Foreign private investment in Nigeria -1991

Abstract

In 1991, the netflow of foreign private investment recorded a remarkable increase, reversing the series of net capital outflows during the last two consecutive years. It was believed that this dramatic turnaround was attributable to the renewed confidence of foreign investors in the economy as the incentives accruing from the deregulation of the economy and gradual improvement in the political climate during the review period were becoming apparent. The increase in foreign investment reflected flaws from unremitted profits, changes in foreign share capital, and trade and suppliers credit. Foreign investment from those sources exceeded the capital outflaws due to the liabilities of the companies to their head offices and other foreign liabilities to the extent that a substantial surplus was recorded during the review period. The survey also showed that, on a sectoral basis, the bulk of the investment went to manufacturing and processing, and building and construction sub-sectors. However, huge outpayments were made by companies of U.S.A. origin in settlement of indebtedness due to suppliers, thereby reducing their stocks to their parent companies or affiliates.