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CASSAVA INDUSTRY
CHAPTER ONE
INTRODCUTION
Nigeria has the potential to become one of the world’s largest economies and a major player in
the global economy because of its rich human and material resources. With its large human and
material resources, Nigeria has the ability to build a prosperous economy, reduce poverty,
provide health, education and infrastructure services the population needs (Utomi, 2008).
However, this has not been achieved because the agricultural sector has not been utilized to its
full potential. Nigeria has a huge expanse of land that can work perfectly to meet domestic
agricultural needs and international agricultural needs. Furthermore, Oni (2013) noted that the
population of Nigeria is large enough to provide adequate Human Capital for the agricultural
industry. However, the overdependence on the oil sector and the highly undiversified economic
structure has hampered the growth of the agricultural industry. Further, scholars have attributed
the slow growth rate of the agricultural sector especially in the Cassava industry to the lack of
Foreign Direct Investment (FDI) has played an important role in the economic growth and
development of many countries in recent decades (Asiedu, 2002). It has been debated by various
larger measure than domestic investment. Developing countries, emerging economies and
Several countries at different times have liberalized their economies in order to attract foreign
direct investment. However, according to Trade and Investment Guide (2016), it is reported that
FDI inflow in Nigeria has been fluctuating over the course of the last decade from USD $1.19
billion in 2001 to USD 1.87 billion in 2004,Nigeria’s FDI inflow reached USD 11 billion in
2009, making the country the nineteenth greatest recipient of FDI in the world (Robu, 2010).
Before then FDI inflow increased from $786.40 million in 1980 to $1.88 billion in 1989
(Osinubi & Amaghionyeodiwe, 2009). However, the value of FDI inflow fell drastically in 2016
to USD5.2 billion compared to the inflow of FDI in 2012 which was USD7.0billion (Trade and
Due to the poor inflow of foreign investments, the government took several steps to boost the
agricultural sector in a bid to diversify the economy (Fakiyesi, 2015). One of such steps was the
Administration and continued by the Buhari Administration that sought to reorient agriculture
from a development activity centered on the smallholder farmer to a more dynamic, profit-
driven enterprise that connected the farmer to a value chain of processors, distributors, and
retailers. However, despite several efforts from the government, the agricultural sector is still
experiencing poor performances as evidences by the decline in the growth rate of Agricultural
GDP from over 5% in 2016 to less than 2% in 2018 (Trade and Investment Guide, 2016).
In the past, the Cassava cultivation and production industry was one of the mainstay of the
industry has consistently experienced regression over the years (Nwajiuba, 2013). This has
ultimately led to Nigeria’s over reliance on crude oil and importation of cassava related goods
and services and has led to the sluggish rate of growth and development of Nigeria’s economy.
Furthermore, many scholars have speculated the reason for the decline in the performance of the
Cassava industry with some attributing it to poor infrastructure and little investment in human
capital (Makinwa, 2017). However, according to Olison (2017) the major cause of the downturn
in the performance of the Cassava industry has been the lack of foreign direct investment inflow
towards the industry. Furthermore, various other problems such as corruption and political
instability in Nigeria hinder foreign direct investment in the Cassava Industry. However, there is
paucity of research in Nigeria that addresses the relationship between Foreign Direct Investment
This study would identify the factors influencing and ways to improve the inflow of foreign
direct investment in the Cassava industry in Nigeria. Consequently, it would provide the general
public with adequate information on the state and the current inflow of foreign direct investment
2. What is the causal relationship between FDI and the growth of the Cassava industry in Nigeria?
3. What is the effect of FDI on the growth of the Cassava industry in Nigeria?
1.5 Objective of the Study
The broad objective of the study is to identify the impact of Foreign Direct investment on the
1. To determine the factors that influences the growth of the Cassava industry in Nigeria.
2. To determine the causal relationship between FDI and the growth of the Cassava industry in Nigeria.
3. To determine the effect of FDI on the growth of the Cassava industry in Nigeria
Hypothesis 1
H0: There is no significant determinant of the growth of the Cassava industry in Nigeria.
H1: There are significant determinants of the growth of the Cassava industry in Nigeria.
Hypothesis 2
H0: There is no causal relationship between FDI and the growth of the Cassava industry in
Nigeria
H1: There is a causal relationship between FDI and the growth of the Cassava industry in
Nigeria
Hypothesis 3
H0: There is no significant effect of FDI on the growth of the Cassava industry in Nigeria
H1: There is a significant effect of FDI on the growth of the Cassava industry in Nigeria
The study will focus on effect of FDI on the growth of the Cassava industry in Nigeria from
1988 to 2017 in Nigeria. This time series period was chosen in order to adequately analyze the
trends of both the Cassava industry and foreign direct investment in Nigeria. This will help us
appropriately measure if there is any significant impact of foreign direct investment on the
Cassava industry.
1.8 Methodology
The research is quantitative in nature thus the research will adopt the use of descriptive statistics,
trend analysis and the ordinary least square regression analysis in achieving the objectives result.
This analysis will be conducted on the E-Views 8.0 platform. The rationale for this technique is
based on its Best Linear Unbiased Estimator (BLUE) properties. The OLS yields numerical
values of the parameters of the model and other relevant statistics for further analysis and
evaluation.
References
Akinlo, A.E. (2016). Foreign Direct investment and growth in Nigeria: An empirical
Fakiyesi, A. C. (2015). Foreign direct investment and economic growth in Nigeria: An analysis
of the endogenous effects. Current Research Journal of Economic Theory, 4(3), 53-66.
Limited.
Makinwa, E. (2017, May 25). Best way to overcome recession in Nigeria - Agriculture. Naij.com
can-overcome-recession-nigeria.html
Nwajiuba, C. (2013). Nigeria’s Agriculture and Food Security Challenges. Nigeria: Boell
Olison, M. (2017). Determinants of FDI and their impact on Economic Growth in Uganda.
Oni T.O. (2013). Challenges and Prospects of Agriculture in Nigeria: The Way Forward. Journal
Osinubi, T. S., & Amaghionyeodiwe, L. (2009).Foreign Direct Investment and Exchange rate
Oyeranti, O.A. (2013). Foreign Private Investment: Conceptual and Theoretical Issues in
Nnanna, O.J.; Okafor, C.M. &Odoko, F.O. (eds.): Foreign Private Investment in Nigeria.
