Top PDF Impact of Foreign Direct Investment on Poverty Reduction in Nigeria, (1980-2009).

Impact of Foreign Direct Investment on Poverty Reduction in Nigeria, (1980-2009).

Impact of Foreign Direct Investment on Poverty Reduction in Nigeria, (1980-2009).

income groups in the urban and rural areas live in individual houses or crowded flats (apartments). Rural dwellers live in cement or mud block houses with tin or thatched roofs, and have no running water for the most part. Water and electricity services in the major cities are erratic. Water supplies in many rural areas are infested with disease-carrying worms, while electricity services, under government patronage, are seldom available. There is, therefore, much poverty in the country, a situation that has led to a "brain drain" from the country to other nations of the world. Much of the despair can be linked to the awful quality of life of the average Nigerian, and also to the huge income disparity between the poverty-stricken masses and the few well-to-do Nigerians. Mismanagement and corruption on the part of the government squandered the nation's wealth, which encourage an atmosphere of violence that has become the order of the day. The report further confirmed that life expectancy which was 54 years in 1990 had dropped to less than 50 years in 2005. Access to adequate shelter, water and sanitation facilities as well as communication had been very low while income inequality had also worsened during the same period. The worsening situation had affected vulnerable groups and women in rural areas the most in particular are the individuals with limited or no formal education, large families’ farm communities and groups engaged in informal sector activities. However there are some measures that the federal government of Nigeria had taken in the past to present time in order to tackle poverty, such as: National Directorate of Employment (NDE), National Agricultural Land Development Authority (NALDA), Family Economic Advancement Programs (FEAP), Directorate of Food, Roads and Rural Infrastructure (DFRRI), Better Life Program for Rural women (BLP), Nigerian Agricultural and Cooperative Bank (NACB), Peoples Bank of Nigeria(PBN), National Board for Community Banks (NBCB), and lately National Poverty eradication Program (NAPEP). Despite these heartwarming programs, percentage of the poor seems not to reduce as expected. It is obvious to common sense that there are numerous advantages in the reduction of poverty through FDI; the question is that of what effect is FDI on poverty reduction? Unfortunately, work on the FDI and poverty reduction links is very scanty. Most of the poverty related subjects typically relate to economic growth, without exploring further, the probable contribution of FDI.
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The Impact of Foreign Direct Investment on Poverty Reduction in Nigeria

The Impact of Foreign Direct Investment on Poverty Reduction in Nigeria

This study aimed at identifying the impact of foreign direct investment on poverty reduction and whether there exists a causal relationship between FDI and poverty reduction in Nigeria. The study was based on time series data which were collected from secondary sources and cover the period from 1980-2012.the OLS estimation technique has been applied to estimate the mode and Co integration as well as Error Correction mechanism test were also carried out. Estimation results reveal that FDI responds positively to real per capita GDP both in the long run and short run but with no effect. Thus, we concluded that this may be a result of profit repatriation of foreign firms, crowding out of domestic investment because of FDI or low level of human capital in the country. Despite how desirable the inflow of FDI is to developing countries, care should be taken when attracting foreign investments and they should be directed to the productive sectors of the economy. Also government should create a competitive environment so as to maximize the benefits of FDI because by exposing foreign investors to an even playing field with indigenous investors, this will enable domestic companies to upgrade their management and technology. Finally, the revenue fortune accruable to federal government by way of taxes paid by foreign investors should be directed to productive activities in the real sectors of the economy, especially agriculture.
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Impact of Foreign Direct Investment on the Economy of Nigeria

