THE CONTRIBUTION OF MULTINATIONAL COMPANIES ON THE GROWTH OF NIGERIAN ECONOMY

CHAPTER ONE

Introduction

1.1       Background of the Study

This research focuses on the contribution of multinational companies on the growth of Nigeria economy, with specific reference to Coca-Cola Plc Onitsha from 2010- Date. The phenomena of multinational companies are new, they were known  to have existed since the pre-colonial period, but reached its peak in the colonial age and post colonial periods. Nigeria emerged from the colonial experience with an economy structure in accordance with the imperators of colonial economic relationship. As the foreign investors were apprehensive of the nascent independents administration, efforts were made not only to alloy their fear of investment through joining returns with regional government or federal government. The first development as often door regime saw an increase in the establishment of miscellaneous foreign enterprise in Nigeria, many of which are incorporated branches of their oversees business. In this research and generally, foreign direct investment [FDI] is classified in the context of multinational companies (MNCs), the multinational is sometimes referred to as multinational enterprise (MNE). This is global company or firms that have no nationality but belongs to almost all countries. The concept of multinational companies and the growth of Nigeria Economy have remained on the relationship between the multinational and host societies and how growth is appraised in these host societies. They have argued that there have been gross neglect and lack of growth in their communities. It is good to discuss in terms of employment opportunity and transfer of technology and other benefits to the government.

Many multinational company exist in Nigeria economy settings, these encompassed the manufacturing sector like Nigeria Bottling Company (NBC), Construction Sector like Julius Berger Nigeria, Mineral Exploitation like Shell, Nigeria Banking, Diamond-Benz, Bayor, Pfizer, Nestle, PZ Cussons to Mention a few. Indeed, the activities of these multinational companies have vital roles in linking national economy and defining the nature of the emerging global economy. Their supportive and able resources, tangible and intangible which they deploy across national boundaries to pursue profit and blaster their competitive position, augment domestic servicing and provide foreign exchange required for massive investment and infrastructure. It becomes pertinent that the manufacturing sector be given due cognizance for the purpose of the research work. In this sector, the coca-cola Plc Onitsha will be a study.

1.2       Statement of the Problem

The clash between multinational host countries has been most intense in the less developed economies, individual critics and public officials have leveled vociferous charges against the policies of international companies and their alleged negative consequences for the economic well being and development of the host nation. Gilpin (1987: 89). This view promoted the reaction of Omimspode (1982: 258) and to conclude that, there is more myth than reality in the development activities of the multinational companies in Nigeria. He further stated that a thorough empirical analysis of the impact in Nigeria economy and consciousness will reveal the following. This argues that most of the capitals in form of the profits are not invested in the country but sent to the countries of multinational companies for investment, thereby rendering Nigeria industrially undeveloped. The royalties or pittance paid to the line government by these multinational companies cannot because of its meagerness employed into industrial projects. In brief, the multinational companies export abroad the capital that would have been used to develop Nigeria thus distorting the economy and economic growth because the capital needed for development is no longer here in the country but abroad.

Technological backwardness, it is in this area that the multinational companies are regarded as the worst culprit because they play their greater trick imaginable. The multinational companies by way of purporting to help industrialize8 Nigeria create a branch plan economy of small inefficient firms incapable of propelling overall development. The local subsidiaries exist only as enclaves in the host economy rather than as engines of self-reliance and growth. These companies intentionally and deceitfully introduce inappropriate type of technologies that hinder ingenious technologies developments. These multinational companies (MNCs) employ capital intensive productive techniques that cause unemployment. All these prevent the emergence of domestic technologies. In Nigeria, there were so many assorted type of technologies all over the country before the advent of the multinational companies through they were of low scale type. The multinational companies rather than help them grow, knock them off systematically through the introduction of more advanced technologies. They retain the control of the most advanced technology but do not transfer it to Nigeria.

1.3 Research Questions

The following questions were formulated by the researcher to guide the study.

1. To what extent have multinational companies contributed to the growth of Nigerian economy?
2. To what extent has the activities of coca-cola plc Onitsha contributed to the eradication of poverty in the state?

• To what extent has coca-cola plc Onitsha, helped to reduce the level of unemployment in their environment?

1. To what extent has the coca-cola plc Onitsha, been able to enhance the living conditions of the people of the state?

1.4 Purpose of the Study

The main purpose of this research work is to find out the main problems of multinational companies in the economic growth and development.

