have been brought to fore.
    This is against the backdrop of dramatic increase in foreign private investment flows, spectacular spread of transactional corporation (TNC) the rapid advancement in technology the development of rapid means of transportation and telecommunication and the proliferation of the mass media.
    Since the mid 1980s, the growing integration of markets and financial institutions and increased in economic liberation  have been made for foreign private investment.
    According to Avemu (2000) liberalization policies have expanded effective economic space where producer and investor could interact, this promoting globalization in which these economic actors behave as if the entire world is a single market Avemu observed also, that it is equally true that globalization has hastened the pace and equally expanded the scope of economic liberalization. Again Avemu write that globalization again has inbuilt strategy to further accurate liberalization.
    Therefore, it is difficult to isolate foreign private investment from globalization because the important economic consequences of globalization especially for developing countries like Nigeria have been the massive and unprecedented inflows of foreign private investment, during the first decade of the 20th century. However, it is pertinent for the sake of clarity to stare foreign private investment consist of foreign direct investment has been negligible in Nigeria and volatile in nature.
    Foreign Direct Investment (FDI) is viewed as a major stimulus to economic growth in developing countries. Its ability to deal with two major obstacles, namely shortage of financial resources and technology and skills has made it the centre of attention for policy in maker in low income countries in particular.
    Foreign Direct Investment (FDI) the largest component of long term capital flows to developing countries, has become a crucial factor in modern economic development process.
    From available statistics, the challenge to attract more inflows for investment in developing project has become acute in sub Saharan Africa where only a small proportion of new inflows has gone. This situation has been worsened due to accelerating process of globalization. Thus Nigerian dire need for Foreign Direct Investment (FDI) could classified into three broad aspects: firstly, Foreign Direct Investment (FDI) is required to fill the savings and foreign exchange gaps and thereby enable the country to achieve its economic potential. The supply side of foreign resources in order to elicit the necessary inverse output, minimize the growth of unemployment and reduce the inflation rate significantly. Secondly Foreign Direct Investment (FDI) inflow is required to stimulate the acquisition of technology, transform the structure of the non oil export sector. Thirdly, the effective management of external liabilities, both currently and in the medium to long term requires the injection of non-debt creating external resources. In spite of these optimism and expectation the aggregate capital flows into African countries and indeed Nigeria is quite low.
    Since Foreign Direct Investment (FDI) is subject to many of the same push factors (globalization financial integration and technological innovation) and full factors (large market size and high per-capital income, economic political, and social viability, favourable investment climate, liberalization of trade and financial regime and actual privatization policy) a possession of these “factors” and the consequent design and implementation of appropriate policies and measures that would make the policy environment, investment friendly remain a fundamental prerequisite.
1.2    STATEMENT OF THE RESEARCH PROBLEM
    In view of the above therefore, the study specially seeks to provide answers to the following research questions.
i)    Does Foreign Direct Investment has any impact on the growth of the Nigeria economy?
ii)    Does openness has any impact on the growth of the Nigerian economy?
iii)    Does inflation rate has any impact on the growth of the Nigeria economy?
iv)    Does human capital affect the growth of the Nigerian economy?
1.3    OBJECTIVES OF THE STUDY
    The study seeks to determine the impact of Foreign Direct Investment (FDI) on economic growth in Nigeria, more specifically it seeks to determine.
i)    The impact of openness on the economic growth in Nigeria.
ii)    The impact of inflation rate on the economic growth in Nigeria.
iii)    The impact of human capital on the economic growth in Nigeria.
1.4    HYPOTHESIS OF THE STUDY
    The following are the hypothesis for this study;
i)    Openness significantly affect economic growth in Nigeria.
ii)    Inflation rate significantly affect economic growth in Nigerian
iii)    Human capital significantly affect the economic growth in  Nigeria.
1.5    SIGNIFICANCE OF THE STUDY
    This study is of vital significance in many important aspect given the unprepossessing growth rate of Nigerian economy, coupled with the myriad of problems in the country, the study is particularly important in ascertaining if the impact of Foreign Direct Investment (FDI) inflows have any bearings on the state of the Nigerian economy.
    This study will also chart a new course of action and implementation of the appropriate and necessary policies that will act as incentive will provide policy makers the fore-sight to better cushion the unpleasant effects of fluctuation in the Foreign Direct Investment (FDI) in Nigeria.
1.6    SCOPE OF THE STUDY
    The study focuses on the impact of Foreign Direct Investment on economic growth in Nigeria. The study cover a period of 30 years, 1981 to 2011. The period 1981 to 2011 was chosen for the study because basically, the study relied heavily on secondary data. So much of the data and materials relating to the study were obtained from the Central Bank of Nigeria statistical Bulletin World Bank journal and reports, workshop papers, research institution such as the National Centre for Management and Administration (NCEMA) and the Nigerian conference on trade and development (UNCTAD) articles and publication of the Nigerian Economic Society (NES) Newspaper past project works and the interest were of immense help, relevance and academic value to the goal of the research.
1.7    LIMITATION OF THE STUDY
    No study is perfect, limitation is inevitable in any research work or exercise so this research work is not without some unavoidable limitations.
i)    The inability of obtain a completely detail literature on the impact of Foreign Direct Investment (FDI) in  Nigeria.
ii)    Low response rate from the respondents to get adequate information for meaningful result.
iii)    Imprecise measurement of variables to get accurate statistic.