Impact of Foreign Direct Investment on the Economy of Nigeria

The growing integration of production, trade and capital transfers into the global economy and the success story of the Asian tigers compelled African countries to embark on major policy, structural and institutional reforms in addition to embracing democratic government with a view not only to curtail the tide of economic decline and fluctuations, but also to launch the continent on the path to sustainable economic growth and development. In the post independence years, many African countries, Nigeria inclusive, regardless of ideological orientation, had embarked on massive medium to long term plans in which public enterprises in all sectors were to serve as engines of growth and instrument for achieving sustainable economic independence. African governments were realistic and able to recognize the important role the private sector plays, mostly foreign direct investment in economic growth and development of a nation. The increase in foreign capital inflows offers opportunities for Nigeria and other developing countries to invest in infrastructure and facilitate trade finance to foster a self-reinforcing cycle of sustained economic growth and poverty reduction (Udeajah, 20011). It becomes imperative for Nigeria to seek to tap from foreign capital to meet her investment demands and foster economic growth by establishing transparent rules and procedures with the assurance that contracts will not be breached, domestic capital market strengthened, public-private risk mitigating instruments developed and public providers of infrastructural services assisted to attract foreign investors into the country.
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Effect of Foreign Direct Investment and Stock Market Development on Economic Growth in Nigeria (1980-2009)

Effect of Foreign Direct Investment and Stock Market Development on Economic Growth in Nigeria (1980-2009)

The study examined the impact of FDI and stock market development on economic growth in Nigeria. The study used annual data from 1980 to 2009. The Cointegration analysis reveals existence of long-run relationship among FDI, stock market development and economic growth. Contrary to previous researchers who found FDI and stock market development to be negatively affecting growth in Nigeria, we find significant positive impact on growth in Nigeria. The concentration of FDI in the mining sector which does not generate direct growth impacts on the wider economy has been cited as the reason for negative effect of FDI on economic growth. The Financial Market in Nigeria show that investment in share and stock in the market benefited both resident and non-resident from the listing of stock exchange market which accounts for about 50 per cent of the total market capitalizations and its exclusion from the non-resident investors restriction which allowed a single investor (i.e. one who is not a Nigerian and who lives outside the country) to hold up to 10 percent and no more than cumulative total of 74% of every equity. One important thing worth pointing stock market development play major role in attracting FDI (see Impulse response in Figure 3 in Appendix). Our results have several policy implications. First, we support the policy maker’s decision to slash the non-resident investors for listed companies. This will attract major investors to other sectors of the economic to bring need growth in the exchange market and the economy as whole. Second, policy makers should devise strategies to increase the FDI stock (retain FDI) and offer incentive for long investing and listing on the stock market so that the main objective of the government to stimulate growth will be fulfilled.
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Impact of Foreign Direct Investment on Human Development Index in Nigeria

Impact of Foreign Direct Investment on Human Development Index in Nigeria

Compared with studies on the relationship between FDI and economic growth, studies devoted to examining the impact of FDI on human development are relatively scarce. However, for the last decade, the literature on the latter has been growing fast as a result of a paradigm shift declaring that the ultimate aim of investment policies should be to improve human development. Arcelus, Sharma, and Srinivasan (2004) scrutinize the effect of FDI on human development using the HDI scores for both middle- and low-income countries. For the sample period of 1975–1999, they find that FDI has positive and significant impact on human development for both groups of countries. Srinivasan (2005) examines the effect of foreign capital flow on the three ingredients of HDI—wealth, life expectancy, and educational attainment—and finds that the effect of foreign capital on human development depends on several factors, the most important of which is returns to scale. Gohoun and Soumare (2012) investigate the impact of FDI on poverty reduction, which is an important determinant of human development, for the 1990–2007 period in five African regions by using FDI net inflow and HDI of UNDP as main variables. Their results provide evidence for a positive and significant relationship between FDI and poverty reduction. Also, they report that the effect of FDI inflow on poverty reduction is the strongest for poorer regions 3 .
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Contribution of foreign direct investment to poverty reduction: The case of Vietnam in the 1990s

Contribution of foreign direct investment to poverty reduction: The case of Vietnam in the 1990s

Theoretically, Industrial Zones (IZs) and Export Processing Zones (EPZs) can be a measure to help overcome drawbacks of poor infrastructure of some regions in attracting FDI. Nevertheless, this has been criticised not to be exploited very well in Vietnam. Early in 1991, the Vietnamese government approved the operation of IZs and EPZs and since then the authorities have advocated IZs, EPZs in hard up provinces in order to promote development there. There have been 61 IZs and EPZs approved so far but the number of built zones is smaller since the implementation of projects that build IZs and EPZs is slow. In addition, most of these zones are located in more developed areas: 15 zones in the North (mainly in Hanoi and Hai-phong), 8 zones in the Central Region and 38 zones in the South (mostly in HoChiMinh City, Dong-nai, Binh-duong). Furthermore, the operation of these zones is an issue. Though investing in IZs and EPZs are encouraged, through simple administrative procedures, tax incentives, renting areas in built zones account for a relatively small share in total areas of builted zones, especially in hard up provinces. Hence, FDI’s impact on poverty through IZs, EPZs seems to be limited.
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The Impact of Foreign Direct Investment on Economic Growth: The Case of Zimbabwe (2009- 2012)

