The study of the nature involves a lot of deep research and understanding of the factors, which creates the effects on the subject matter.  Primarily, these factors were more economical than managerial as the case may be, on the understanding that this research work is being casual out under a management setting or department. Just as the subject matter is, the impact of foreign direct investment on the Nigerian Economy with a case study of Nigerian Bottling Company Plc, it is based on the economic, social and entrepreneurial impacts created by these multinational companies like NBC Plc on their host societies.  Based on this, the objective of this study was to determine through quantitative and quantitative measures whether the benefits of multinational enterprises (MNE’S) out weigh the cost that results from their activities in the hose countries.The first chapter of this work contains a general discussion (i.e. critics and defense) of FSI’s activities in host countries.  Further the statement of the research problem was studied and the need for the study.  The scope and limitation to the research work was finally looked into with the stated hypothesis which guide the researcher in his evaluations. In chapter two, a number of part related literatures were examined as it relates to the impact of foreign direct investment to Nigeria as the case may be with particular reference to NBC Plc activities in Enugu Zone.  Chapter three treated the design of the study, the method of collecting data and the ways in which the questionnaires were distributed within the chosen population. The data gathered from the research were analysed and interpreted in chapter four of this research report. Finally, the summary of findings, conclusions on the research work and recommendations were given by the researcher all in chapter five.It is believed that these recommendations made in this study will help both the multinationals in their relationship with their host communities as well as creating an enabling environment from the host country for their business to there.


Title Page                    

Approval Page                           




Table of Contents                       

CHAPTER ONE:   Introduction                           

1.1    Background of the Study        

1.2    Statement of Problem       

1.3    Purpose of the Study            

1.4    Scope of the Study                    

1.5    Research Questions            

1.6    Limitations of the study       

1.7   Definition of Terms               

CHAPTER TWO:   Literature Review                               

2.1    Theoretical Review               

2.2    The impact of foreign direct investment on the growth of the host society   

2.3    Foreign Direct Investment; how Ready is Nigeria    

2.4    Theories of Foreign Direct Investment   

2.5    Direct Investment and Welfare       

2.6    Recommendations                        

CHAPTER THREE:   Introduction

3.1    Research Design               

3.2    Area of Study                            

3.2    Population of the study               

3.3    Sample and Size Determination   

3.4    Instrument of Data Collection       

3.5    Validation of the Instrument       

3.6    Reliability of the Instruments           

3.7    Method of Data Collection           

3.8    Questionnaire Distribution and Retrieval   

3.9    Method of Data Analysis               

CHAPTER FOUR:    Data Presentation and Analysis

4.1    Data Presentation and Analysis    

4.2    Summary of Results            

CHAPTER FIVE:   Discussion, conclusion and Recommendations

5.1    Discussion of Findings            

5.2    Implications of the Research Findings    

5.3    Conclusions                   

5.4    Recommendations                    

5.5    Suggestion for Further Studies   






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.

However, just only about few years offer independence when the rest of the world including the erstwhile colonial master had hardly adapted to the realities of Nigeria’s attainment of nationhood or for the Nigerian government to articulate and plan its own economic policy, the country experienced its first military coup d’ et al in 1966.  This was followed by the civil was which tested for three years hence necessitated the cohesion of resources towards the successful execution of the war.  The period saw the introduction of various control measures of great significance.  For the foreign investors, these include licensing, quotas, exchange control measures with two tier compulsory credit system for import payments, restriction on capital/individual transfer and the promulgation of the companies decree of 1968 which compelled all forms operating the country to be incorporated as Nigerian Companies subject to local regulations.

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.  This is because all shares in an organisaiton have same voting rights.

For the purpose of this classification such is recorded as FDI if the share acquired involves more than 10% of the outstanding common shares of the Nigerian company.

In this research and generally, Foreign Direct Investment is classified in the context of Multinational Corporations (MNC).  The MNC is sometimes referred to as Multinational Enterprises (MNE) is Transnational Corporations (TNC) or Transnational Enterprises (TNE).

According to the chairman of BOD’s of Chemical Co, a multinational form in the united state origin “the emergence of a world economy and the multinational corporation have been accomplished land in land”.  He sees multinational enterprises moving towards what he called “a global company”, a firm that have no nationality but belongs to almost all countries.

The phenomenon of the MNC can be explained only in a world of imperfect factor and product market characterized by differential taxation market power and share, positive information costs and the existence of pure specific revenue producing assistance.  In such a world, the market mechanism is partially replaced by other organizational firms, which generates and transmits relevant information and which co-ordinates production and marketing decisions.

The MNC arises in other words in response to a particular kind of market failure caused by high differential costs of inter-nation transfer of market information and technology and of course, factors of production (Tour and Hirsil 1979).  The key features of MNC are the, it provides the recipient nation with a package of knowledge, capital and entrepreneurship development.  It may thereby create a positive contribution to economic growth and development in host countries.  

Many multinationals corporations exist in the Nigerian economic settings these encompassed the manufacturing sector like Nigeria Bottling Company (NBC), constitution like Julus Berger Nigeria, Mineral Exploration like Shell Nigeria, banking etc, to mention but a few.  It becomes pertinent that the manufacturing sector be given due cognizance for the purpose of the research work.  In this sector, the Nigerian Bottling Company Plc will be a case study and a pointer.

The concept of Multinational Corporation and economic development has remained on the relationship between the MNC’s and the host societies and how development is appraised in these host societies.

