Today's Leaders Forum Praise 2019: Foreign Investment in Nigeria : Merits and Demerits - Adedapo Yusuf Adedamola

On Today's Leaders Forum, praise 2019 presentation in the ongoing anniversary, VAM News reports.

 

Adedapo Yusuf Adedamola 

On this note I thank the convener and co anchor for given me the opportunity to learn and relearn on this platform day by day. 

I thank comrade Democrat who gave me the opportunity to be among great scholars on this platform who uses  brain before mouth. 

Straight to the knowledge of the day:

        "Foreign Investment in Nigeria : Merits and Demerits"

 As we all know we can't discuss all it takes under this topic but I will try my best to do justice to the best of my ability. 

I will be sharing with you tonight the following key factors:

1. Definition of foreign investment 

2. Effect of foreign investment on economic growth 

3. Advantages of foreign investment 

4. Disadvantages of foreign investment 

And lastly 

5.Conclusion

Definition:

Foreign Investment

Is an investment made by a firm or individual in one country into business interests located in another country. Generally, it takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.

 Effect of Investment on Economic Growth

The importance of investment for economic growth cannot be overstated. The relationship between investment, economic growth seem obvious, but they are all dependent on the market conditions and the expected economic performance .

 

Growth begets growth, Investment leads to increased productivity and thus to economic growth, which returns money back to the beginning of the cycle. However, if this balance upset it will disrupt the cycle and slow down the growth.

Slowed growth does not necessarily mean movement into the negative. For example, slowing economic growth will also slow the rate of inflation, allowing money to carry more value than expected. It also slows down the use of natural resources and utilities and allows space for alternative technologies that may not have been feasible before.

ADVANTAGES/MERITS

Foreign investments will provide some great advantages both for the citizens and for the country where the investment is made. On the other hand, sometimes the deal can work out better for the country depending upon how the investment is laid.

 I. Access to markets

It can be an effective way for citizens to enter into a foreign market. 

II. Access to resources

Its also an effective way for citizens and the country to acquire important natural resources. 

III. Reduces cost of production

Its means the investors will have to reduce the cost of production if the labor market is cheaper and the regulations are less restrictive in target of foreign market.

 IV. Source of Revenue

Its offers a source of external capital and increased revenue. It can be a tremendous source of external capital for a developing country, which can lead to economic development.

V. It will result in new jobs and foreign money being pumped into the economy.  

VI. Development of new industries in the country.

 DISADVANTAGES/DEMERITS

 I. Strategic Industries

Many countries protect certain strategic industries, like defense, from foreign investment to maintain control from foreign entities.

II. Long-term Capital Movement

 Some critics argue that once a foreign investment becomes profitable, capital really begins to flow out of the host country and to the investor's country.

III. Disruption of Local Industry

There is some concern that foreign investment may disrupt local industry and economies by attracting the best workers and creating income disparity.

 IV. Hindrance to Domestic Investment

As it focuses its resources elsewhere other than the investor’s home country, foreign investment can sometimes hinder domestic investment.

V. Negative Influence on Exchange Rates

 Foreign investments can occasionally affect exchange rates to the advantage of one country and the detriment of another.

 

Conclusion

Remember that we live in an increasingly globalized economy, so foreign investment will become a more accessible option for any country when it comes to business. However, it  should weigh down its advantages and disadvantages first to know if it is the best road to take.

 

Thanks to the convener The one and only African Talking Drum 

Thanks comrade kriss 

Thank you'll for having me

God bless TLF

God bless Ibadan 

God bless Oyo state 

God bless Nigeria 🇳🇬