An examination of determinants of FDI success in Nigeria: A case study of the Nigerian Investment Promotion Commission (2000–2020).
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Background of the study:
Foreign Direct Investment (FDI) plays a crucial role in stimulating economic development, and its success depends on multiple determinants including regulatory frameworks, market potential, and institutional support. The Nigerian Investment Promotion Commission (NIPC) has been at the forefront of efforts to attract and facilitate FDI from 2000 to 2020. The determinants of FDI success encompass factors such as political stability, infrastructural readiness, tax incentives, and efficient administrative procedures. In Nigeria, while FDI inflows have increased, the sustainability and effectiveness of these investments remain mixed. Recent analyses suggest that favorable investment climates, robust regulatory reforms, and targeted promotional activities significantly enhance FDI outcomes (Uche, 2023). However, challenges such as bureaucratic delays, inconsistent policy enforcement, and infrastructural deficits continue to impede optimal performance (Chinwe, 2024; Ibrahim, 2025). This study critically examines the determinants that influence FDI success in Nigeria by analyzing the role of the NIPC and identifying areas where policy adjustments can further improve investment outcomes.
Statement of the problem:
Despite ongoing efforts by the NIPC, FDI in Nigeria has not consistently met its potential due to bureaucratic inefficiencies, regulatory uncertainties, and infrastructural shortcomings (Uche, 2023; Chinwe, 2024). These challenges result in a lower rate of successful investment projects and diminished economic benefits. This study aims to identify the key determinants limiting FDI success and suggest measures to overcome these obstacles.
Objectives of the study:
- To identify determinants that affect FDI success.
- To evaluate the role of the NIPC in facilitating FDI.
- To recommend strategies for improving FDI outcomes.
Research questions:
- What are the key determinants of FDI success in Nigeria?
- How effective is the NIPC in promoting FDI?
- What policy measures can enhance FDI success?
Research Hypotheses:
- A favorable regulatory environment positively impacts FDI success.
- Bureaucratic inefficiencies hinder the effectiveness of the NIPC.
- Enhanced infrastructural support increases FDI outcomes.
Significance of the study:
This study is significant as it provides critical insights into the determinants of FDI success in Nigeria, offering guidance to the NIPC and policymakers on enhancing the investment climate. The findings will support strategies to attract and sustain FDI, thereby contributing to economic development and competitiveness (Ibrahim, 2025).
Scope and limitations of the study:
This study is limited to examining determinants of FDI success in Nigeria, focusing on the role of the Nigerian Investment Promotion Commission and related institutional factors.
Definitions of terms:
- FDI Success: The effective attraction and retention of foreign investments that yield economic benefits.
- NIPC: The Nigerian Investment Promotion Commission, responsible for promoting FDI.
- Regulatory Environment: The framework of laws and policies governing business operations.
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