An evaluation of foreign direct investment’s role in technology transfer in Nigeria: A case study of Abuja Background of the Study
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Foreign direct investment (FDI) is a critical channel for technology transfer, which in turn can drive innovation, productivity, and economic growth. In Nigeria, FDI has played an increasingly important role in bridging the technological gap, particularly in the capital city of Abuja. Between 2000 and 2020, FDI inflows have been directed toward sectors such as telecommunications, manufacturing, and energy, facilitating the introduction of advanced technologies and management practices (Ibrahim, 2023). The influx of foreign capital has not only enhanced the technological capabilities of local firms but has also contributed to capacity-building through skills transfer and knowledge sharing (Chukwuma, 2024). However, the process of technology transfer through FDI is complex and influenced by factors such as absorptive capacity, institutional quality, and regulatory frameworks. Despite the potential benefits, challenges such as limited local innovation ecosystems and inadequate policy support have sometimes constrained the effective absorption of transferred technologies. This study critically examines the role of FDI in facilitating technology transfer in Abuja, assessing both its positive contributions and the barriers to its optimal impact on technological advancement and economic growth (Adeleke, 2025).
Statement of the Problem
While FDI is expected to drive technology transfer and enhance local capabilities, Abuja faces challenges in fully capitalizing on these benefits. Factors such as inadequate infrastructure, limited human capital, and regulatory inconsistencies hinder the effective assimilation of foreign technologies (Ibrahim, 2023). These constraints have led to a suboptimal impact of FDI on technological innovation and productivity improvements in the region (Chukwuma, 2024). The gap between foreign technological inputs and domestic absorption raises concerns about the long-term sustainability of FDI-driven development. This study aims to identify the critical barriers to effective technology transfer through FDI in Abuja and to propose strategies that can enhance its role in fostering local innovation (Adeleke, 2025).
Objectives of the Study
1. To evaluate the role of FDI in technology transfer in Abuja.
2. To identify barriers that limit effective technology absorption.
3. To propose policy measures to enhance technology transfer outcomes.
Research Questions
1. How does FDI contribute to technology transfer in Abuja?
2. What challenges hinder the effective absorption of foreign technologies?
3. What policies can improve the technology transfer process?
Research Hypotheses
1. FDI significantly promotes technology transfer in Abuja.
2. Institutional and infrastructural challenges limit the impact of FDI on technology absorption.
3. Strengthening local innovation ecosystems can enhance technology transfer outcomes.
Significance of the Study (100 words)
This study is significant as it evaluates the role of FDI in driving technology transfer in Abuja, providing insights into how foreign investments can enhance local technological capabilities. The findings will inform policymakers and investors on ways to optimize FDI benefits for technological advancement and economic growth. By addressing barriers to effective technology absorption, the research contributes to strategies that promote sustainable innovation and competitiveness in Nigeria’s economy.
Scope and Limitations of the Study
The study is limited to evaluating FDI’s role in technology transfer in Abuja, focusing on sectors directly affected by foreign investment. It does not cover broader FDI impacts beyond technology transfer.
Definitions of Terms
• Foreign Direct Investment (FDI): Investment by foreign entities in domestic companies or assets.
• Technology Transfer: The process of disseminating technology and knowledge from foreign to local entities.
• Abuja: The capital city of Nigeria, serving as the focus of this study.
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