Preconditions for Foreign Direct Investments Stimulation: The Nigerian Experience, 1985 – 1993

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Salami, A.T
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Following the 1980 Berg Report, and the injection of “political conditionalities” by the Bretton Woods Institutions (BWI), in particular the International Monetary Fund (IMF) and the World Bank (WB) in their financial relationships with the developing countries, the intellectual issue of how best to attract and stimulate foreign direct investments (FDI) became subsumed within the great debate ignited by the famous Report. As the debate raged on, there was the lack of specific focus on the determination of both the theoretical and empirical relationships, or the validation of the assumed theoretical and empirical relationships between the “new additionalities” and/or “political conditionalities” as postulated and propounded by the BWI and their intellectual hangers-on on the one hand, and the stimulation of FDI on the other. The lack of focus on the theoretical and empirical relationships obviously reveals the fact that perhaps certain preconditions are important for FDI to be stimulated and as well attracted on a permanent basis. Against the above background, the study concerned itself with what the preconditions are, and whether they were necessarily competitive politics, free press, tax incentives, good infrastructure, favourable investment laws, among others, as the Babangida administration implemented the combined, inseparable programmes of political transition and economic adjustment between 1985 and 1993 in Nigeria. While the data sources adopted by the study were rooted in the established traditions of broad qualitative research methodology through an intensive survey of the avalanche of materials on FDI in Nigeria in Central Bank of Nigeria (CBN) Reports, the technique of data analysis was patterned along the historical and analytical method of developmentalism, a perspective to scholarship that emphasizes history not as narrative events but as explanatory factor and/or force shaping and determining development and its processes. The study found out that the volume of FDI reflected the known pattern of general fluctuations even with the deliberate introduction of measures at stimulating and encouraging it. It, among others, further found out that the extent and volume of FDI in Nigeria depended on foreign investors’ independent assessments or thinking of Nigeria’s internal investment opportunities rather than on any regime’s articulated programme of FDI stimulation and attraction. The conclusion is therefore that FDI in Nigeria was more influenced by external considerations and factors, external considerations and factors that were least thought of in Nigeria’s domestic policy measures and programmes aimed at stimulating and attracting FDI under the Babangida administration. These external considerations and factors can be described as both the readiness and preparedness of the multinational corporations (MNCs) to tap swiftly any available opportunity that would earn them both the profit and influence to continue to manipulate the home government (Nigeria) for greater relevance, rather than the logic and argument of free press, infrastructure, trade liberalization, etc, the assumed theoretical preconditions of FDI stimulation and attraction especially by the BWI and their intellectual hangers-on.
A Thesis Submitted to the School of Postgraduate Studies, University of Lagos
political conditionalities , International Monetary Fund , World Bank , Financial Relationships , Research Subject Categories::SOCIAL SCIENCES::Social sciences::Political science
Salami, A.T (2010). Preconditions for Foreign Direct Investments Stimulation: The Nigerian Experience, 1985 – 1993. A Thesis Submitted to University of Lagos School of Postgraduate Studies Phd Thesis and Dissertation, 376pp.