The Impact of Foreign Direct Investment on Economic Growth: The Case of Zimbabwe (2009- 2012)

Zimbabwe once touted the Jewel of Africa at Independency in 1980, has over the years acquired a reputation of as the stickman of Southern African region, with disastrous economic policies, political instability and peculiar inability to get itself out of often self-inflicted difficulties (I. Bayai et al; 2013). United Nations Conference on trade and development (UNCTAD; 2000) estimated that in order to reach sustainable economic growth rate of 6% per annum, the domestic investment levels in the Sub Saharan Africa (SSA) have to increase to about 25% from the levels reached during the 1990s of less than 20%. As such foreign capital is regarded as very crucial in bridging the resource gap created by the shortage of savings in these developing countries.
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Constraints to Foreign Direct Investment:

The Nigerian Experience (1980 - 2015 )

Constraints to Foreign Direct Investment: The Nigerian Experience (1980 - 2015 )

Foreign Direct Investment is the distinctive feature of multinational enterprises (or transnational corporations); a theory of foreign direct investment is a theory of multinational enterprise as an actor in the world economy Hennart, (1982). Based on this theory, the extension of an enterprise from its home country into a foreign host country is FDI rather than an international transfer of capital [3]. The extension of an enterprise involves flows of capital, technology and entrepreneurial skill and, in more recent cases, management practice to the host economy where they are combined with local factors in the production of goods and services. Alfaro L, Chanda A, and Selin Sayek (2004), discovered that countries with better financial system and financial market regulations can exploit FDI more efficiently and achieve a higher growth rate [4]. The study argues that countries need not only a sound banking system but also, functioning financial markets to allow entrepreneurs obtain credit to start a new business or expand on existing one. In this way, countries are able to benefit from inward investment to achieve a higher growth rate. Robu (2010) asserts that FDI is usually sought by countries that are going through the transition period and/or those that face severe structural unemployment. This is the situation of Nigeria [8]. Balasubramanyam V. N, Salisu M.A and Sapsford D (1996) finds that the impact of FDI on growth is stronger in countries with a policy of export promotion than in countries that pursue a policy of import substitution [2]. Export promotion policy is characterized by a free play of market forces and allocation of resources on the basis of comparative advantage, furthermore, because of the neutrality policy orientation it offers none of the incentives for rent seeking which the import substitution provides is observed. The competition it allows from both international trade and domestic sources encourages research and development and investment in human capital.
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A Dynamic Investigation of Foreign Direct Investment and Poverty Reduction in Mauritius

A Dynamic Investigation of Foreign Direct Investment and Poverty Reduction in Mauritius

The focus of this study is to investigate the extent to which FDI flowing in Mauritius reduces po- verty or increases welfare by using time series data for the period 1980-2013. This study metho- dologically departs from the existing ones as it uses a dynamic vector autoregressive model that ensures the dynamic behaviour of the time series under consideration is properly captured, while simultaneously catering for endogeneity and causality issues. Any feedback and indirect effects which might be present will also be detected within the VAR/VECM framework. The results show that indeed FDI has contributed to poverty reduction; albeit the magnitude of the coefficient is relatively smaller in the short run as compared to the long run. Also a uni-directional causality is observed between FDI and poverty reduction. Furthermore, the results confirm the fact that FDI reduces poverty through the employment channel. Other important factors contributing to a re- duction in poverty according to this study is an increase in government spending as well as trade openness. Whereas, higher debt is observed to increase the level of poverty.
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The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

