The survey investigated the impact of oil Foreign Direct Investment ( FDI ) on Economic Growth in Nigeria. Real gross domestic merchandise was used as the indices for economic growing and the dependant variable, while oil foreign direct investing, involvement rate and exchange rate as explanatory variables, the survey analyze the consequence that oil Foreign Direct Investment ( FDI ) had on Real Gross Domestic merchandise. The arrested development theoretical account was used to analyze the information for a ten-year period of oil FDI. Consequence showed that Foreign Direct Investment ( FDI ) in the oil sector accounted for important growing in Nigerian economic system for the period under survey. Findingss farther indicated a important relationship of the state ‘s exchange rate and economic growing. It was concluded that there is a heavy trust of the Nigerian economic system on oil ; therefore the demand for the authorities to hammer feasible partnership in this sector in order to do sustainable parts towards the variegation of concern activities off from the oil sector.
THE IMPACT OF OIL FOREIGN DIRECT INVESTMENT ON THE ECONOMIC GROWTH IN NIGERIA
George Nnenna Victoria
The purpose of this survey is to analyze the impact of foreign direct investing in the oil sector on the economic growing in Nigerian. Evidence in the Nigerian economic system has shown that since the 1980 ‘s some relationship exist between the stock of money and economic growing or economic activity. Over the old ages, Nigeria has been commanding her economic system through fluctuation in her stock of money. Consequent upon the consequence of the prostration of oil monetary value in 1981 and the B.O.P shortage experienced during this period, assorted methods of stabilisation runing from financial to pecuniary policies were used. Interest rates were fixed and these were said to be good to large borrower husbandmans ( Ojo 1989 ) . Ikhide and Alawode ( 1993 ) while measuring the consequence of Structural Adjustment Programme ( SAP ) concluded that cut downing money stock through increased involvement rates would take down gross National merchandise. Therefore, the impression that stock of money varies with economic activities applies to the Nigerian economic system ( Laidler 1993 ) . The end product development and other economic growing procedure ( via involvement rate deregulating ) in the Nigerian economic system calls for considerable trial of the cogency of Friedman and Mieselman ( 1963 ) work on the Nigerian economic system. The deduction of the stableness of the relationship between money and economic growing will demo the effectivity of pecuniary policy following the conventional Hicksian IS-LM analysis.
Interest rate reform, a policy under fiscal sector liberalization, was to accomplish efficiency in the fiscal sector and breeding fiscal deepening. In Nigeria, fiscal sector reforms began with the deregulating of involvement rates in August 1987 ( Ikhide and Alawode, 2001 ) . Prior to this period, the fiscal system operated under fiscal ordinance and involvement rates were said to be repressed. Harmonizing to McKinnon ( 1973 ) and Shaw ( 1973 ) , fiscal repression arises largely when a state imposes ceiling on sedimentation and loaning nominal involvement rates at a low degree relation to rising prices. The ensuing low or negative involvement rates discourage salvaging mobilization and channelling of the mobilised nest eggs through the fiscal system. This has a negative impact on the measure and quality of investing and therefore economic growing. Therefore, the outlook of involvement rate reform was that it would promote domestic nest eggs and do loan able financess available in the banking establishments. But, the unfavorable judgment has been that the “ tunnel-like ” construction of involvement rate ( Ojo, 1976 ) in Nigeria is capable of detering nest eggs and retarding growing in position of the empirical nexus between nest eggs, investing and economic growing. The critical inquiry, therefore, is whether existent involvement rates have any positive consequence on economic growing in Nigeria.
The present survey will look into the of import function of foreign direct investing in the upstream sector on the economic development of Nigeria, and besides, utilizing the involvement rate and exchange rates for the period under survey as explorative variables.
STATEMENT OF AUTHENTICITY
I have read the University Regulations associating to plagiarism and attest that this thesis is all my ain work and make non incorporate any unacknowledged work from any other beginnings.