1. To identify the extent the multinational companies have contributed to the growth of Nigeria economy.
2. To find out the extent the coca-cola plc Onitsha has contributed in the eradication of poverty in the state.

• To ascertain the extent coca-cola plc Onitsha has helped to reduce the level of unemployment in their environment.

1. To determine the extent coca-cola plc Onitsha has been able to enhance the living conditions of people in the state.

1.5 Hypotheses

1. Ho: multinational companies have contributed to the growth of Nigerian economy

 Hi: multinational companies have not contributed to the growth of Nigerian economy.

1. Ho: coca-cola plc Onitsha, has contributed to the eradication of poverty in the state

 Hi: coca-cola plc Onitsha, has not contributed to the eradication of poverty in the state

iii. Ho: coca-cola plc Onitsha has helped to reduce the level of unemployment in the environment.

Hi: coca-cola plc Onitsha has not helped to reduce the level of unemployment in the environment.

1. Ho: coca-cola plc Onitsha has not helped to reduced the level of to enhance the living conditions of the people of the state.

1.6 Significance of the Study

This research work would be of immense significance for the business organization especially multinational companies.

1. This study will help to make some improvement in the multinational companies to the growth of nation’s economy.
2. This research will serve as an encouragement to the entire society to understand the activities and functions of multinational companies.

• However, the research will also help the government to re-structure the relationship with multinational companies.

1.7 Scope of the Study

This study will generalize the effort or the role played by the different multinational companies but will focus attention on coca-cola plc Onitsha, Anambra state to enable the researcher have accurate and careful examination of the study. This study will also go a long way to highlight the parts played by coca-cola plc in multinational companies by studying how they have contributed in the eradication of poverty, reduction of unemployment, enhanced the living conditions of the host country, how they make their profits and how their profits are been utilized, the extend they have transferred their technology to the host country and how they have contributed the growth of the host country’s economy.

1.8  Limitations of the Study

1. The researcher’s inability to gather enough data from the company posed a major problem as the company regards its book and records as so confidential that by releasing it will be detrimental and jeopardy to them because of fear of their competitors.
2. Time constraint: The researcher will simultaneously engage in this study with other academic work which will consequently cut down on the time devoted  for the  researcher   work.
3. Financial constraint: Insufficient  funds tends  to  impede  the  efficiency  of  the researcher in sourcing  for the  relevant materials, literature or information  and in  the  process of data  collection  (internet, questionnaire and  interview)

1.9   Operationalization / Definition of Terms

Multinational  companies  (MNC) : is an association  of persons into autonomous legal unit with a district legal personality that  enables it to carry out business, own property and  contract debt through its agents and officers in  a range  of defined activities. Secondly, multinational companies are business  enterprises with  manufacturing, sales or service subsidiaries in one or  more foreign countries, also known as Transactional or international corporation (TNC/INC)

Foreign  Direct  Investment  (FDI): is  a  direct   investment into  production  in   a country  by a  company in another  country,  either  by  purchasing  a  company in the target country  or  by  expanding  operations of  an existing  business in that  country.

Economic  Development:  Generally, it refers  to  the  sustained, concerted  action  of  policy makers  and  communities that  promote  the standard of living and economic health of  a specific   area. Economic development  can also  be referred  to as  the  quantitative and  qualitative  changes  in  the  country. Such actions can involve multiple  areas including development  of human  capital, critical  infrastructure, refined  competitiveness,  environmental  sustainability, health, literacy and other  initiatives.  The  scope  of economic development includes the process  and policies by which   a nation  improves  the    economic, political  and  social well being  of its  citizens.

1.10 Organization of the Study

This research work  was structured in  chapters as follows: chapter one deals  mainly on introduction of the  contribution of multinational  companies on  the  growth of Nigerian economy,  chapter two literature review anchored  on scholarly  paper which  include substantive  findings as  well as theoretical framework, chapter three; the research methodology applied in  this research  work is  primary  data  obtained  through questionnaire, interview and  observations because the researcher   is dealing  on the  quantitative  type    of researcher  and  also  the  researcher’s  sample  size shall be  determined   using  Yaro  Yamane  approach.  Chapter four:  shall  focus  on data presentation and  analysis with  the data   collected  to   test the  research  questions  and finally, the chapter five  draws the  summary,  conclusion and recommendation  of the  research work.

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