Central Bank of Nigeria: Proceedings of the 12th Annual Conference of the Regional
Research Units.
Robu, R.G.P. (2010). The Impact of Foreign Direct Investments on Labour Productivity. A
Trade and Investment Guide (2016).World Economic Outlook. New York, USA: United
Nations.
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
The importance of foreign direct investment for any country cannot be overemphasized as they
are important in determining the growth and development of key sectors of the economy and
ultimately the economy itself. As a result, this study aims to determine the impact of Foreign
Direct Investment on the growth of the Cassava industry in Nigeria. This study will also aim to
review the studies of past authors on Foreign Direct Investment and Agricultural industry.
Therefore this draft literature review will aim to briefly discuss the main themes that will be
addressed in the main literature review and will also aim to briefly review the findings of past
studies on the subject. This chapter is divided into three major subsections aside from the
introduction which are: The conceptual framework, the theoretical framework and the empirical
framework.
The conceptual framework of a study entails the system of concepts, assumptions, expectations,
beliefs, and theories that support and inform your research (Ferreira & Morais, 2014). A concept
is an abstract idea based on phenomena in reality that constitutes our data (Becker, 2015).
Therefore, in this study the conceptual framework will consist of the concepts relating to the
impact of impact of foreign direct investment on the growth of the cassava industry in Nigeria.
2.1.1 Concept of Foreign Direct Investment
According to the International Monetary Fund (2011) foreign direct investment shows the aim of
attaining a lasting interest by a resident entity of one economy (direct investor) in an enterprise
that is resident in another economy. This implies that in Foreign direct investment there lies the
existence of a long-term relationship between the direct investor and the direct investment
enterprise and a significant degree of influence on the management of the latter. According to
relationship and reflects a lasting interest and control by a resident entity in one economy in an
enterprise resident in an economy other than that of the foreign direct investor. Furthermore,
expand corporate control of productive assets to other countries aside from the resident country.
a business in one country by an entity based in another country (Letto-Gillies & Grazia, 2012). It
is therefore different from the foreign investment by a notion of direct control. Foreign direct
expanding operations of an existing business in that country (Havranek & Irsova, 2011).
According to the United Nations World Investment Report (2009) Foreign Direct Investmny
entails a foreign direct investor or parent enterprise acquiring an affiliate enterprise or foreign
affiliate company. According to World Bank (2016) Foreign Direct investment is made to
acquire a long term ownership and controlling interest of at least one-tenth of the equity in a firm
operating outside the investors’ country of residence. Foreign Direct Investment is a direct
investor and the enterprise and all subsequent capital transactions between them and among
affiliated enterprises, both incorporated and unincorporated (Lipsey & Robert, 2001). Foreign
Direct Investment is driven by the need for growing international linkages and financial
The agents that engage in FDI are large Multinational Companies (MNCs). From the perspective
of the multinational company, or the investor, there are three types of FDI: horizontal FDI,
This form of foreign direct investment is undertaken when the company wants to expand
horizontally to produce the same or comparable goods in the host country. There are two main
motives for a company to engage in horizontal FDI. The first one is that it is more profitable for
the multinational company to be at the foreign location, and the second motive is that the
company can save a lot on low-cost inputs, such as labour. In addition, horizontal FDI is often
there are fewer restrictions in the host country (Dunning, John & Pitelis, 2008).
In vertical foreign direct investment, different types of activities are carried out abroad. In the
case of Forward Vertical foreign direct investment, the company is brought nearer to the market.
In the case of Backward Vertical foreign direct investment, the international integration goes
In this type of investment, the investment is made to acquire an unrelated business abroad. It is
the most surprising form of foreign direct investment, as it requires overcoming two barriers
simultaneously: entering a foreign country and working in a new industry (Goldberg, 2004).
The flow of foreign direct investment is determined by a variety factors. According to Ngowi
(2011) the following factor influence the flow of Foreign Direct Investment:
A number of studies emphasize the importance of the size of the market in attracting FDI.
Market size has proved to be the most prominent determinants of FDI, particularly for those FDI
flows that are market seeking. In countries with large markets, the stock of FDI is expected to be
large since market size is a measure of market demand in the country. This is particularly true
when the host country allows the exploitation of economies of scale for import-substituting
investment.
The costs as well as the skills of labour are identified as the major attractions for FDI. The cost
(Wheeler & Mody, 2012; Mody & Srinivasan, 2008). Lower labour cost reduces the cost of
production, all other factors remaining unchanged. Sometimes, the availability of cheap labour
justifies the relocation of a part of the production process in foreign countries. Recent studies,
however, have shown that with FDI moving towards technologically intensive activities, low
cost unskilled labour is not in vogue. Rather, there is demand for qualified human capital (Pigato,
2011). Thus, the investing firm is also concerned about the quality of the labour force. It is
generally believed that highly educated personnel are able to learn and adopt new technology
faster, and the cost of retraining is also less. As a result of the need for high quality labour,
investors are most likely to target countries where the government maintains a liberal policy on
the employment of expatriate staff. This is to enable investors to bring in foreigners to their
operation in order to bridge the gap in the skill of local personnel wherever it exists.
2.1.3.3 Infrastructure
The availability of good infrastructure as crucial for attracting FDI is well documented in the
literature, regardless of the type of FDI. It is often stated that good infrastructure increases the
productivity of investment and therefore stimulates FDI flows (Asiedu, 2002). A study by
Wheeler and Mody (2012) found infrastructure to be very important and dominant for
developing countries. In talking about infrastructure, it should be noted that this is not limited to
roads alone, but includes telecommunications. Availability and efficiency of telephones, for
example, is necessary to facilitate communication between the host and home countries. In
addition to physical infrastructure, financial infrastructure is important for FDI inflow. A well-
developed financial market is known from available evidence to enable a country to tap the full
benefits of FDI. Alfaro et al. (2001), using cross-section data, find that poorly developed
financial infrastructure can adversely affect an economy’s ability to take advantage of the
potential benefits of FDI. In a study by Bhinda, Griffth-Jones and Martin (2009), it was found
that problems related to funds mobilization were on the priority list of the factors discouraging
Several studies have found FDI in developing countries to be affected negatively by economic
and political uncertainty. There is abundant evidence to show the negative relationship between
FDI and political and economic stability. In a study on foreign owned firms in Africa, Sachs and
Sievers (2008) conclude that the greatest concern is political and macroeconomic stability, while
Lehman (2009) and Jaspersen et al. (2010) find that countries that are less risky attract more FDI.
