[The Assessment of the Impact of Foreign Direct Investment: A case study of Nigeria]

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The Assessment of the Impact of Foreign Direct Investment: A case study of Nigeria

Country Overview

With a population of around 150 million, Nigeria is the most populous country in Africa. It is also one of the world's largest oil producers. British influence and control over Nigeria grew through the 19th century, and in 1914 the area was formally united as the Colony and Protectorate of Nigeria. The country gained independence from Britain in 1960. Ethnic tensions led to two military coups in 1966 and a three-year civil war followed. Subsequent years saw continued political instability and 16 years of consecutive military rule, until a new constitution was adopted in 1999, resulting in a peaceful transition to civilian government. The country continues to experience longstanding ethnic and religious tensions. The government has been facing the daunting task of reforming a petroleum-based economy. Because of long-time political instability, corruption, inadequate infrastructure and poor macroeconomic management, billions of dollars of wealth generated from oil have apparently benefited a few in the country while offering little to improve the life of the vast majority of the population. More than half of Nigeria's population still lives in poverty.

Economic Overview

Nigeria is the most populous country in Africa. As one of the world's largest oil producers, Nigeria's economy is heavily dependent on the oil sector. The country has long been hobbled by political instability, corruption, inadequate infrastructure and poor macroeconomic management, with more than half of its population still living in poverty.

Nigeria emerged from repressive military rule to leadership by an elected civilian government in May 1999. The country has undertaken structural reforms, including measures to: tackle public sector corruption, improve the transparency of public policies, and improve the business environment. These reforms have made Nigeria better prepared to deal with the global economic crisis, having averted the boom-bust pattern that characterized previous oil price cycles. Central to this success is the oil-price-based fiscal rule, which broke the link between public spending and oil prices and created a substantial cushion of oil savings. Nevertheless, the global crisis had a significant impact on Nigeria's economy, with lower oil prices putting pressure on the fiscal and external accounts. Infrastructure has been the primary obstacle to the country's growth. In August 2010, government officials unveiled a power sector blueprint that included privatization of the state-run electricity generation and distribution facilities. The government also has been working to develop stronger public-private partnerships for roads.

In May 2011, On the Nigerian Senate approved ...