An evaluation of FDI’s role in promoting industrial growth in Nigeria: A case study of the Niger Delta (2000–2020).
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Background of the study:
Foreign Direct Investment (FDI) has been instrumental in catalyzing industrial growth across emerging economies. In the Niger Delta, FDI inflows over the past two decades have been strategically directed toward modernizing industrial processes and expanding manufacturing capabilities. This region, endowed with vast natural resources, has seen a transformation as multinational corporations and local enterprises harness FDI to upgrade technology, enhance production efficiencies, and access global markets. FDI has stimulated job creation, improved infrastructure, and fostered innovation through technology transfer. However, the impact of FDI is not uniformly positive. While some sectors have flourished, others struggle with environmental degradation, regulatory ambiguities, and socio-political challenges that inhibit sustainable growth (Chinwe, 2023). Recent empirical studies suggest that although FDI can boost industrial output and productivity, its effectiveness largely depends on complementary policies and robust institutional frameworks (Oluwaseun, 2023; Ibrahim, 2025). Thus, understanding the precise role of FDI in promoting industrial growth in the Niger Delta is crucial for devising targeted policies that maximize benefits while mitigating adverse impacts.
Statement of the problem:
Despite significant FDI inflows, industrial growth in the Niger Delta has been uneven. Challenges such as weak regulatory oversight, infrastructural deficits, and environmental concerns have limited the full potential of FDI in fostering sustainable industrial development (Chinwe, 2023; Oluwaseun, 2023). These issues create a discrepancy between investment potential and actual industrial performance, highlighting the need for a critical evaluation of FDI’s role and the factors that mediate its impact.
Objectives of the study:
- To evaluate the contribution of FDI to industrial growth in the Niger Delta.
- To identify challenges that limit FDI’s effectiveness in promoting industrial development.
- To propose policy measures to enhance the positive impacts of FDI.
Research questions:
- How has FDI influenced industrial growth in the Niger Delta?
- What are the key challenges impeding FDI’s impact?
- What policy interventions can optimize FDI benefits?
Research Hypotheses:
- FDI has a positive effect on industrial growth in the Niger Delta.
- Infrastructural and regulatory deficiencies hinder FDI’s effectiveness.
- Policy reforms can enhance the role of FDI in industrial development.
Significance of the study:
This study is significant as it explores the multifaceted role of FDI in promoting industrial growth in the Niger Delta. Its findings will provide critical insights for policymakers and investors on optimizing FDI inflows to boost industrial performance. By addressing current challenges and offering evidence-based recommendations, the research aims to foster sustainable industrial development and economic diversification (Ibrahim, 2025).
Scope and limitations of the study:
This study is limited to assessing the role of FDI in industrial growth within the Niger Delta, focusing on technological, regulatory, and infrastructural factors.
Definitions of terms:
- Foreign Direct Investment (FDI): Investment made by a firm or individual in one country into business interests located in another country.
- Industrial Growth: An increase in the production capacity and efficiency within the industrial sector.
- Technology Transfer: The process by which technology is shared or disseminated between organizations.
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