Perception of risk in Africa is still very high and continues to hinder Foreign Direct Investment.
Openness of an economy is also known to foster the inflows of FDI. The more open an economy
is, the more likely it is that it would follow appropriate trade and exchange rate regimes and the
2.1.3.6 Corruption
operations. In this category is a wide array of factors that can promote or deter investment. The
first of these is the existence of corruption and bribery. Corruption deters the inflow of FDI
because it is an additional cost and because wherever it exists, it creates uncertainty, which
inhibits the flow of FDI. The second is the level of bureaucracy involved in establishing a
business in a country. Complex and time-consuming procedures deter investment. The third
institutional factor is the existence of incentives in the form of fiscal and financial attractions.
This last factor is only useful to the extent that other favourable factors are already in place.
Fourth, there is also the institution of the judiciary, which is the key to protecting property rights
and law enforcement regulations. A frequent measure of this is the rule of law, which is a
composite of three indicators (Campos & Kinoshita, 2003): sound political institutions and a
strong court system; fairness of the judicial system; and the substance of the law itself. It is
expected that countries with better legal infrastructure will be able to attract more FDI. Related
here is the enforceability of contracts: The lack of enforceability in many African countries raises
The availability of natural resources is a critical factor in attracting FDI. This is particularly so in
Africa where a large share of FDI has been in countries with abundant natural resources. In some
cases, the abundance of natural resources has been combined with a large domestic market.
African countries that have been able to attract most FDI have been those with natural and
mineral resources as well as large domestic markets. Traditionally about 60% of Africa’s FDI is
allocated to oil and natural resources (UNCTAD, 2009). The Africa region possesses not only
large reserves of oil, gold, diamonds and copper, but also more than half of the world’s cobalt
and manganese, one-third of bauxite and more than 80% of chromium and platinum. A number
of countries, including Angola, Nigeria, Côte d’Ivoire, Botswana and Namibia, have been host to
Foreign investors may be attracted to countries with an existing concentration of other foreign
investors. In this case, the investment decision by others is seen as a good signal of favourable
conditions. The term “agglomeration economies” is often applied to this situation (Campos and
Kinoshita, 2003). The clustering of investors leads to positive externalities. Three types of such
externalities have been identified in the literature. The first is that technological spillovers can be
shared among foreign investors. Second, they can draw on a shared pool of skilled labour and
specialized input suppliers. Third, users and suppliers of inputs cluster near each other because of
the greater demand for a good and the supply of inputs, which is provided by the large market.
2.1.3.9 Return on Investment
Return on investment is another major determinant of FDI flows. In general, FDI will go to
countries that pay a higher return on capital. For developing countries, testing the rate of return
on capital is difficult because most developing countries do not have a well functioning capital
market (Asiedu, 2002). What is often done is to use the inverse of real GDP per capita to
measure the return on capital. The implication of this is that all things being equal, investments
in countries with higher per capita income should yield lower return and therefore real GDP per
capita should be inversely related to FDI (Asiedu, 2002). Macroeconomic and other policies also
play a role. Macroeconomic policy errors resulting in exchange rate misalignment and the lack of
convertible currencies constrain FDI flows. In cases where policies are not sustainable, FDI
Agriculture is the art and science of crop and livestock production. In its broadest sense,
agriculture comprises the entire range of technologies associated with the production of useful
products from plants and animals, including soil cultivation, crop and livestock management, and
the activities of processing and marketing. The term agribusiness has been coined to include all
the technologies that mesh in the total inputs and outputs of the farming sector. In this light,
agriculture encompasses the whole range of economic activities involved in manufacturing and
distributing the industrial inputs used in farming: the farm production of crops, animals and
animal products, the processing of these materials into finished products and the provision of
Akinboyo(2008), defines Agriculture as the science of making use of the land to raise plants and
animals. It is the simplification of nature’s food webs and the rechannelling of energy for human
planting and animal consumption. Until the exploitation of oil reserves began in the 1980s,
Nigeria’s economy was largely dependent on agriculture. Nigeria’s wide range of climate
According Aminu and Anono (2012), Agriculture involves the cultivation of land, raising and
animals, for the purpose of production of food for man, feed for animals and raw materials for
industries. It involves forestry, fishing, processing and marketing of these agricultural products.
Essential, it is composed of crop production, livestock, forestry, and fishing. The role of
agriculture in reforming both the social and economic framework of an economy cannot be over
emphasized. It is a source of food and raw materials for the industrial sector. It is also essential
for the expansion of employment opportunity, for reduction of poverty and improvement of
income contribution, for speeding up industrialization and easing the pressure on balance of
payment. In effect, it has the main source of gainful employment, which the nation can feed its
the nation’s industries with local raw materials and a reliable source of government revenue.The
physiocrats believe that the fate of the economy is regulated by productivity in agriculture and its
surplus is diffused throughout the system in a network of transactions. The agricultural sector to
the physiocrats is the only genuinely productive sector of the economy and the generator of
The agricultural sector in the Nigerian context touches the entire sub sector of the “primary
industry”. They include farming (which include livestock rearing), fishing and forestry. Due to
the inadequate application of modern implements such as tractors and chemicals productivity has
been low. In most part of the world, shifting cultivation which has almost disappeared is still
being practiced in Nigeria by peasant farmers. And fragmentation of holdings has been
associated with archaic mode of farming. The Nigeria agricultural sector is composed and
structured in such a rudimentary way such that in the north a large number of cattle Fulani’s
engage in livestock farming, and these cattle rears more their cattle especially in the dry seasons.
While in the southern region, they are engaged in fishing. It is thus, this structure of agriculture
that makes agriculture laborious and tedious, and fragmentation makes it quite difficult for
Dalhatu (1991), Observed that 90% of the nation’s farming population which is responsible for
about 95% of the aggregate food and fiber output in Nigeria are actual fact small farmers.
