THE ROLE OF MULTINATIONAL CORPORATIONS IN THE ECONOMIC DEVELOPMENT OF NIGERIA

ABSTRACT

Generally,  policies  and  strategies  of  Nigerian  Government  towards foreign direct investments are shaped by two principal objectives of desire for economic independence and the demand for economic development. Multinational corporations are expected to bring into Nigeria, foreign capital in the form of technical skills, entrepreneurship, and  technology  and  investment  fund  to  boost  economic  activities thereby, raising standard of living of Nigerians. The main objectives in this  project work relate to understanding the effects and impact of foreign direct investments on the Nigerian economy as well as our ability to attract adequate funds, sufficient enough to accelerate the pace of our economic growth and development. From the study, it was found out that multinational companies play positive roles on the economic development of our nation ranging from helping in greater availability of products for local consumers which is an index of high standard of living, balance of payment, employment etc. From the study, it was revealed that multinational corporations are highly adaptive social agents and therefore, the degree at which they can help in improving economic activities through foreign direct investment will be heavily influenced by the  policy  choice  of  the  host  country.  Primary  data  were  collected through the administration of questionnaire to staff of Unilever Plc. Pz industries and some members of the public. In order to analyze the data, the statistical method of chi-square calculation was used. Tables were  produced  in  order  to  create  a  better  understanding  of  the responses from the respondents. The study thus suggest that in order to further improve the economic climate for foreign direct investment in Nigeria, the government must appreciate the fact that the basic issue should be the encouragement of domestic investors first before going after foreign investors.

CHAPTER ONE

1.0   INTRODUCTION

1.1   Background of Study

Nothing  bothers  national  leaders  more  than  the  thought  of economic development as revealed by the available literature on world history. Hence, outstanding world leaders are always formulating and carrying out policies aimed at economic development of that nation. No prospect is more alluring to nation leaders than the thought of bringing in business to develop their nation’s economy.

Fleetwood in Ngige (2009) feels that most people would despise

“the pains that are taken in making collection of so many things as the price of wheat and oats. Mean things have however assumed dignity as they increasingly contributed to the economic power of the state. During the first three decades of the 20th  century, the development of the Nigerian  economy  was  shaped  primarily  by  Nigerian  farmers’  and traders’ response to changing conditions in national markets. Trading and Agriculture were the major economic activities. Apart from handcraft and mining, there was practical no industrial production in Nigeria (Ahmed, 1993). The government played a conservative and essentially passive role in the economy.   Except for a few major budget and trying not to interfere with the market system.

In 1950’s according to Bhatta Ohary et al (1997) witnessed the beginning of industrial development and the increasing government participation  in  nearly  all  sectors  of  the  economy,  Development  in Nigeria could not possibly be so rapid if we have to depend solely on the internel building up of capital. In fact, the economic development found in  Africa  today  is  the  result  of  capital  imported  from  Europe  and America, surplus capital produced by industries elsewhere are brought in to develop Africa.

The development of  modern nation according to Imaga E.U.L. (1980) depends so much on the transformational spread from the technological activities of multinational corporations. The economic roles of multinational corporations (MNCs) include channeling physical and financial capital to countries with capital shortages. As a consequence, wealth is created, new tax revenues arises, the MNC generated income, allowing developing countries to improve their infrastructures and strengthen  their human capital.

1.2   Statement of Problem

The   role   of   multinational   corporations   in   the   economic development of their host countries especially in underdeveloped countries have been a subject of divergent views, sometimes due to the bias that people already have about their activities especially to Nigeria.

The multinationals have been seen as agents of neo-colonialism especially those that originates from the US. According to Funsho K. (1995).  American  Multinationals  not  only  work  to  advance  their individual interest but also are vehicles for the advancement and consolidation of America’s political interest in countries where they operate.

Anti proponents of foreign direct investment like Funsho opine that the most powerful obstacle to the development of developing countries came from the way they are joined to their international system. From this, we can deduce some of the problems which we will try to ascertain in this study.

1.3 Research Questions

Based on the statement of research problems, this study will seek answers to:

i.      To  what  extent  do  MNCs  transfer  technologies  to  developing

countries that result in mass unemployment

ii.     To what extent do MNCs monopolize the market rather than inject new capital

iii.     Do multinational corporations displace rather than generate local

businesses.

iv.     To  what  extent  do  they  ameliorate  the  country’s  balance  of payment?

These challenging questions and related issues constitute the underlying platform for this work. The researcher intends to extensively explore the issues as basis for assessing the impact of multinational corporations in economic development of Nigeria.

1.4 Objectives of the Study

Consistent with the research problems and questions, this research evaluates the impact of multinational corporations towards economic development in Nigeria. Accordingly, the study set out to achieve the following objectives:

i.    To ascertain whether or not transfer of technologies by MNCs result in mass unemployment.

ii.    To ascertain whether or not MNCs monopolize rather than inject new capital resources

iii.    To determine to what extent MNCs displace rather than generate local businesses

iv.    To  determine if true or false that MNCs worsen the country’s balance of payment.

1.5    Statement of Research Hypotheses

Arising from the statement of problems, the research questions and the research objectives, the following null hypothesis are hereunder formulated for the study:

a) Transfer of technologies by MNCs result In mass unemployment b) MNCs monopolize rather than inject new capital resources

c) MNCs displace rather than generate local business d) MNCs worsen the country’s balance of payment

1.6   Significance of the Study

1. The study will expose the readers to a more understanding of the effects  and impacts  of  foreign  direct investment on  the  Nigerian economy.

2. The study will reveal how multinational corporations can make or take

the  right  decision  as  it  concerns  balancing  their  activities  to accommodate the aspirations of the host countries.

3. The study on completion will enrich existing literature on MNCs and their impact towards economic development of host nations.

4. It will empirically suggest ways for ensuring effective operational decisions by MNCs.

5. The study will provide information to guide future researchers.

1.7   Scope of the Study

The study of the multinational corporations and its impact on the society could cover a broad scope as their activities carry along with them a multiplier effect that affects all facets of human existence. This study focused on the -role of multinational corporations in the development of Nigerian economy with major emphasis on Unilever and PZ  Nig Pic.

1.8   Limitations of the Study

One major limitation of  this  study was finance as Logistics or transportation during sourcing of data was enormous.

The second limitation was associated with data generation. There was a low response as well as non-return of questionnaires.

Also,  getting  statistical  data  from  various  relevant publications

posed some difficulties.

The availability of local literature on the role of multinationals was insufficient and as such foreign data constituted the majority of the volume of the materials used in the review of the literature.

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