Nigeria and Foreign Direct Investment (FDI) from western countries, 1957-1985

Abstract

Capital, whether domestic or foreign, is the bedrock of economic development. No nation is self-sufficient no matter how advanced its economy. The quality of relations among nations, to a large extent, determines how much economic benefit each nation makes. Economic benefits constitute a major part of national interest in international relations. This article examines how Nigeria fared in her relations with the advanced and investing nations as she struggled to attract Foreign Direct Investment (FDI) into her economy since her independence to the mid- 1980s. Nigeria is a nation of abundance in terms of natural and human resources. She had enough resources for resource-seeking FDIs and a great market for marketseeking ones. With all these advantages why was Nigeria starved of sufficient Foreign Direct Investment (FDI) into her economy during the period under investigation? What had been the impact of Nigeria’s relations with the investing nations on her economy as she constantly played host to them? This article seeks answers to the above questions through a historical analysis of Nigeria’s relations
with nations that were home to FDIs and how these relations impacted her success or failure in attracting FDIs into her economy. The analysis is based on Social Exchange theory, a psychological as well as sociological theory that explains social change as a process of negotiated exchanges between parties. The theory has roots in economics. It is also used quite frequently in the business world to imply a two-sided, mutually contingent and rewarding process involving transactions. The methodology is narrative and analytical employing both primary and secondary sources of data, including archival materials, Newspapers and books for information. The article concludes that Nigeria’s style of relations with investing nations from the 1960s to the mid-1980s was inconsistent and impacted her efforts in attracting FDI negatively and changed the landscape of Foreign Direct Investment in Nigeria. Hence, we can say that the paradigm shift to open door policy can only benefit her if conducted with utmost sincerity and strategy.