However, there has been a gradual transformation from subsistence types of agriculture all over
the country; there are three major types of agriculture practices in Nigeria in which are discussed
in details below:
The basic variable input in this type of agriculture is that of the family. Most agricultural
activities are devoted to the growing of food by small farmers. The patterns of shifting
cultivation and bush fallowing are administered in this type of agriculture. Shifting cultivation as
(Taiwah, 1989) describes it, it involves the planting of seed in soil and little attention is paid to it
during the growing period. The moment the crop yield begins to decline, patch of land is
consumption, but for exchange as well, hence this type of agriculture. For instance, cash crops
include: cocoa, palm produce, rubber, cotton and grand nuts. There was a time that the value of
these cash crops increased considerably in the world market and this paved way for the
specialized production of commercial crops. While some farmers saw reasons to specialize in
production of export crops, these were those who decided on the specialization on food crops this
specialization was as a result fast development of inter-regional trade, rapid urbanization and rise
This system is highly mechanized involving the use of large scale agricultural machinery as well
as irrigation facilities. It is also capital intensive and is usually undertaken on quite a large size
but also their monocultures characteristic, systematic layout advanced infrastructure. Their other
typical characteristic includes; high capital outlay, mechanization, extensive of hired and high
reliance on artificial external inputs and the major advantage of plantation agriculture is the
economics of scale, carbon and oxygen cycling, and minimization of soil erosion by the densely
distributed plants these merit under lie the participation of plantation as a better alternative for
agricultural development in the tropic, their long-standing economic role in several countries
The term theoretical framework comprises two words, “theory” and “framework” (Lysaght,
2011). A theory, according to Chang (2007), is a set of interrelated constructs, definitions, and
framework consists of the selected theory or theories that undergird philosophical thinking with
regards to how you understand and plan to research your topic, as well as the concepts and
definitions from that theory that are relevant to the study (Luse, Mennecke & Townsend, 2012).
The aim of the theoretical framework is to discuss underpinning theories that that explain the
interlink between the variables being studied. Thus the theoretical framework will based on the
This theory was developed by John Dunning in 1979 which is called OLI paradigm. It involves
the introduction of more integrated theories of FDI and foreign owned production activity. The
idea behind the eclectic paradigm is to merge several isolated theories of international economics
in one approach. These propositions form the bedrock of the paradigm which is the extent and
(MNEs). This paradigm ensures that at any point in time investment is determined by three
forces, which are the OLI factors. The so called OLI factors are three (3) categories of
The Ownership ‘O’ advantage talks about some competitive advantages that is unique to the
intangible and can be transferred within the multinational enterprise at low cost, for example,
technology, brand name, benefit of economies of scale (Holsapple, Ozawa & Olienyk, 2006).
The advantage gives rise to higher revenue and/or lower costs that can offset the cost of
advantages in foreign market. The location ‘L’ advantage are foreign advantages which firms use
in connection with its local Firm Specific Advantage (FSA) in other to earn full rent on these
FSAs. Thus, we can say that the location advantages of different countries are keys in
determining which will become host countries for multinational enterprises. The relative
attractiveness of various locations can change overtime so that a host country can to some extent
manage its competitive advantage as a location for foreign direct investment. The location
advantage can be due to economic differences among countries with varying forms. For
example, the closeness to raw materials and other important inputs, the quantities and qualities of
the factor of production, scope and size of market, transportation and communication cost.
All these three condition must be met before transnational companies open a subsidiary in
foreign country (Soderstein, 1992). The Internalization ‘I’ advantage; supposing the first two
conditions are met, it must be profitable for the company to use of these advantages, in
collaboration with at least some factors outside the country of origin (Dunning, 1973, 1980,
1988). This third characteristic of the eclectic paradigm OLI offers a framework for assessing
different ways in which the company will exploit its powers from the sale of goods and services
internalization benefits is higher the more the firm will want to engage in foreign production
Oloyede (2014) examined the impact of FDI on the agricultural sector development of the
Nigerian economy. This study employed secondary time series data which spanned 1981 to
2012, Following ADF test for stationarity and a granger causality test, the study found a
relationship among the variables as affirmed by the error parameter. The study further revealed
that FDI positively impacted on agriculture not only in the short run but also in the long run.
Yussuff, Adamu and Afolayan (2015) analyzed the linkage between the flow of FDI to
agricultural sector and the level of productivity in the sector is necessary to identify policy
measures that may be geared towards maximizing the flows and gains of FDI to agricultural
sector. Using descriptive analysis and simple linear regression, this paper therefore examined the
level of foreign direct investment on agricultural sector and the consequential effect on the
contribution of the sector to the country’s Gross Domestic Product (GDP). The result obtained
shows that the inflow of FDI to agricultural sector does not follow a regular pattern and the
Adekunle, Akinwale and Obagunwa (2018) explored the impact of foreign direct investment on
agricultural productivity in Nigeria. The study employed Augmented Dickey Fuller (ADF),
Johansen test and Error Correction Mode to examine the effect of foreign direct investment and
agricultural development. The unit root test results revealed that all the macroeconomic variables
namely Agricultural Productivity, Foreign Direct Investment, Bank Credit to Agricultural Sector
and Government Expenditure to Agricultural Sector were stationary at first difference. The
results of the co-integration test indicated that there exist long run equilibrium relationships
among the variables. The result of the error correction model indicated that both foreign direct
investment and bank credit to agricultural sector had significant effect on agricultural
productivity while it was established that there exist an insignificant relationship between
Moses, Okpachu and Ojonugwa (2013) examined the relationship between foreign direct
investment and performance of the agricultural sector in Nigeria. Time-Series data obtained from
the Central Bank of Nigeria was used for the period 1970–2010. The results of the Augmented
Dickey Fuller (ADF) unit root test indicated that all the variables included were non-stationary at
their levels but integrated of order one,. The outcome of the co-integration tests revealed stable
long run equilibrium between FDI and explanatory variables in the model. The results of the
Ordinary Least Square revealed a positive relationship between the performance of agriculture
and the following fundamental variables Foreign Direct Investment, Gross Domestic Savings and
Yusuf (2015) examined the impact of Foreign Direct Investment on Agricultural output in
Nigeria from 1970-2012 using an autoregressive distributed lag (ARDL) model. Data were
sourced from the National Bureau of statistic (NBS), Central Bank of Nigeria (CBN), and the
World Development Indicators. The results from the analysis revealed that Foreign Direct
Investment, Government expenditure and Exchange rates in the period under study have
significant positive effects on Agricultural output, whereas Interest rates and Inflation variables
have negative effect on Agricultural output, although the Inflation rate is not significant.
