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The study of the nature involves a lot of deep research and understanding of the factors, which creates the effects on the subject matter. Primarily, these factors were more economical than managerial as the case may be, on the understanding that this research work is being casual out under a management setting or department. Just as the subject matter is, the impact of foreign direct investment on the Nigerian Economy with a case study of Nigerian Bottling Company Plc, it is based on the economic, social and entrepreneurial impacts created by these multinational companies like NBC Plc on their host societies. Based on this, the objective of this study was to determine through quantitative and quantitative measures whether the benefits of multinational enterprises (MNE’S) out weigh the cost that results from their activities in the hose countries. The first chapter of this work contains a general discussion (i.e. critics and defense) of FSI’s activities in host countries. Further the statement of the research problem was studied and the need for the study. The scope and limitation to the research work was finally looked into with the stated hypothesis which guides the researcher in his evaluations. In chapter two, a number of part related literatures were examined as it relates to the impact of foreign direct investment to Nigeria as the case may be with particular reference to NBC Plc activities in Enugu Zone. Chapter three treated the design of the study, the method of collecting data and the ways in which the questionnaires were distributed within the chosen population. The data gathered from the research were analyzed and interpreted in chapter four of this research report. Finally, the summary of findings, conclusions on the research work and recommendations were given by the researcher all in chapter five. It is believed that these recommendations made in this study will help both the multinationals in their relationship with their host communities as well as creating an enabling environment from the host country for their business to there.


Title page                                                                                ii

Certification                                                                            iii

Dedication                                                                               iv

Acknowledgment                                                                     v

Abstract                                                                                  vi

Table of contents                                                                     vii

CHAPTER ONE                                                                            


1.1 Background of the study                                                   1

1.2 Statement of the problem                                                  5

1.3 Objective of the study                                                       6

1.4 Research questions                                                            7

1.5 Statement of hypotheses                                                   7

1.6 Significance of the study                                                   8

1.7 Scope to the study                                                             9

1.8 Limitation of the study                                                      9

1.9 Definition of terms                                                            10

1.10 Historical profile of Nigerian Bottling Company            11



2.1 Introduction                                                                      15

2.2 Overview of foreign direct investment                              15

2.3 Foreign director investment and the Nigeria economy      18

2.4 Trends of foreign direct investment                                   19

2.5 The FDI-growth relation in Nigeria                                   27

2.6 Impact of foreign direct investment on
Nigeria economic growth                                                         31

2.7 Negative effect of FDI                                                       35

2.8 Challenges of foreign direct investment in

Nigeria economy                                                            37

2.9 Government policies on FDI                                             40



3.1 Introduction                                                                      42

3.2 Population of the study                                                    42

3.3 Sample size and sample techniques                                   42

3.4 source of data collection

3.5 Validity and reliability of the study                                   43

3.6 Tools for data collection                                                    43

3.7 Tool for data analysis                                                                 45

3.8 Statistical Tools for Data Analysis                                   45

3.7 justification                                                                       47



4.1 Presentation of result                                                                  48

4.2 Interpretation of result                                                      49

4.3 Test of hypothesis                                                            54



5.1 Summary of findings                                                                  56

5.2 Conclusion                                                                        57

5.3 Recommendation                                                               57

References                                                                               59

Appendix I                                                                              62




The foreign direct investor may acquire 10% or more of the voting power of an enterprise in an economy through; incorporating a wholly owned subsidiary or company, acquiring shares in an associated enterprise, through merger or an unrelated enterprise and, participating in an equity joint venture with another investor. Foreign direct investment incentives may be in form of low corporate and income tax rates, tax holidays, other types of tax concessions, preferential tariffs, special economic zones, investment financial subsidies, soft loan or loan

guarantees, free land or land subsidies, relocation and expatriation subsidies, job training and employment subsidies, infrastructure subsidies, research and development support and derogation from regulations, usually for very large projects (Obadan, 2004).

Attempts at attracting FDI into Nigerian economy have been based on the need to maximize the potential benefits derived from them; and to minimize the negative effects their operations could impose on the country. As a result of the persistent global panic, unemployment has been on the rise, jobs are being lost, there is shortage of liquidity and acute scarcity of credit has remained visible in the financial institutions. For Nigeria to generate more foreign direct investment, efforts should be made at solving problems of government involvement in business; relative closed economy; corruption; weak public institutions; and poor external image.

Nigeria is one of the economies with great demand for goods and services and has attracted some FDI over the years. According to CBN (2006), the amount of FDI inflow into Nigeria reached US$2.3 billion in 2003 and it rose to US$5.31 billion in 2004 (138% increase) this figure rose again to US$9.92 billion (87% increase)

in 2005. The banking reform engendered the interest of foreign banks in the Nigerian market making foreign direct investment (FDI) into Nigeria grew by 134% to N1.123 trillion (US$9.6 billion) in 2007. Out of a total US$36 billion of FDI that went into Africa, Nigeria received 26.66% of the inflow. The Vanguard Newspaper of May 19, 2008, reported that a total of US$12.5 billion of foreign investment inflow was recorded in the economy at the end of 2007, and that this was an indication that “Nigeria is a beautiful bride for foreign investors”. This has not also been so, however.

