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The SAP research study on foreign investment in Nigeria focuses on the intervened levels of foreign investment in Nigeria during the SAP period. In other words, the focus of this research is on the impact. Foreign investment has expanded as part of the structural adjustment agenda.

It outlined a number of objectives, including: an assessment of the changes that have occurred in the Nigerian economy as a result of SAP in relation to foreign investment, ascertainment of the impact of those of foreign investment in Nigeria under SAP to know of the change are in the direction anticipated by the government;

to envision new adjustments in SAP policies and offer recommendations or suggestions that will entrance the realisation of the goal of attracting more for SAP. Three hypotheses were developed in order to guide the research:

1. Nigeria’s cross-border product has a favourable link with higher levels of foreign investment in Nigeria during SAP.

2. During SAP, Nigeria’s balance of payment (BOP) did not rise in proportion to the growing levels of foreign investment in the country.

3. The value of the Naira did not rise as a result of increased foreign investment in Nigeria under SAP.

4. The technique used in the write-up includes data derived from both primary and secondary sources. These data were subjected to regression analysis. The study then discovered that Nigeria’s GDP has increased levels of foreign investment during SAP;

Nigeria’s Bop position has not increased proportionately with the increase level of foreign investment in Nigeria under SAP; and the value of the Naira has not appreciated as a result of the increase level of foreign investment in Nigeria under SAP.

The study discovered that, despite SAP being anti-importation of goods from abroad, imports rose higher during SAP than before SAP, causing the BOP position to worsen even further.

The SAP policy repatriation was faulted by the study because it allowed foreign companies to repatriate most of their capital / profit, which would have served as foreign exchange for the country,

thereby increasing the supply of foreign exchange and increasing the value of the Naira as a r Foreign investment should be encouraged seriously in order to reduce imports and achieve a more stable balance of payment;

foreign investors should be required to use the majority of their profits to provide infrastructure that will attract foreign investment in the country; and the government’s exchange policy should be reviewed in order to fall within fixed limits rather than being left floating for the forces of demand and supply to determine.

5. The study found that foreign investment in Nigeria has a bright future and that foreign investment will expand significantly in the post-SAP period. If the government takes the recommendations seriously, foreign investment will have a stronger impact on the Nigerian economy during the SAP period.


According to the Central Bank of Nigeria’s annual report, the Nigerian economy performed worse in the 1980s than it did in the 1970s. The performance of the oil sector was responsible for much of the increase in both times. Oil output stood at 558 million barrels in 1970, rising to 823 million barrels by 1973. Between 1975 and 1985, daily oil output averaged between 1.8 and 2.3 million barrels.

With the huge spike in oil prices in 1973 and 1974, oil accounted for 31.9% of real GDP growth and has since continued to dominate economic performance in Niger.

Despite the policy’s goal of converting oil revenue into directly productive structures and promoting long-term development possibilities, the imperatives and political pressure to spend resulted in insurmountable waste and an oil boom in construction activities.

The rise in the exchange rate for oil also provided negative protection to agriculture, eroding its importance in the economy from around 40% of the gross domestic product in the early 1970’s to the 1980’s.

Food imports increased dramatically from 200,000 lorus in the 1960s to 399,000 tonnes in 1974, reaching a peak of 2,441,000 lorus in 1981.

Due to a scarcity of foreign exchange, raw materials, and spare parts, most industries’ capacity utilisation was less than 20% by 1985. Inflation has also reached unacceptably high levels. When the previous administration in Nigeria (the Babangida Administration) came to power in August 1985,

it took a critical look at the magnitude of the nation’s economic problems, and in July 1986, it adopted a programme known as the Structural Adjustment Programme (SAP) as a means of addressing these preambles.

This included, among other things, diversifying the economy to make it more resilient to foreign factors. In order to create a realistic exchange rate for the naira, the import licencing system was abolished and the inter-bank foreign exchange system was introduced in September 1986.

Foreign commodities were abolished, and major government subsidies, such as telephones and electricity, were either withdrawn or splashed through commercialisation and privatisation.

In general, market forces in resource allocation have largely superseded administrative controls. Public investments in government-owned firms were largely reduced, and in other circumstances, such companies were completely privatised. Except for a few critical businesses like petroleum liquefied natural gas (LMG) and petroleum chemicals.

Instead, the government has decided to focus on the provision and improvement of basic infrastructure such as roads, water supply, telecommunications, and electricity. The overarching purpose of the economic adjustment is to efficiently allocate resources and restore the economy to its former grandeur.

It aims to shift rescues from the public to the private sector so that it can become more productive and thus become the economic foundation of Nigeria’s economy (Ayaji, 1990). Foreign investments are those owned by individuals and corporate bodies from countries other than the host.

