In 2007, Nigeria received a
net inflow of US$6.1 billion of foreign direct investment
(FDI), much of which came from Nigerians in the diaspora. Most FDI is directed
toward the energy and banking sectors.Any public designed to encourage inflow
of foreign capital is capable of generating employment opportunities within the
domestic economy.The Nigerian Enterprises Promotion(NEP)Decree of 1972(revised
in 1977)was intended to reduce foreign investment in the Nigerian economy.This
type of policy is not relevant in an economy with a rapidly growing force like
Nigeria.
Although one may accept the rationale for the promulgation of that decree at that time i.e. to promote indigenous entrepreneurship.But the decree or any exchange control policy that has the potential to discourage foreign investment will not be relevant under the present economic dispensations.The abrogation of the NEP decree was therefore a step in the right direction.
Furthermore,another reason for the low level of foreign investment in Nigeria is political instability.The various coups and counter coups since 1966,the discontentment and politically motivated riots following the long-drawn and inconclusive political engineering of the Babaginda Military Administration,all combined to create an environment not conducive to foreign investment.
Foreign direct investment(FDI)is arguably an important source of employment opportunities for developing countries like Nigeria.It is,therefore imperative that a healthy private sector thsat can earn a reasonable rate of return is promoted by the Federal Government.As aptly pointed out by Gerald Flood.
Developing countries that wish to attract FDI flows should consider measures such as establishing a transparent legal framework that does not discriminate between local and foreign investors;adopting liberal foreign exchange regime(e.g.,among,other things a regime without large gaps between official and market rates);creating simple,investor-friendly regulations and institutions and effectively administering them.
Therefore,the convertibility of naira,the relaxation of the control on remittance of profits and technical fees and the abrogation of the Exchange Control Act of 1962 and the Nigerian Enterprises Promotion Decree of 1989 as spelt out in 1995 Budget are the kind of reforms that can promote the inflow of foreign direct investment a politically stable environment is also of immense importance.
Swiss Banks to return Abacha Funds
The Swiss foreign ministry
says it has done all it can to ensure that funds stolen by the late Nigerian
dictator Sani
Abacha were used properly in his homeland. The authorities were
responding to allegations that $200 million (SFr240 million) of $700 million
handed back by the Swiss Banks to Nigeria had
been misappropriated.