Ayashagba and Abachi (2002) investigate on the effects of foreign direct investment in
agricultural sector on economic growth from 1980 to 1997. Their result revealed that foreign
private investment had significant impact in Agriculture in Nigeria. Nevertheless, the study
defines that the presence of foreign direct investment in the LDCs particularly in Nigeria is not
entirely valuable.
Solomon and Eka (2013) investigated the empirical relationship between Foreign Direct
Investment and agricultural sector and economic growth in Nigeria. The work covered a period
of 1981-2009 using an annual data from Central Bank of Nigeria statistical bulletin. A growth
model via the Ordinary Least Square method was used to ascertain the relationship between FPI
and economic growth in Nigeria. The result of the OLS techniques indicated that FPI has a
positive but has insignificant impact on Nigerian economic growth for the period under study.
Alejandro (2010) explained that FDI plays an extra ordinary and growing role in agricultural
sector and economic growth. Ogbanje et.al (2010) used Pearson Product Moment Correlation
analysis to determine the relationship between agricultural FDI and agricultural GDP and found
Umoh, Jacob and Chuku (2012) empirically investigated the relationship between foreign direct
investment and economic growth in Nigeria between 1970 and 2008. The study makes the
suggestion that there is endogeneity i.e., bi-directional relationship between FDI and economic
growth in Nigeria. They said that FDI and economic growth are equally determined in Nigeria
and there is positive response from FDI to growth and from growth to FDI. The common policy
effect of the result is that policies that draw more foreign direct investments to the economy,
greater openness and increased private participation will need to be followed and reinforced to
confirm that the national economy captures superior spillovers from FDI inflows and achieves
Onu (2012) investigated the impact of foreign direct investment (FDI) on Economic Growth in
Nigeria within the period 1986-2007. The study employed multiple regression models to
determine the impact of some external or macro variables on the gross domestic product (GDP)
proxy for economic growth in Nigeria. The study used time series data to ascertain the inflow of
FDI to the Nigerian economy and its implications on economic growth. The study found that FDI
has the potential to positively impact upon the economy though its contribution to GDP was very
Campa, J. M. (2013). Entry by Foreign Firms in the United States under Exchange Rate
Dunning, J., & Pitelis, C.N. (2008). Stephen Hymer’s contribution to international business
(1), 167-173
Froot, K., & Stein, J. (2009). Exchange Rates and Foreign Direct Investment: An Imperfect
Goldberg , L. S. (2004). Foreign Direct Investment, Exchange Rate Variability and Demand
Havranek, T. & Irsova, Z. (2011, 30 April). Which Foreigners are worth wooing? A meta –
Agency.
Limited
Slaughter, Y., & May, T. (2012). Legal regimes governing Foreign Direct Investment (FDI) in
host countries.
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UNCTAD (2010). Foreign direct investment, the transfer and diffusion of technology, and
RESEARCH METHODOLOGY
3.0 Introduction
This chapter outlines how data are collected for the study, method of carrying out the research,
restatement of hypothesis, model specification, design of the whole project work in order to
present the data collected in one or more statistical forms for easy understanding, analysis and
interpretation.
The research is quantitative in nature; the regression analysis will be used to arrive at the
objective result via the E-View software in estimating the multiple regression.
The data to be used for the analysis are quantitative time series data. The essence is to arrive at
an objective result of providing a quantitative measure the relationship between foreign direct
investment and Cassava industry growth. For this purpose, data collected are those on Cassava
Output (Dependent Variable), Foreign Direct Investment in the Cassava industry, Commercial
Bank credit to the Cassava industry, Trade Openness, Exchange Rate and Interest Rate
(Independent Variables). Data will be collected from secondary sources which are, Food and
Agricultural Organization, National Bureau of Statistics (NBS) and Central Bank of Nigeria
The elicited data will be collated and presented in tables and other tools of descriptive statistical
analysis. The data will then be analyzed in order for the relationship between foreign direct
investment and cassava industry growth in Nigeria. Thereafter, the data will be subjected to
empirical statistical analysis aimed at drawing a reliable inference on the relationship between
foreign direct investment and cassava industry growth, and providing a quantitative basis for
policy recommendations. For the purpose, a multiple regression analysis model of the functional
relationship between indicators of Foreign Direct Investment, on one hand and the Cassava
industry growth in Nigeria on the other hand, is postulated. The model is used as an abstract,
specified to forge a link between these two sets of indicators. The model is then estimated via
Ordinary Least Square (OLS) technique with the aid of computer software E-Views. The
rationale for this technique is based on its Best Linear Unbiased Estimator (BLUE) properties.
The OLS yields numerical values of the parameters of the model and other relevant statistics for
further analysis and evaluation. The parameter estimates will therefore be analyzed based on the
apriori expectations to gain insight into the nature and magnitude of the relationship between the
explained and explanatory variables. Subsequently, estimates are evaluated for individual, joint
statistics significance and the presence of first order correlation, leading to acceptance or
rejection of research hypothesis based on the stated estimation and evaluation outcomes
Multiple regression analysis will be applied to examine the data on Foreign Direct Investment
and Cassava industry growth in Nigeria. The method of data collection in this research is strictly
non-probabilistic. Secondary data will be collated through the use of various issues of CBN
statistical bulletin from 1988-2017. Econometric approach will be applied as the method of
ordinary least square (OLS) will be used to derive the estimates of the parameters of the
specified equations and with the aid of E-Views software for empirical statistical analysis.
