THE INFLUENCE OF MULTINATIONAL COMPANIES IN THE ECONOMIC DEVELOPMENT OF NIGERIA
1.1 Background of the Study
Available literature on world history reveals that nothing bothers national leaders more than the thought of economic development. Hence outstanding world leaders are always formulating and carrying out policies aimed at economic development of their nations. No prospect is more alluring to nation leaders than the thought of bringing in businesses to develop their nations economy.
Nation leaders have never ignored economic field in their quest for development. Fleet wood feels that most people would despise “the pains that are taken in making collection ‘ of so mean things as the price of wheat and oats (Chronicon Preciosum 1707). Mean things have however assumed dignity as they increasingly contributed to the economic power of the state.
During the first three decades of the 20th century, the development of the Nigerian economy was shaped primarily by Nigerian Farmers and Trader’s response to changing conditions in national markets.
Agriculture and trading were the major economic activities. Apart from mining and handcraft, there was practically no industrial production in Nigeria. The government played a conservative and essentially passive role in the economy. Except for a few major budget and trying not to interfere with the market system. The 1950’s witnessed the beginning of industrial development and the increasing government participation in nearly all sectors of the economy.
Available information unfortunately does not permit one to measure changes in the total level or the sectoral composition of economic activity in Nigeria with much precision, although data on external trade and on the budgets of different levels of government and of various public corporations do reveal absolute changes on these particular activities for example exports of goods and services increased in value by 11.7% between 1950 and 1962 while import rose by 24.6% during the same period. This situation supposes is now hanging with reverse being the case. The main reason for Nigeria’s present backward condition and indeed much of Africa compared with the rest of the world is simply lack of money for development.
Development in Nigeria could not possibly be so rapid if we have to depend solely on the internal building up of capital. In fact much of the economic development found in Africa today is the result of capital imported from Europe and America, surplus capital produced by industries elsewhere brought from Europe to America and Austria in the past to develop these nations.
We are presently in the midst of a kind of regionalism in this country. States and regions are beginning to act like corporations biding for new businesses, trying to improve their capacities for economic growth, exploring new technologies and working a good deal about their public image.
Obviously speaking the development of modern nation states depended so much on the transformation spread? On the technological activities of multinational organisations.
(Imaga E.U.L. 1980). So many authorities are now seeing development plus change in the activities of multinational companies. Few developments have played as critical a role in the extraordinary growth of international trade and capital flow during the past two decades as the rise of multinational corporations. The multinationals corporations are seen as carriers of foreign technological know how, culture and social context hence their ability to help develop a nation. However these companies are not father Christmas and so have their own entrepreneurial goals plus their parent country’s goals which they seek to attain alongside with the objective of providing the needed development goals of their host country.
In most cases their goals may not tally with that of their host countries hence the investor countries tries to protect themselves with restraints against their own enterprises as these firms react to meet the demands of their nation alongside that of their host country’s.
1.2 Statement Of The Problem
Economic and political developments are the goals of any modern state. The yearning for these goals has in recent time dominated the literature of the economies of the developing nations of which Nigeria is one. The lopsided arrangement of the world’s capitalist order under which the third world economy and its periphery components constitute a major obstacle to economic growth and development of these new nations in general.
In view of this, the project work is design to look into the performance of the economy and observe how the activities of the Multinational Corporations have contributed to an increase in the Gross Domestic Product (GDP) and economic development. Nigeria has been experiencing some problems in the area of transfer of technology, employment, economic inequality and balance of payments problems. This work will also aim at examining whether these problems are functions of the Multinational Corporations or whether there are intervening variable responsible for these problems.
1.3 Objectives Of The Study
The aims of this, is to find out the impact of multinational companies in the economic growth and development.
The specific objectives are:
1. To evaluate the nature of the relationship that exist between multi-national corporation and economic growth of Nigeria.
2. To examine the impact of multi-national corporation sector on Nigeria Economy.
3. To offer some recommendations based on the findings of the study.
4. Highlights ways Nigeria could maximize the benefits from the multinational corporations and minimize their negative and anti-development objectives.
1.4 Significance Of The Study
Multinational Corporations are institutions which lead to economic corporation among nations. There has been wide acceptance of economic corporation as the most effective method of enhancing economic development into the less developed countries, Mutharika (1972:20). This research work is important in the sense as it has to in lighten the government on the role of the Multinational Corporation Oil Sector (MNCs) play in the economy towards growth and development.
Enlighten students and researchers on the economic importance of the oil sector Multinational Corporation and their contribution to economic growth and development of the Nigeria economy.
1.5 Research Question
1. To what extent does Multi-national Corporation helps in the development of Nigeria?
2. To what extent does multi-national corporation transfers their technological skill to Nigerians?
3. How has multi-national corporation help in creating job opportunity in Nigeria?
4. What constraints will hinder Multi-national Corporation in their contributions to the economic development of Nigeria?
5. To what extent does the company attract government assistance?
6. To what extent does Multi-national Corporation re-invest their profit in Nigerian Economy rather than repatriating it abroad?
1.6 Research Hypothesis
H0: Multi-national Corporation as one of the non oil sector GDP growth has significant impact on economic development (GDP) growth in Nigeria.
H0: Multi-national Corporation as one of the non oil sector GDP growth has no significant impact on economic development (GDP) growth in Nigeria.
1.7 Definition Of Terms
1. Multinational National Enterprises (MNE)
This is a cross border national business organisation or aggregate of organization that are aggregate of organization that are characterized mainly by the disposal of their managerial ability among several nations.
This section, deals with the definition of some important terminologies in this work.
2. Undeveloped Country: A situation where some of the following feature. Absolute poverty, low per capital income, low rate of economic development, poor health, high death rate, high dependence on importation, balance of payment deficit eg Nigeria.
3. Economic Development: The process of improving the quality of all human living. It comprises the following economic growth, self esteem and economic freedom.
4. Capital Intensive: A method of production whereby capital proportion is relatively higher than labour or land.
5. Indigenization Policy: Measure aimed at localizing ownership and control of the economy by Nigerians. An example is the Nigerian Enterprises Decree of 28th
6. Balance of Payment: A statement of a national’s financial transactions with the outside world over time period usually a year.
7. Cartel: A group of firms which enter into an agreement to set mutually acceptable prices for their products and this is often accompanied by output and investment.
8. Production Function: A technologically or Engineering relationship between the quantity of a goods produced and the inputs required to produce it.
9. Economic Growth: A process by which the productive capacity of the economy is increase over time to bring increase in the levels of national income.
10. GDP: This means Gross Domestic product of a country
11. D.P.R: Department of Petroleum Resources
12. N.N.O.C: Nigerian National Oil Company
13. N.N.P.C: Nigerian National Petroleum Corporation