sees the currency exchange rate of Pakistan and when the exchange rate of Pakistan currency is high; simply it means that the company receives more currency for investment in Pakistan. So it has been proved in their research that exchange rate positively impacts on the Foreign Direct Investment. [1] studied the impact of foreign direct investment on Nigeria’s economic growth over the period of 1999-2013. The findings revealed that economic growth is directly related to inflow of foreign direct investment and statistically significant at 5% level. This implies that a good performance of the economy is a positive signal for inflow of foreign direct investment. [30] investigated the empirical relationship between Foreign Direct Investment and economic growth in Nigeria. The work covered a period of 1981-2009 using an annual data from Central Bank of Nigeria statistical bulletin. A growth model via the Ordinary Least Square method was used to ascertain the relationship between FDI and economic growth in Nigeria. The result of the OLS techniques indicated that FDI has a positive but has insignificant impact on Nigerian economic growth for the period under study. [27] found that uncertainty of exchange rates may have a positive impact on imports and exports and negative for trader’s lover risk and vice versa for risk averter traders. [28] found that the benefits of exchange rate depreciation in Pakistani rupee are decreasing up to 30 years as compare to foreign currency. The floating exchange rates depend upon market situation. It’s done with the hope of balance of trade. [17] found that there is the existence of a strong negative and significant impact on the volatility of the real exchange rate on investment at the plant in Colombia. [4] found that there is the existence of the negative and significant relationship of the volatility of exchange rates on FDI in member countries of the EU to Central and Eastern Europe.
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Agricultural growth and investment options for poverty reduction in Nigeria

Agricultural growth and investment options for poverty reduction in Nigeria

Nigerian economy is very vulnerable to oil price shocks, which impact the effective exchange rate, government expenditures, money supplies, trade, and inflation (Akpan 2009). Given that both the global financial crisis and the declines in world crude oil prices are expected to last for some time, the base-run simulation considers a modest, targeted economic growth rate that is lower than the 7.6 percent annual growth recorded during the period of 2002-07 (CBN 2009). Measured in real terms, although the crude oil sector’s GDP grew at only 4.4 percent annually during this period, due to rising world oil prices, the sector’s contribution to overall economic growth was mainly channeled through increased oil revenues. Given that this factor is unlikely to play a key positive role in stimulating growth in the present and near future, and some of its effects may even become negative (e.g., declines in oil revenue may force the government to increase the allocation of growth-stimulating funds), the base-run simulation targets a modest annual GDP growth rate of 6.5 percent over the next years (2008-17) (Table 1). While this growth rate is lower than the recent performance of the Nigerian economy, it is still relatively high considering the current external conditions worldwide. Moreover, this growth rate is higher than the historical average growth rate if a longer period is considered. For example, the average annual GDP growth rate during the period 1995-2007 was 5.5 percent (CBN 2009).
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The Impact of Foreign Direct Investment On Economic Growth In Nigeria

The Impact of Foreign Direct Investment On Economic Growth In Nigeria

The rationale for encouraging or attracting foreign investors to invest in developing countries is to fill the domestic capital formation gap to speed up economic growth which requires certain minimum level of foreign capital (Mieir 1964. Brewer 1991; and Digiovianni, 2005). Inspite of this encouragement, the flow of foreign direct investment (FDI) to developing countries is subject to controls exercised by the host country over the condition of entry of foreign capital, regulations of the operations of foreign capital, restrictions placed on the remittance of profits and the repatriation of capital (Meir 1964, and Morrissey and Rai 1995). Multinational Corporations (MNCs) are oligopolistic in nature hence their investment capital (FDI) gravitates towards countries and regions with highest financial returns and the greatest perceived safety to avoid the risk of capital loss. Their main objectives is profit maximization such that over (90%) ninety per cent of global FDI goes to other industrial countries and the fastest growing developing countries while they are largely unconcerned with issues such as poverty, inequality and unemployment alleviation (Todaro and Smith 2003).
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Determinants of Foreign Direct Investment in Nigeria

Determinants of Foreign Direct Investment in Nigeria

With reduction in oil prices between 2008 and 2009, it became apparent that alternative sources of development financing must be sought along with official development assistance currently injected into the economy. Poverty, disease, youth unemployment, income inequality and illiteracy have persisted. It is argued that it is necessary to augment domestic savings by encouraging FDI inflow which will lead to improvement in the balance of payment, in technology, employment, foreign exchange earnings, and decrease in import bills. This is to say that FDI is seen as a driver of development by providing resources for advancement and transformation.
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GOVERNMENT INVESTMENT, FOREIGN DIRECT INVESTMENT AND STANDARD OF LIVING IN NIGERIA