Estimated model parameters will be subjected to various reliability and validity tests using
relevant statistics such as R square and adjusted R square to measure the proportion of variations
in the dependent variables as explained by the independent variables, the t-statistics to determine
the individual statistical significance of the explanatory variables, the F-statistics for the overall
statistical significance of the variables and the Durbin Watson(DW) statistic for serial
autocorrelation, since OLS is used, economic implications and policy relevance will be deduced
and discussed based on findings of the empirical analysis. The operational variables and model
Y = β0 + β1 X1 + β2 X2 + β3X3 + β4 X4+ β5 X5 µ
Where
X3 = Trade Openness
X4 = Exchange Rate
X5 = Interest Rate
β0 = Intercept
µ= Error term
As an Econometric Model
TO = Trade Openness
β0 = Intercept
µ= Error term
Apriori Expectations
Based on signs, β0>0, β1>0, β2>0, β3>0, β4<0, β5>0. 𝛽 0 is expected to be positive; β0 is to take
care of the constant variable, β1 is the coefficient of Foreign Direct Investment (X1) which is
expected to be greater than zero (β1>0) because it is positively related to Cassava industry
growth. β2 is the coefficient of Commercial Bank Credit to Cassava Industry (X2) which is
expected to be greater than zero (β2>0) due to its positive relationship with Cassava industry
growth, β3 is the coefficient of Trade Openness (X3) which is expected to be greater than zero
(β2>0) due to its positive relationship with Cassava industry growth, β4 is the coefficient of
Exchange Rate (X4) which is expected to be less than zero (β4<0) due to its negative relationship
with Cassava industry growth, β5 is the coefficient of Interest Rate (X5) which is expected to be
greater than zero (β5<0) due to its positive relationship with Cassava industry growth. The
coefficient of the error term is expected to lie between 0 and1 and also to be statistically
significant, indicating a long run relationship between Foreign Direct Investment and Cassava
This deals with the reliability of the results from the OLS. The evaluation concerns itself with
deciding whether the estimates of the parameters are theoretically meaningful and statistically
satisfactory. The students T- tests, R squared, adjusted R squared, Durbin Watson and the F-
statistics would be employed in evaluating the model. The student T-test will measure the
individual statistical significance of the coefficient in the model at 5% level of significance (α);
the standard error will measure the dispersion of the estimates around the true parameters. The
larger the standard error of the parameter, the less reliable it is. The variability of the dependent
variable as explained by the independent variables will be measured using the coefficient of
determination, R2. The R2 will be operationally useful, if it is equal to or greater than 0.5 (i.e. R2≥
0.5) and the hypothesis will be tested jointly using the F-statistics. A higher R2 denotes a strong
explanatory power of the model while a low value denotes a weak explanatory power of the
model, and depicts the relationship between the dependent variable (Cassava industry growth in
Nigeria) and the independent variables (Foreign Direct Investment). The detection of serial
autocorrelation will be carried out through the Durbin Watson DW- test.
CHAPTER FOUR
4.0 INTRODUCTION
This chapter presents the data collected on the various variables in tables and the analysis of the
data to draw inferences from the data. It summarizes the empirical results of the data to provide
viable interpretation to the deductions of the analyzed data. The objective of this chapter is to
analyze and interpret processed data in order to determine if foreign direct investment has a
significant impact on the cassava industry. The model for the research work was specified and
estimation was done using multiple analysis technique. The software for statistical analysis,
The data for our analysis is presented in a table 4.1.1 for a detail discussion to see if a trend can
Foreign
Direct
Investment Bank Credit
in Cassava to Cassava Interest
Cassava
Industry Industry Rate
Industry Trade Exchange
Year Output (₦) (₦) Openness Rate
1988 17654700 158200000 3066700000 35.32 4.54 16.500
1989 18345000 152600000 3470500000 60.42 7.39 26.800
1990 19043008 145600000 4221400000 53.02 8.00 25.500
1991 26004000 280600000 5012900000 64.88 9.90 20.010
1992 29184000 473800000 6978900000 61.02 17.30 29.800
1993 30128000 1536400000 10753600000 58.07 22.00 18.320
1994 31005000 1626100000 17757700000 42.34 22.00 21.000
1995 31404000 1074600000 25278700000 59.75 21.90 20.180
1996 32050000 1013400000 33264100000 57.7 21.90 19.740
1997 32695000 1154700000 27934300000 76.86 21.90 13.540
1998 32698000 1371600000 27180700000 66.19 21.90 18.290
1999 32070000 1387800000 31045700000 55.84 92.30 21.320
2000 32810000 1102500000 41028800000 71.37 101.70 17.980
2001 32586000 1136100000 55846100000 81.81 111.20 18.290
2002 34475000 1162000000 30849700000 63.38 120.60 24.850
2003 33379000 1221500000 62102800000 75.21 129.20 20.710
2004 34896700 1744400000 67738600000 48.43 132.90 19.180
2005 35679500 1079200000 48561500000 50.74 131.30 17.950
2006 32567800 1211200000 49193400000 64.61 128.70 17.260
2007 36781900 1456000000 14037890000 64.46 125.80 16.940
2008 37562109 1599200000 13481460000 64.97 118.50 15.140
2009 38541000 1765200000 11420660000 61.81 148.90 18.990
2010 36712300 6533100000 13576130000 42.65 150.30 17.590
2011 36234800 8024100000 18026280000 52.8 153.86 16.020
2012 37190000 7716100000 20553770000 44.38 157.500 16.790
2013 37698000 9160900000 27238840000 31.05 157.310 16.720
2014 36890100 5527200000 29475680000 30.98 158.550 16.550
2015 37904800 7192000000 30632240000 32.35 192.440 16.850
2016 38012300 7698000000 32578730000 31.65 253.491 16.870
2017 39238900 8903400000 34768908900 35.98 305.800 14.000
30
25
20
15
10
0
88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
17.4
24
17.2
23
17.0
22
16.8
16.6 21
1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015
5 22
4 21
3 20
2 19
1 18
1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015
3.4 4.4
3.2 4.2
3.0 4.0
2.8 3.8
2.6 3.6
2.4 3.4
1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015
The table and graph above shows time series data on Cassava Productivity, Foreign direct
investment in the Cassava industry in Nigeria, Bank Credit to Cassava industry, Trade Openness,
Exchange Rate and Interest Rate. In achieving the first objective, this section will analyse the
trend of the relationship between Productivity in the Cassava Industry and the independent
variables which are (Foreign direct investment in the Cassava industry in Nigeria, Bank Credit to
Cassava industry, Trade Openness, Exchange Rate and Interest Rate) in Nigeria from 1980 to
2016.
The graph shows that the cassava industry output experienced a steady rise from 1988 to 1999
before experiencing inconsistent movements from 2000 to 2017 reaching its peak in 2017.
The graph also shows that the Foreign Direct Investment in the cassava industry experienced a
rapid increase from 1988 to 1993 before experiencing little increase in 1994. However, from
1995 to 2006 the Foreign Direct Investment in the cassava industry experienced an inconsistent
upwards and downwards movement. From, 2007 to 2017 the Foreign Direct Investment in the
cassava industry experienced a steady rise with it reaching its peak 2012 before experiencing a
slight dip in 2013. The Bank credit to the Foreign Direct Investment in the cassava industry did
not experience a similar movement to the cassava industry output which may suggests that there
is no relationship the Foreign Direct Investment in the cassava industry and the growth of the
cassava industry.