The issue of contribution to development through social responsibility by the business enterprise has become a topical issue in management decision and is negatively favoured in these host societies.

They have rounding argued that there has been gross neglect and lack of development focus in their place or communities.  It is good to discuss the fact that some laudable developments have been directly felt by these host societies in terms of revenue, employment technology transfer and other benefits to the government.  It is a fact that Nigeria is a developing country and have the same peculiar characteristics with other developing nations of the world such as low standard of living with low savings and investment and lacks managerial know how.  This has placed Nigeria in a guest for resources from other developed nations viz-a-viz international business through MNC’s.

It is also right to say that MNC’s like other business ventures has the objective of profit maximization as their aim.  From the foregoing, 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 comprises Enugu North, Enugu South, Enugu East and 9th Mile Corner on a bench mark.  The prospective here is primarily managerial and economic i.e. the dissension focuses on the important part in the overall evaluation so, they are discussed along with the above mentioned factors.

Historical Background of Nigeria Bottling Company

    The Nigeria Bottling Company Plc (NBC) was incorporated in November 1951, as a subsidiary of the A.G Levant’s Group with the franchise to bottle and sell coca-cola products in Nigeria. From a humble beginning as a family business, the company has grown to become predominant bottler of non-alcoholic beverages in Nigeria, responsible for the manufacture and sale of over 33 different coca-cola brands. Other popular brands of beverage produce by the company are Eva water, Five Alive fruit juice and the newly introduced Burn energy drink. The company presently has 13 bottling facilities and over 80 distribution warehouses located across the country. Since production started, NBC Plc has remained the largest bottle of nonalcoholic beverages in the country in terms of sales volume, with about 1.8 bottles sold per year, marking it the second largest market in Africa. Today, the company is part of the coca-cola Hellenic Bottling Company (CCHBC). One of coca-cola company’s largest anchor bottlers worldwide CCHBE operates in 28 countries, serving 540 million consumers and selling over 1.3billion unit cases of beverage annually. The company recently embarked on restructuring exercise to expand further it market share and growth profit. It invested in a new state of the art can filling packing line at the Apapa plant.

This is in addition to a new bottling plant in Abuja, investment in the upgrade of other manufacturing infrastructure, distribution and delivery facilities.

Nigerian Bottling company Plc (NBC) Company and a sole franchise of the coca-cola Inc. spanning over six decaes of operation, NBC is a market leader in the production of non.

    A softer than expected macroeconomic posed challenges to the manufacturing sector of which NBC, as an integral part has to come to grips with to stay ahead of the pack. Major challenges facing the industry include weak infrastructural support facilities (especially power), Unfair Competition from cheaper imported products and rising cost of fund among others, an analysis of the financial strength of NBC reveals an above-per performance in 2007. Hretrospect, we observe abysmal results in 2006. This was however reversed in 2007 with 13.91 percent ROE and 201.69 percent growth in PAT. Due to the FYE 2006 performance, NBC exhibited a very risky financial profile, (based on Altman’s Z score). However, it scaled through the 4years average. Q1 2008 result show, respectively, turnover and PAT growth of 10.2 percent and 11.7 percent. Our forecasts for FYE 2008 percent and 5.0 percent for turnover and PAT respectively in valuing NBC, we employed both the Discounted cash flow (DCF) and relative valuation Methodologies we obtained #13.57, #12.12 and #23.19 respectively from the discounted.

    Divided method, present value of Growth Opportunities and Residual income valuation. Our relative of Price-to-Earnings (P/E), price-to-sales (P/S) yields #55.75, #97.82 and #176.12 respectively. Attaching appropriate weights to each of the methodologies, we arrived at a fair price of #65.77 with a discount to valuation of 14.39 percent and an upside potential of

    We therefore place a BUY recommendation medium and long term investment horizons.


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.     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.

4.    To determine if multinational corporation maintains cordial relationship with in the host society.


Foreign Direct Investment (FDI) analysis is clouded by a lot of controversy, variety of interpretation and numerous emotive value judgement.  This recreant opinion about the activities of MNC’s in the developing countries are as typical as the topic itself.  Owing to the divergent opinions that exist, it would be practically impossible to give a total survey of the current debate on the topic.

However, this work will make positive efforts to extract in favour of or against MNC’s in developing nations.  Furthermore, it is outside the scope of this work to discuss the consequences of Foreign Direct Investment (FDI) for the investor nations.   


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.    Can 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.


It is not out of place to encounter problems and obstacle in a study of this nature because the scope is quite encompassing both in size and complexity.

The researcher’s inability to gather enough primary and secondary data from the company posed a major problem, as the company regards its books and records as so confidential that they deemed releasing it will be detrimental to them because of fear of their competitors.

Time is another factor that militated against this work as the researcher had not enough time to source for information, as a result of the light school programme.

Finance to embark on the Nigerian trips to 9th mile corner when the company had their plant within the zone was not readily available, as such data collection was highly impeded and limited to Enugu and 9th mile area with a drastically reduced success.

Another major hunting factor was the attitude of the employees of NBC Plc in responding to the questionnaires distributed.  In most cases, the researchers were told that the key officer are busy and cannot see him or is on business trip.  Even those who responded to the questionnaire were skeptical as they were afraid of being victimized for responding to the questionnaire have it a difficult to break in the course of this study.


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; 20th 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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