SOAS Research Online

Abstract

The Nigerian Governments in speeches to the public and foreign missions and in Parliamentary Debates have repeatedly emphasised the need for foreign private capital and the desired measures to attract it to Nigerian manufacturing. The reasons for this are clear: Nigeria is deficient in physical capital as well as in the knowledge of modem industrial and managerial technique. She therefore needs foreign capital and expertise to supplement her own resources. The extent of this reliance is illustrated in the fact that the Federal Government financed 40 per cent of her 1955/62 Development Plan from foreign sources; and the National Development Plan, 1962/68, depends for its successful execution on a 50 per cent contribution from foreign resources. So far, however, no proper study has been made of the amount of foreign private investment in Nigerian manufacturing, the factors that influenced its stock and distribution, the mechanism and channels by which it entered Nigeria, or an evaluation of its possible contribution to Nigeria's economic development. This study attempts to fill this gap. The thesis is divided into eight chapters. Chapter One examines the amount and the main factors which influenced foreign private investment in Nigerian manufacturing during 1939/54 and finds that it is small and that government policy played a negative role. Chapter Two analyses the amount and sectoral distribution of foreign manufacturing investment during 1955/65 and finds that it is considerable relative to the period, 1939/54. Chapters Three and Four examine the main factors responsible for this and find that the two most important favourable factors were government policy and Nigeria's potential market. The location of foreign manufacturing is examined in Chapter Five which finds that it is concentrated in Southern Nigeria and in the principal town or regional capital within the Regions. Chapter Six, which examines the mechanism of foreign private investment in Nigerian manufacturing, finds that partnership between indigenous and foreign capital is now common. The channels of investment are examined in Chapter Seven. It is found that about 69 per cent of foreign private investment in Nigeria during 1961/64 came from sources internal to the companies and that retained earnings accounted for about 29 per cent of net new investment during 1961/63. Chapter Eight examines the contribution of foreign manufacturing investment to Nigeria's economic development, Summarises the main findings of the study and highlights the main defects of Nigeria's industrial policy. An appendix relates foreign private investment in manufacturing to all foreign private Investment in Nigeria during the period of this study.