Document Type:Case Study

Subject Area:Business

Document 1

Nigeria has been the home of some of the world most known scammers and this posed an imminent threat to the FDI thus were discouraged to invest in the country. The political instability was also caused by the inability of the three major tribes which constitutes the 66% of the Nigerian population to work together and also the constant disagreement that existed between the Muslims and the Christians (Mohapatra and Ratha). The presidency seat and any other political seat, during elections were marred by election rigging and the INEC has been under the manipulation of the president so as to maintain his seat, in other terms, elections in Nigeria has been like political auction where the highest bidder gets the seat. Nigeria has been associated with crimes and high rates of corruption; actually it has been ranked as one of the most corrupt country in the whole world.

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These factors has threatened the peace of the inhabitants and scared of the FDI for a very long time (Mohapatra and Ratha). Other advantages include injecting capital into the Nigerian businesses with growth prospects, reduces effects of bribery, cronyism and politics and also their goods and service reaches the market faster without a lot of restrictions. The FDI also benefits the individual investors who receive some benefits at lower risks. They also play a major role in elevating the living standard of the Nigerians. It also offsets the volatility that is created by the “hot money”. This normally happens when asset bubble is created by the short term lenders or currency traders who inject a lot of money into the economy all at once and make some fast selling that result in the creation of a boom-bust-cycle hence ruing the Nigerian economy and ending the political regimes.

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Should this be of concern to potential foreign investors, most of who invest in the country’s populated southern regions? Businesses require peaceful environments for the m to thrive and to continue attracting investors. When the businesses environment is under attack by the insurgency then most investors fall back because the motives of the insurgency is basically to destabilize the government by whatever means necessary. If foreign direct investments are threatened then the economy of Nigeria is threatened too, this makes the FDI targets of the vicious insurgency thus they should be afraid irrespective of their area of operation (Aliyu). Imagine that you work for a large consumer products company selling basic household goods. List the pros and cons of investing in Nigeria.

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Insecurity from the insurgency group, Boko Haram. They threaten the peaceful environmental for doing business. High costs that are involved in doing the businesses. Despite the challenges that businesses are likely to face in Nigeria, it is still one of the best businesses hub in Africa which I would recommend anytime otherwise it is wise to carry out the feasibility study about the Nigerian market before investing especially on the Northern region which is always under the constant attack of the insurgent group. I’d advice that one should put his/her investments on the Southern parts of Nigeria which is highly populated (Twomey). Analysis of Foreign Private Investment in Nigeria. LAP LAMBERT Academic Publishing, 2015. Ilesanmi, Olu O. Foreign Direct Investment in Nigeria: A Handbook to Survival.

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