CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Nigeria emerged from the colonial experience with an economy structured in accordance with the imperators of colonial economic relationship. The first National Development plan of (1963) was launched with the objectives of providing the framework for industrial take off and development.  However, as the foreign investors were apprehensive of the nascent independent administration, efforts were made not only to alloy their fears of nationalism but also to attract more foreign investments through joint ventures with regional government then or the federal government.  The first development plan as an open door regime saw an increase in the establishment of miscellaneous foreign enterprises in Nigeria, many of which are unincorporated branches of their overseas business.

Foreign Direct Investment (FDI) refers to a movement of capital that involves ownership and control of a firm in another country for instance, the purchase of common chores in a Nigerian incorporated company by a French citizen involves ownership and an element of control.

HISTORICAL BACKGROUND OF NIGERIA BOTTLING COMPANY.

The Nigeria Bottling Company Plc, (NC) was incorporated in November 1951, as a subsidiary of A.G levent’s group with the franchise to bottle and sell coca-cola product in Nigeria. From a humble beginning as a family business, the company has grown to become predominant rattler of non-alcoholic beverages in Nigeria responsible for the manufacture and sale of over 33 different coca-cola brands. Other popular brands of beverages produce by the company are Eva water, five where fruit juice, and the newly introduced burn energy drink. The company presently has 13 bottling facilities and over 80 distribution warehouse located across the country.

1.2   STATEMENT OF PROBLEM

The undeveloped countries like Nigeria suffer not only from low income and unstable growth, but also from regional disequilibrium, economic instability unemployment, depending on foreign countries, specialization in the production of raw materials and economic, social, political and cultural marginality.

Underdevelopment is an element in the process of development of the international system underdevelopment and developments are two facts of a single process of which both internal and international structures are causes.  International treacle brings about polarization because the low income countries are assigned the production of primary production (raw materials) which are processed in the home countries because of worsening and unstable terms of trade, because the economics of the low income countries lack the force work force, the entrepreneurship and physical/institutional infrastructure to seize export opportunities and because of generally monopolistic arrangement by which profits flow out from the underdeveloped countries to the developed.

Because the NNC’s tend to come from the developed countries and because their operations tend to add to host countries production, MNC’S presumably improves the distribution of income, goods and services between the richer and poorer countries.

Within the host societies however, it is guide different to judge whether a direct investment project improves or aggravates these income, goods and service distribution.

The literature critical of MNC’s demonstrates that Foreign Direct Investment (FDI) after do not help the economic life of cost societies, do not improve their well being hence not benefiting lower income people Very well.

In Nigeria for unsnarl, there is that popular and commonly held view that manufacturing multinationals have done greater lower than good to the host communities as a result of their operations in these communities wheel has led to loss of economic and social quality and environmental degradation.  It is not out of place for one to say that these MNC’s have threatenical the health of the indigenes by the use of dangerous chemical, pollutants etc.  These and more are the problems that will be looked into which necessitated this research work.  It will try to examine the nature and pattern of foreign direct investment that is International Corporation in Nigeria manufacturing rector with a particular reference to Nigerian Bottling Company Plc as a case study.

1.3   PURPOSE OF THE STUDY

1. To determine the Nigerians drive benefit from multinational corporation in term of transaction and entrepreneurial.
2. To determine if multinational corporation contribute to the growth of gross domestic product (GDP) in the Nigeria economy.
3. To determine of Multinational Corporation help in solving balance of payment problem in the Nigerian Economy.

1.4   RESEARCH QUESTIONS

1. Do Nigerians drive benefit from multinational corporation in term of transaction and entrepreneurial?
2. Does multinational corporations contribute to the growth of gross domestic product (GDP) in the Nigeria economy.
3. Does Multinational Corporation help in solving balance of payment problem in the Nigerian Economy.
4. What impact does entrepreneurial make in the economy?
5. How did Multinational Corporation maintains cordial relationship with in the host society.
   • SIGNIFICANCE OF THE STUDY

The finding of this study will be of great significance to both the students and staff and indeed, every body that has a stake in the affairs and proceedings in Federal Polytechnic, Oko.

This is because the recommendation of this study will prefer sustainable investment on the Nigeria economy. Moreover, the study will go along ways in revealing to industrialists, the practical ways to invest.

Finally, the out come of this research will be an asset to environmental researcher and planners for effective planning and management of foreign direct investment on the Nigeria economy.

1.6    SCOPE OF THE STUDY

The study was dehunted to appraising on the impact of foreign direct investment. In the Nigeria economy, and this research work places premium on the critical evaluation and examination of the impact of foreign direct investment (MNC) activities in the Nigerian economy using Enugu zone which compress. Enugu North, Enugu south, Enugu East and 9^th mile corner on a bench mark; the prospective here is primarily managerial and economic and it focuses on the important part in the overall evaluation. Furthermore, it is outside the scope of this work to discuss the consequences of foreign Direct (Investment (FDI) for the investor nations.

1.7 DEFINITION OF TERMS

1. Foreign Direct Investment: This is the existence of controlling ownership by a firm from one country over a firm in another country through new investments or acquisition.
2. Multination Corporations: A corporation with multi-country affiliates, each of which formulates its own business strategy based on perceived market differences
3. Developing Countries: Developing countries are those for which some reasons have backwardness in developing their economic resources with the attendant result that their people have a lower standard of living than that enjoyed in the more advanced countries of Europe and America (Handson 1979:128).  They are also called third world countries.

The following characteristics are common among developing countries low per capital income, population explosion, high rate of illiteracy, technological backwardness, prevalence of hunger and disease, under utilization of factors of production and the existence of traditional institutions (management in Nigeria; 20^th April 1984:31).

Other features of under development include: poverty, sky rocketing inflation, environmental ravages, low industries base, political instability and the domination of military, infrastructural inadequacies, trade and balance of payment problems and debt crisis (Onuoha, 1993:53-84).

4. Balance of Payment: Refers to a systematic record of all transaction between the residents of the reporting country (Nigeria in this case) and residents of foreign countries during a given period of time usually one year.
5. Employment: By employment, we mean the state of being gainfully engaged by a multinational corporation.
6. Social Responsibility: This is the ethical measures taken by a corporation to see that its activities is not harmful to the lives and properties of host communities.  It can also be economic, legal or discretionary measures desired from the corporation by their communities.

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