The graph further shows that the Bank credit to the Cassava industry experienced a steady climb
from 1988 to 1996. However, from 1997 to 2006 the Bank credit to the Cassava industry
experienced an inconsistent upwards and downwards movement reaching its peak in 2004 before
experiencing a major dip in 2007 and further dip in 2008 before experiencing a steady rise from
2008 to 2017. The Bank credit to the Cassava industry did not experience a similar movement to
the cassava industry output which may suggests that there is no relationship between the bank
credit given to the cassava industry and the growth of the cassava industry.
The graph also shows that throughout the years Trade Openness experienced an inconsistent
movement upwards and downwards. Trade Openness did not experience a similar movement to
the cassava industry output which may suggests that there is no relationship between Trade
Furthermore, the graph shows that the exchange rate experienced a fairly consistent upward
movement from throughout the years. The exchange rate experienced a similar pattern of
movement with Cassava output which may suggest that they have a relationship.
The graph also shows that the interest rate experienced fairly inconsistent movements upwards
and downwards throughout the years reaching its peak in 1992. The interest rate did not
experience a similar pattern of movement with Cassava output which may suggest that they are
not related.
Observations 30 30 30 30 30 30
Interpretation
Mean is the average value of the series, obtained by adding up the series and dividing by the
number of observations. From the table above, the mean for LCOP (Cassava Productivity) is
17.28419, LFDIC (Foreign Direct Investment) is 21.15862, LBCC (Bank Credit to the Cassava
Industry) is 23.72485, LTO (Trade Openness) is 3.963551, LEXR (Exchange Rate) is 4.125463,
Median is the middle value of the series when the values are ordered from the smallest to the
largest. The median is a robust measure of the centre of the distribution that is less sensitive to
outliers than the mean. From the table, the median for LCOP (Cassava Productivity) is 17.31484,
LFDIC (Foreign Direct Investment) is 21.04511, LBCC (Bank Credit to the Cassava Industry) is
24.02684, LTO (Trade Openness) is 4.058453, LEXR (Exchange Rate) is 4.783696, LINTR
Maximum and minimum are the maximum and minimum values of the series in the current
sample. The maximum of LCOP (Cassava Output) is 17.48518 and its minimum is 16.68651, the
maximum of LFDIC (Foreign Direct Investment) is 22.93821 and its minimum is 18.79637, the
maximum of LBCC (Bank Credit to the Cassava Industry) is 24.93892 and its minimum is
21.84387, the maximum of LTO (Trade Openness) is 4.404399 and its minimum is 3.433342,
the maximum of LEXR (Exchange Rate) is 5.722931 and its minimum is 1.512927, LINTR
4 Mean -6.13e-17
Median 0.003791
Maximum 0.112460
3 Minimum -0.144550
Std. Dev. 0.069992
Skewness -0.161296
2
Kurtosis 2.223817
1 Jarque-Bera 0.883158
Probability 0.643020
0
-0.15 -0.10 -0.05 0.00 0.05 0.10
The Jarque-Bera test was used to measure the normality of the data used for the study. The table
above shows the standard deviation of the model. The Standard Deviation is a measure of
dispersion or spread in the series. The Standard Deviation for the series is 0.069992.
Kurtosis measures the peakedness or flatness of the distribution of the series. If the kurtosis
exceeds 3, the distribution is peaked (leptokurtic) relative to the normal; if the kurtosis is less
than 3, the distribution is flat (platykurtic) relative to the normal. From the table, it is seen that
Skewness is a measure of asymmetry of the distribution of the series around its mean. The
skewness of a symmetric distribution, such as the normal distribution, is zero. Positive skwness
means that the distribution has a long right tail and negative skewness implies that the
distribution has a long left tail. From the table above, it is seen that the data is negatively skewed.
Jarque-Bera is a test statistic for testing whether the series is normally distributed. The test
statistic measures the difference of the skewness and kurtosis of the series with those from the
normal distribution. The value of the Jarque-Bera statistics for the model is 0.883158 and the p-
value is 0.64302. Thus based on these values we accept the null hypothesis that our data is
normally distributed.
This test aims at examining the properties of the time series. Stationarity of the series was tested
using the Augmented Dickey-Fuller (ADF) test. This test had to be conducted before going
further to conduct the Ordinary Least Square test and the Granger Causality test in order to
determine the long run equilibrium convergence as well as the speed of disequilibrium
adjustment respectively. In order to check whether or not the series has a unit root, an
Difference Integration
Value at A at 5% A
5% G G
Note: A variable is said to be stationary when the value of ADF is greater than the critical value.
By comparing the absolute ADF test statistic values with the absolute Critical values at levels,
the ADF statistics shows that no variable is stationary at levels. As a result of this, we had to
proceed to raising an ADF statistic test at 1st difference, where all variables were seen to be
stationary.
This section is devoted to empirical statistical analysis and test of research hypothesis. In testing
the hypothesis, a model showing the functional relationship between cassava industry growth
and foreign direct investment in the cassava industry will be established. The data to be
employed in this study is scheduled to quantitative time series data. The Ordinary Least Square
Regression and the Granger Causality test will be used in testing and estimating the model. The
model would seek to investigate the impact of Foreign Direct investment on the growth of the
Cassava industry in Nigeria. The estimation period would be restricted to the period between
1988 and 2017. Secondary data will be the basis of data to be used in this study. They would be
sourced mainly from the publications of the Central Bank of Nigeria (CBN) namely; CBN
Statistical Bulletin, CBN Annual Reports, Food and Agriculture Organization and National
Bureau of Statistics. The variables for which data will be sourced include Cassava Industry
Output, Foreign Direct Investment in the Cassava Industry, Commercial Bank Credit to the
Cassava Industry, Trade Openness, exchange rate, interest rate from 1988 to 2017. In this
research work, the econometric technique used is ordinary least square (OLS) in form of multiple
linear regressions. Secondary data will be collated through the use of various issues of CBN
statistical bulletin. Econometric approach will be applied as the method of ordinary least square
(OLS) will be used to derive the estimates of the parameters of the specified equations and with
the aid of E-Views software for empirical statistical analysis. The operational variables and
model specification applicable for this research work are stated as follows;
Y = β0 + β1 X1 + β2 X2 + β3X3 + β4 X4+ β5 X5 µ
Where
X3 = Trade Openness
X4 = Exchange Rate
X5 = Interest Rate
β0 = Intercept
µ= Error term
As an Econometric Model
LCOP = β0 + β1LFDIC + β2LBCC + β3LTO + β4 LEXR+ β5 LINTR+ µ
The estimated model reveals that Foreign direct investment exerts a positive influence on
Cassava Growth as measured by Cassava Output (Y). Given the coefficients of the slope, a 1%
increase change in foreign direct investment rate will bring about a 0.126613% increase in
cassava output and vice versa, likewise if there is a 1% increase in Commercial Bank credit to
the Cassava industry, it will bring forth a 0.030966% increase in cassava output, furthermore, a 1%
increase in trade openness will lead to a 0.214286% increase in cassava output, a 1% increase in
the exchange rate will lead to a 0.046424% increase in cassava output, finally, a 1% increase in the
interest rate will lead to a 0.005358% increase in cassava output. The model shows that all the
to the dependent variable (cassava output) except the exchange rate. In line with the results, the
apriori expectation where met except for positive relationship of exchange rate with cassava
output.