GOVERNMENT INVESTMENT, FOREIGN DIRECT INVESTMENT AND STANDARD OF LIVING IN NIGERIA

Licensed under Creative Common Page 203 There is a number of studies on private investment and the economy; a handful of them emphasis on the role of government in enhancing private investment and its overall impact on development. Oyedokun and Ajose (2018) attempted to investigate why Nigeria's domestic investment has not been growing and its impact on economic growth. They used Ordinary Least Squares technique to carry out the study over the period 1980 - 2016 and found out that domestic investment positively influences real Gross Domestic Product (GDP). The works of researchers like Soyibo (1996), Ajide (2013) and Akanbi (2010) toed almost a similar line, they all found the existence of a positive correlation between investment and economic growth, with real output, cost of capital and governance indicators as some of the core determinants of private investment in Nigeria; albeit Busari, Omoke, and Adesoye (2002) who assessed the impact of trade practice and its credibility on private investment in Nigeria had a contrary view. The findings of the works of Dailami and Walton (1992), Luintel Mavrotas (2005), Fripong and Marbuah (2010) and Fawowe (2011) that were carried out on countries other than Nigeria also showed a positive relationship between private investment and economic growth and governance indicators.
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Foreign Direct Investment and Employment Generation in Nigeria

Foreign Direct Investment and Employment Generation in Nigeria

Nigeria is the most populous country in Africa and it is blessed with a large pool of surplus labour. Nigeria’s labour market is dualistic as it is characterized with both formal and informal employment with the bulk of its labour force engaged in agriculture particularly at the substance level (Ogunlela and Mukhtar, 2009). Oni (2006) argues that reducing the level of unemployment will increase the income level in the economy and thereby reduce the level of poverty. To reduce the level of unemployment, some scholars have argued that the flow of goods and services (trade flows) could propel employment generation, especially in developing countries. Growth in employment has a feedback on economic growth, such that an increase in labour incomes would expand domestic demand, which in turn would lead to sustainable GDP growth and reducing risks of excessive reliance on uncertain foreign markets (Wheeler and Moody, 1992). Although Nigeria has large oil revenue, but because there is a tenuous nexus between the oil sector and the rest of the local economy, unemployment is high, poverty is prevalence and security is a current challenge (Okonjo-Iweala 2012, Olugbile 2012). This implies that the large oil revenue is not used to generate employment in the economy. The erratic movement in the rate of unemployment in the country is not unconnected with the various short-run policies put in place to curb unemployment from time to time. In general, Nigeria like any other countries in the world has realized that, as a matter of fact, apart from education, the second most important form of empowerment that a state can bequeath to its citizen is to assure them of gainful employment, hence, successive governments have incorporated one form of employment policy or the other into their programmes. The issue of employment is very germane to Nigeria as well as every economy
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Impact of Foreign Direct Investment on the Financial Performance of Listed Deposit Banks in Nigeria

Impact of Foreign Direct Investment on the Financial Performance of Listed Deposit Banks in Nigeria

that the irregularity of information disturbs the firm‟s (in this case the bank‟s) value which affects the wealth bank‟s shareholders (Hennart, 1982; Nwanji & Howell, 2007b; Salazer, et al., 2012; Aigner et al. 2013; Cyree & Morris, 2018; Wong, 2012; Qureshi et al., 2015). The factors that lead to a higher cost of capital include a lack of relevant information on the value of capital available to investors at the time of the investment (Wong, 2012; Qureshi et al., 2015). This is a process that a company undergoes to determine the best output and price levels to maximise its return. The two models of the trade-off theory are the Marginal Cost-Marginal Revenue method and the Total Cost-Total Revenue Methods. The approach is based on the argument that the primary goal of an organisation is to maximise profit. Studies in this area include but not limited to that of (Modigliani & Miller, 1963; Helpman, 1998; Childers et al., 2001; Dasgupta, 2009).
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Impact of Foreign Direct Investment on Manufacturing Output in Nigeria - An ARDL Approach