The structural adjustment programme is a collection of policies implemented in the intention of revitalising an ailing economy. The most important feature of the structural adjustment strategy in terms of foreign investment is the deregulation of the currency rate and the liberalisation of the procedure for the registration of foreign businesses in Nigeria. Although the exchange control act was passed in 1962, it was not widely enforced until the civil war began in 1967.

According to the 1968 Act, foreign investors must get a business authorization as well as a permit to employ foreigners. The Enterprise Promotion Decrease of 1977 restricted foreign equity involvement in local firms based on their schedule or category into which such enterprises fall.

However, with the implementation of the Structural Adjustment Programme, the majority of the regulations were made public. Foreign investors were free to seek and receive licences coordination committee (IDCC), bring in their cash, and repatriate their earnings.


The study’s aims are based on the changes that occurred in the Nigerian economy during the structural adjustment programme in terms of foreign investment, as well as the impact of those changes. On the economy, as well as an assessment of foreign investment in Nigeria under the structural changes expected by the planning authorities.

It also plans to make changes to SAP policies and make recommendations to help Nigeria achieve its aim of attracting more foreign investment. The study also investigates the relationship between the following:

1. Foreign direct investment and gross domestic product (GDP).

2. Foreign investment and the value of Nigeria (N) It is envisaged that the aforementioned study objectives will be met at the conclusion of the study through hypothesis creation and testing.

3. Foreign investment and the balance of payments.


For some time now, the influence of foreign investment on the national economy has been a hot topic in the news, business, and academia. The importance of foreign investments in the economy overstates the need to investigate the effects of the degree of foreign investment on the economy.

This work will be very useful to policymakers who are looking for ways to evaluate the success of aid in the policy monitoring and control process. In advance or in the future, research and students will find study and an important reference.


It is often assumed that an economy’s degree of productivity is determined by its stock capital and level of technology. As a result, many countries, particularly third-world countries, pursue a strict industrial policy in order to raise their citizens’ level of living.

This is accomplished in two ways: by directly participating in individual activities and by providing infrastructure for others to invest in.

They choose the latter alternative due to a lack of finance in third-world nations such as Nigeria. They allow both foreign and domestic investors to participate in the economy. One of the major tenets of the structural adjustment project has been recruiting foreign and domestic investors.

This study is intended to investigate “the impact of these foreign investments on Nigeria’s economy under the structural adjustment programme.”


The following hypothesis has been developed as the foundation for this research:

1: The rise in foreign investment throughout the SAP period has a favourable link with Nigeria’s gross domestic product.

2: The rise in foreign investments throughout the SAP period has a negative link with Nigeria’s gross domestic product.

3: The Naira’s value has not declined as a result of increased foreign investment.


This study focuses on the levels of foreign investment in Nigeria and how the GDP, BOP, and Naira currency rate respond to increases in foreign investment from 1984 to 1992 (9 years).

The structural adjustment initiative is receiving the most attention. The study’s drawback is that it only covers the period in which information is accessible from the Central Bank of Nigeria (CBN).

For example, because SAP terminated in 1993, information on foreign investment in terms of GDP and balance of payment positions was not readily available for 1993.


Investment is the process of putting one’s money or resources into projects or assets (whether tangible or financial) in order to increase one’s wealth.

Foreign Investment: Foreign investments are those that are owned by individuals and corporate bodies from countries other than the host country; for example, businesses in which foreigners own 100% of the stock can be considered foreign investments (Alphonsus, 1991).

Gross Domestic Product (GDP): The gross domestic product (GDP) is the total worth of all products and services generated in a country over the course of a year. The gross national product is calculated by adding the net income from abroad to the gross domestic product.

Balance of payment: – A country’s balance of payment is a record of all economic transactions involving countries throughout the world in any given period, typically one calendar year.

Currency Exchange Rate: – The price of one unit of a foreign currency in terms of one unit of the local currency is defined as the foreign exchange rate.

The Nigerian naira to British pound sterling conversion rate is the number of naira necessary to purchase one pound of starling. 1992 (Ewa udu and G.A. Agu).

Private Sector: – The private sector is defined as the component of the economy owned and operated by individuals, with no government ownership.

Mutt National corporation: – This is a foreign corporation with subsidiaries in other international investments. Mutt National Company primarily manages its local subsidiaries (WESTOM, 1984).

Exchange rate depreciation: This is the decrease in the value of a country’s currency in relation to the currency of another country or countries.

It entails a country’s currency sinking to a specified level, which is always done by the country’s or countries’ Central Bank in order to fix their economic balances.

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