CHAPTER ONE:1.3 BACKGROUND OF STUDY:Since the attachment of independent in 1960 various policies of the Nigeriagovernment have been geared essentially towards promoting the growth anddevelopment of the Nigeria economy by influencing the trends of gross fixeddomestic investment or indirectly through policies aimed at stimulating theflow of foreign finance in any growing economy. This is so given that in theliterature there are divergent views on the nature of effects of foreign directinvestment has been argued to be the most growth stimulation source offoreign finance in any growing economy. This is so given that in theliterature there are divergent views on the nature of effects of foreign directinvestment on host economics. Those that are of the view that foreign directinvestment produce positive effects on host economics argue that some ofthe benefits are in the form of externalities and the adoption of foreigntechnology, employers training and the introduction of new process by theforeign firms according to Ayadi, (2002) foreign direct investment2especially when it flows to a high risk area of new firms where domesticresource is limited.The first national development plan was launched for industrial trade off anddevelopments however as foreign industrial investors were. Rather apprehensiveof the nascent independent administration efforts had to be made not only toalloy their fears of nationalization but also attract additional foreign investmentthrough joint venture with individuals or the state. However Nigeria economyhas been one of the important destination points of foreign direct investment insub-Saharan Africa. The amount of foreign direct investment inflow into Nigeriaaccording to ayadi (2002) has reached US $ 2.23billon in 2003 and it rose to US$ 5.31billons in 2004 (9.13% increase) the figure rose again to US $9.92 billion(87%increasing) in 2005. The figure however declined slightly to US $ 9.44billion in 2006.Nigeria is argued to be buoyantly blessed with enormous mineral and humanresource but believed to be highly risky market for investment. Also decade ofbad governance have almost crippled. The national economy with corruption andmisappropriation is of fund becoming the norm rather than expectation. What is3the way out of this economic state? Many experts accepted that foreign directinvestment. Is a verifiable boaster to kick start the economy. According to Odozi(1995) foreign investment appears to be the most. Crucial component of capitalinflows and Nigeria should seek to attract in light of her current economiccircumstance. Some scholars are of the view that Nigeria. Is in need of foreigndirect investment as a verifiable boaster of the Nigeria economy while others areof the view that foreign direct investment is a form of neo- colonialism to whatextent. Has foreign direct investment helped. The economic growth in Nigeria.
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