Foreign direct investment (FDI) in Nigeria: Opportunities, challenges and way forward
The significance of foreign direct investment on economic growth in Nigeria cannot be over-emphasized. As an emerging market in Africa with huge economic potentials, Nigeria requires significant FDI to achieve sustainable economic growth and development. While key sectors of the economy have witnessed some levels of FDI flows in recent years especially in the oil and gas, food and beverage, information technology and telecommunications industries, the country has failed to maximize FDI potentials. The gap between current reality and future projections is attributable to poor infrastructure and inconsistent regulations, political risk, macroeconomic parameters, security concerns, and corruption, amongst others. These challenges have weakened the country’s future prospects of attracting desirable FDI levels commensurate with our potential. More so, the NIPC Act which protects foreign investment in Nigeria lacks the authority to assist investors to cope with the myriad ministries, departments and agencies (MDAs) in resolving trade issues and as a result, there is insufficient private sector participation in its operations. This paper recommends massive infrastructural development via increased capital expenditure budget by government, efficient monetary and fiscal policies by the Central bank of Nigeria and Ministry of Finance; and quick prosecution of corruption cases by special anticorruption courts. In addition, the security agencies must be strengthened continuously to enhance their capacity to tackle security challenges effectively especially the menace of Fulani herdsmen which currently impacts investments in Agriculture sector negatively.