Problems and Prospects of Investing in Africa: A Case Study of Nigeria

There is a lack of adequate foreign direct investments (FDI) in the emerging markets of West Africa, especially in Nigeria. The purpose of this study was to examine the factors that have led to inadequate FDI in Nigeria. Using the political risk model as the theoretical base, this study investigated why the country continued to suffer from dwindling FDI despite post-1999 economic reforms. The research questions for the study examined the major constraints to FDI inflow into the country before and after the 1999 economic reforms and the strategies for addressing this problem. Using the case study research method, data were collected from 32 executives of multinational corporations in Nigeria as well as from documents related to FDI in Nigeria. The data from these sources were analyzed using 2 main approaches: thematic analysis and percentage analysis. According to study findings, corruption is the main cause of dwindling FDI in Nigeria: Problems such as political instability, poor infrastructure, lack of adequate investor protection, crime and other related issues which discourage FDI inflow into Nigeria all resulted from institutionalized corruption. This study will lead to positive social change in Nigeria by attracting FDI, creating jobs, and reducing poverty in the economy. In addition, other West African countries with similar issues can benchmark the Nigerian model to improve their countries' investment climates, attract FDI, create jobs, and reduce the levels of poverty in their domains.