Impact of Foreign Direct Investment on Manufacturing Output in Nigeria - An ARDL Approach

Chandran et al. (2008) examine the short and long run dynamics of FDI over the manufacturing growth of Malaysia for the period of 1970-2003. They used new cointegration method of bounds test and the autoregressive distributed lag (ARDL) approach to estimate the short and long run production elasticity of FDI. Estimated FDI elasticity in the short and long run was found to be statistically significant. In contrast, Lean (2008) employed a VAR approach to analyzing the relationship between FDI and the economic growth of the manufacturing sector in Malaysia, from 1980 to 2005. The empirical findings suggest that the FDI and the growth in the manufacturing sector are independent. However, they acknowledged that FDI can achieve growth only if the host country has an established and sufficiently qualified or skilled labor force, the government, therefore, needs to focus attention on the detailed potential roles which FDI can interact with human capital in order to substantially influence the positive future development of the manufacturing sector in Malaysia.
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The Impact Foreign Direct Investment on Economic Growth in Pakistan Since 1980

The Impact Foreign Direct Investment on Economic Growth in Pakistan Since 1980

Khan and Khattak (2009), carried out study to investigate various demand side determinant of FDI inflow into Pakistan for the time period from 1971 to 2005. Different variables are taken which determined the FDI inflow such as size of the host market, local investment, trade openness, Government consumption, inflation rate, taxes and external debt and return on investment. Data were collected from different sources like Federal Bureau of Statistics and Pakistan economic Survey. Augmented Dickey-Fuller test and Error Correction Model were used to analyze the data and Ordinary Least Square (OLS) method and Log Linear Regression model were used for empirical estimation. The study found that some explanatory variable were highly significant that effect positively FDI inflow of Pakistan. Their research also suggested that Government of Pakistan need to improve infrastructure, reduce external debt, encourage local investment and offer fiscal and financial incentives that will increase the volume of FDI inflow in Pakistan.
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The Nature of Foreign Direct Investment and Its Impact on Sustainable Economic Growth in Nigeria

The Nature of Foreign Direct Investment and Its Impact on Sustainable Economic Growth in Nigeria

The one period lag of FDIOS (-1) is not consistent with the appriori expectation of positive sign. This implies that an inverse relationship exist between this variable and Nigeria economic growth. An increase of one per cent in the period lag variable of FDIOS (-1) will lead to 13.0.999 per cent reduction in economic growth. This variable is significant at 0.05 per cent significance level as confirm by low probability value of 0.0368. What this result is saying is that this variable is important as far as Nigeria’s economic growth is concerned, but the variable is not contributing positively to economic growth in Nigeria within the study period. Perhaps this could be a pointer to the credence of the assertion of CBN 2007 that the persistent deficit in the service account was attributable to the low investment in the shipping subsector by domestic entrepreneurs, non-compliance with global shipping policy as well as increased volume of business and private travel abroad by Nigerians. This causes deficit balance of payment, capital flight and reduces economic output.
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Impact of Fiscal Policy Instability on Foreign Direct Investment in Nigeria

Impact of Fiscal Policy Instability on Foreign Direct Investment in Nigeria

Fiscal policy has been defined as the planning of revenue and expenditure levels and pattern by government to influence the circular flow, or specifically to promote full employment production, price stability and national welfare (Fashola, 2001; Akanni and Osinowo, 2013). Governments directly and indirectly influence the way resources are used in the economy. Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.” By contrast, fiscal policy is often considered contractionary or “tight” if it reduces demand via lower spending (Horton and El-Ganainy, 2009; Akanni and Osinowo, 2013). Government expenditure can provide an impulse for sector output growth, while on the other hand; it can be harmful if it results in budget deficits and leads to competition for scarce financial resources from the banking sector as the government seeks to finance the deficit (Ezeoha and Chibuike, 2005; Osinowo, 2015).The main instruments of fiscal policy are: federal government expenditure, Agriculture, Mining, Manufacturing, Building and Construction, Wholesale and Retail Trade, and Services sector, amongst others, in the economy.
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