Abstract:
The issue of the using external financing, in particular foreign investment in achieving developmental objectives and aspirations has been at the forefront of economic diplomacy of various Nigerian governments since 1985. In particular, National Economic Empowerment and Development Strategy (NEEDS), programme has encapsulated this view for it to achieve its objectives of poverty reduction, wealth creation and employment generation. It is believed that the achievement of these objectives will help in the transformation of the Nigeria’s socio-economic development. This Study is an effort to examine the inflow of foreign investment as a source of external finance for the achievement of employment creation objectives of NEEDS. Blending the primacy of material conditions of Marxist political economy approach and the theory of Post-Colonial State as the theoretical framework, and using the secondary sources of data, the study found the following. There have been increase in the inflow of foreign investment, and this inflow has not significantly affected employment creation as unemployment increased within the period. The major determinant of foreign investment inflow within the period is the increase in the level of external reserve and the liberalisation of transaction in the Nigeria financial account occasioned by the IMF/World Bank induced policy of debt relief. This has induced the amount of foreign portfolio investment inflow which has increased more that the inflow of Foreign Direct Investment. The largest inflow went into stock market and banking sectors. We also found that the policy of low inflation pursued by the Central Bank of Nigeria, as a means of stabilizing, the economy for attraction of foreign investment contradicts the objectives of employment creation of NEEDS as it takes away money in circulation and reduced the amount available for domestic investors. The study also found that the policy is a source of short term accumulation for the financial capital and has increased the integration of the Nigeria economy to the international capitalist market.
