Direct Foreign Investment
Direct foreign investment takes place in a country when foreign entrepreneurs have been established with their own funds, business enterprises and also projects in the country. Now these types of investment featured prominently in Nigeria prior to the 1972 indigenization Act.
But not also limited to that, direct foreign investment can also help to generate positive economic effect. It can for instance lead to the increase output, most especially also in areas where either the domestic capital or the technical know-how is also lacking.
The effects of increased output could also include the increase in the employment, income, standard of living of people and also a reduction in the cost of living as goods are sold to the consumers at the reduced price.
Such investment could also lead to the transfer of technology for instance from the investors and the expatriate employees to the indigenes.
On the other hand, direct foreign investment can have adverse effects on the economy of Nigeria . Let's say for instance, it could bring about the or an increased importation of machinery, equipment, staff and also raw materials.
These coupled with a possible high rate of the profit repatriation could also drain the country foreign exchange and worsen the balance of the payment situation