In Nigeria, FDI is defined as an investment undertaken by an enterprise that is either wholly or partly foreign-owned. The Investment Code that created the Nigerian Investment Promotion Commission (NIPC) (Decree No. 16 of 1995) and the Foreign Exchange (Monitoring and Miscellaneous Provision) Decree, also

enacted in 1995, gives full backing for FDI in Nigeria. Nigeria has a high potential to attract significant foreign private investment inflow. Most countries strive to attract FDI because of its acknowledged advantages as a tool of economic development. Africa and Nigeria in particular, joined the rest of the world in seeking FDI as evidenced by the formation of the New Partnership for Africa’s Development (NEPAD), which has the attraction of foreign investment to Africa as a major component. Openness to trade and available human capital, however, are not FDI inducing. FDI in Nigeria contributes positively to economic growth. Although the overall effect of FDI on economic growth may not be significant, the components of FDI do have a positive impact. The FDI in the ICT sector has the highest potential to grow the economy and is in multiples of that of the oil sector.

Foreign Direct Investment (FDI) refers to a movement of capital that involves ownership and control of a firm inanother country for instance, the purchase of common chores in a Nigerian incorporated company by a French citizen involves ownership and an element of control.  This is because all shares in an organization have same voting rights.

For the purpose of this classification such is recorded as FDI if the share acquired involves more than 10% of the outstanding common shares of the Nigerian company.

In this research and generally, Foreign Direct Investment is classified in the context of Multinational Corporations (MNC).  The MNC is sometimes referred to as Multinational Enterprises (MNE) is Transnational Corporations (TNC) or Transnational Enterprises (TNE).

According to the chairman of BOD’s of Chemical Co, a multinational form in the united state origin “the emergence of a world economy and the multinational corporation have been accomplished land in land”.  He sees multinational enterprises moving towards what he called “a global company”, a firm that have no nationality but belongs to almost all countries.


The undeveloped countries like Nigeria suffer not only from low income and unstable growth, but also from regional disequilibrium, economic instability unemployment, depending on foreign countries, specialization in the production of raw materials and economic, social, political and cultural marginality.

Underdevelopment is an element in the process of development of the international system underdevelopment and developments are two facts of a single process of which both internal and international structures are causes. International treacle brings about polarization because the low income countries are assigned the production of primary production (raw materials) which are processed in the home countries because of worsening and unstable terms of trade, because the economics of the low income countries lack the force work force, the entrepreneurship and physical/institutional infrastructure to seize export opportunities and because of generally monopolistic arrangement by which profits flow out from the underdeveloped countries to the developed.

In Nigeria for unsnarl, there is that popular and commonly held view that manufacturing multinationals have done greater lower than good to the host communities as a result of their operations in these communities wheel has led to loss of economic and social quality and environmental degradation.  It is not out of place for one to say that these MNC’s have threatenical the health of the indigenes by the use of dangerous chemical, pollutants etc.  These and more are the problems that will be looked into which necessitated this research work.  It will try to examine the nature and pattern of foreign direct investment that is International Corporation in Nigeria manufacturing rector with a particular reference to Nigerian Bottling Company Plc as a case study.


1.    To determine the Nigerians drive benefit from multinational corporation in term of transaction and entrepreneurial.

2.    To determine if multinational corporation contribute to the growth of gross domestic product (GDP) in the Nigeria economy.

3.    To determine of Multinational Corporation help in solving balance of payment problem in the Nigerian Economy.

4.    To determine if multinational corporation maintains cordial relationship with in the host society.


1.    Do Nigerians derive benefit from multinational corporation in term of transaction and entrepreneurial?

2.    Does multinational corporations contribute to the growth of gross domestic product (GDP) in the Nigeria economy?

3.    Can Multinational Corporation help in solving balance of payment problem in the Nigerian Economy?

4.    What impact does entrepreneurial make in the economy?

5.    How did Multinational Corporation maintain cordial relationship with in the host society?



Ho: Multinational corporations do not contribute to the growth of gross domestic product (GDP) in the Nigeria economy.

Hi: Multinational corporations contribute to the growth of gross domestic product (GDP) in the Nigeria economy.


Ho: Multinational Corporation do not help in solving balance of payment problem in the Nigerian Economy.

Hi: Multinational Corporation help in solving balance of payment problem in the Nigerian Economy.


Foreign Direct Investment (FDI) analysis is clouded by a lot of controversy, variety of interpretation and numerous emotive value judgments.  This recreant opinion about the activities of MNC’s in the developing countries is as typical as the topic itself.  Owing to the divergent opinions that exist, it would be practically impossible to give a total survey of the current debate on the topic.

However, this work will make positive efforts to extract in favour of or against MNC’s in developing nations.  Furthermore, it is outside the scope of this work to discuss the consequences of Foreign Direct Investment (FDI) for the investor nations.  The study area in which data were collected for the study is limited to Nigerian Bottling Company, Benin City.


The research will be beneficial to all organizations especially Nigerian Bottling Company and their staff as it emphasized on the impact of Foreign Direct Investment and its impact on the economy in which it operates.

It will help useful the government in way of encouraging foreign investment in the economy.

It will equally be useful to small scale business, large corporations, and universities, college of education and to the researchers.


There is no gain saying that there are no limitations in research work generally. Any shortcoming that arises in this study is as a result of factors which are beyond the researcher’s control.

Therefore, it will be of more importance to highlight certain militating factors that tend to narrow or limit my scope of study. This project research would have been easier if not for these limitating factors:

1.     Time factor: time was not on the researchers to consult various sectors of the economy to review employees or given out questionnaire to various institutions on the effect of government revenue policies.
As we all know, time is never our friend. The time scheduled for the completion of this research thesis was too short. As a result, generating information/data was strenuous as it coincides with final year examination period, which needed attention.

2.     Finance: this is another barrier that limited the researcher’s work.

3.     Available resources: was unavailable for the research work.


VARIABLE: A variable is anything that can take on differing or varying variables. The values can differ at various times for the same object or person, or at same time for different object or person.



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