Foreign Direct Investment And Capital Formation In Nigeria

Abstract

The opinion of the modernization theorists is that FDI exerts a significant positive effect on economies. The view of the dependency theorist, however, is that FDI and its attendant multinational capital present exploitative channels for the developed economies against the developing ones. This paper holds that, for Nigeria, FDI, is a significant positive contributor to the overall capital formation effort. However, the gains of FDI do not come so automatically. Therefore, efforts must be directed at the removal of such impediments as poor transparency in laws, especially in the areas of property rights, patent rights, copy right protection and commitment to enforcement of contracts etc.


Keywords: Foreign Direct Investment, Capital Formation, Dependency Theory, Modernization Theory.

JORIND Vol. 5 (2) 2007: pp. 7-7