Foreign private capital inflows in Nigeria’s democratic dispensation

Abstract

This paper examines the changing patterns of foreign private capital inflows, (FPCI) in Nigeria in the current democratic dispensation with a view to finding out whether the inflows have recorded significant increase since the institution of Democracy in the country. Relevant theories and empirical data were reviewed. Quantitative data obtained from the central Bank of Nigeria statistical bulletin were also analyzed using percentages and it was found that the rate of increase in the volume of FPCI is higher during the democracy era than the military era; also there is a remarkable increase in the percentage of capital inflows from the developed countries of United State’s of America and United Kingdom during the democracy era. The implication of these findings indicate that democracy attracts foreign investment and, in conjunction with the various reforms embarked on by the Nigerian Government since democracy, the confidence of the foreign investors from developed nations to invest in the Nigeria economy has as well been enhanced. Based on these it was recommended that greater transparency, equity and justice should be entrenched in the nation’s polity in order to ensure a stronger and lasting democracy; that the reforms should be maintained and strengthened in the various sectors of the economy in order to ensure their sustenance, which will further enhance the confidence of investors in the economy.

Keywords: Capital inflows; democracy; economic reforms; foreign investment