Model Evaluation
The model will be evaluated for statistical significance, and relationship association through the
H0: There is no significant determinant of the growth of the Cassava industry in Nigeria.
H1: There are significant determinants of the growth of the Cassava industry in Nigeria.
statistical significant impact on the growth of the Cassava industry in Nigeria are the Foreign
Direct Investment in Cassava, Trade Openness and Exchange Rate. Thus commercial Bank
Credit and interest rate do not exert statistical significance on the growth of the Cassava industry
in Nigeria. As such it can be seen that there are significant determinants of the growth of the
cassava industry in Nigeria. The significant determinants of the growth of the cassava industry in
Nigeria have identified as Foreign Direct in Cassava, Trade Openness and Exchange Rate.
Therefore we reject the null hypothesis that says that there is no significant determinant of the
growth of the Cassava industry in Nigeria and accept the alternate hypothesis.
Hypothesis 2
H0: There is no causal relationship between FDI and the growth of the Cassava industry in
Nigeria
H1: There is a causal relationship between FDI and the growth of the Cassava industry in
Nigeria
To test this hypothesis, this study adopted the granger causality test.
The result of the Granger Causality test done to test the causal relationship between the growth
of the Cassava industry and foreign direct investment in the cassava industry showed that at 95%
statistical level of confidence there is not enough evidence to state that there is a causal
relationship between the growth of the Cassava industry and foreign direct investment in the
cassava industry.
Hypothesis 3
H0: There is no significant effect of FDI on the growth of the Cassava industry in Nigeria
H1: There is a significant effect of FDI on the growth of the Cassava industry in Nigeria.
explanatory power, and is of good fit. That is, within the context of the model, about 89.08% of
total variations in the growth of the cassava industry are explained by foreign direct investment
proxies, and only 10.92% unexplained variations can be attributed to other factors outside our
model.
Decision
Since our Fcal>F5 24 (39.16922> 2.62), we thereby accept our alternative hypothesis in hypothesis
one which states that: Foreign direct investment has a significant effect on the growth of the
cassava industry in Nigeria.
DUBIN WATSON
This is used to test for the presence of serial correlation in the model. However, this test is
appropriate only for the first-order auto regressive scheme. if 0 < d < 2, then there is some degree
of positive serial correlation (which is stronger if d is closer to zero). The Durbin-Watson stat is
1.400239 which shows the presence of positive serial correlation which is not considered to be
strong. As such we can accept the alternate hypothesis which states that there is a significant
5.0 Introduction
This chapter discusses the summary of the research undertaken and the findings,based on which
The primary aim of this study was to identify the impact of Foreign Direct investment on the
growth of the Cassava industry in Nigeria. The specified model was estimated using the ordinary
least square technique. Chapter one helped us introduce the subject matter by a brief background
of study.
The chapter two of this research work was centered on the review of related and relevant
literature. This is basically a discussion of past works related to the area of the research study,
literatures that have been published and written previously relating to the Cassava Industry and
Foreign Direct Investment. It had the following elements: The conceptual framework which
discussed relevant concepts of Foreign Direct Investment and the Cassava Industry, Theoretical
Framework which provided a theoretical foundation for the study and the Empirical Framework
which was a discussion of past studies relating to Foreign Direct Investment and the Cassava
Industry.
Chapter three focused on the research methods employed, it comprised the research design,
population of the study, sample size determination, sampling procedures, types of data and
sources of data, instrument of data collection, methods of data presentation, methods of data
analysis, the model specification. Chapter three also dealt with the methodology of the research
in gathering of secondary data to be used for the research. The source of secondary data was
primarily the CBN statistical bulletin. Other sources of Data were the publications of the Central
Bank of Nigeria (CBN) namely; CBN Statistical Bulletin, CBN Annual Reports, and National
Bureau of Statistics. The variables for which data will be sourced include Cassava Industry
Output, Foreign Direct Investment in the Cassava Industry, Commercial Bank Credit to the
Cassava Industry, Trade Openness, exchange rate and interest rate from the period 1988 to 2017.
While in chapter four presented the information/data in an organized manner numerically for
easy comprehension. The ordinary least square technique was used to analyze the findings
Therefore, chapter five considered the summary of the findings made, the conclusion and
recommendations based on findings and for the contribution to future advancements in various
From the data presentation, analysis and interpretation the following findings were derived:
1. The significant determinants of the growth of the cassava industry in Nigeria are the level
of Foreign Direct Investment in the Cassava industry, the trade openness of Nigeria and
2. There is no causal relationship between the Foreign Direct Investment and Growth in the
Cassava industry.
3. There is a significant effect of FDI on the growth of the Cassava industry in Nigeria
5.3 Recommendation
For the level of growth in the Cassava industry in Nigeria to be improved the following must be
1. The government should create tax cuts policies for foreign investors. This will encourage
2. The government should create an enabling business environment for foreign investors to
thrive. One of such ways they can do that is providing constant power supply, fixing
major roads and other means of transportation and also creating a stable political
environment.
3. The government should create policies that are geared to reduce the exchange rate burden
on companies in the Cassava industry. A reduction in the exchange rate will likely
encourage an increased inflow in foreign direct investment into the Cassava industry.
4. The government should enable anti-corruption bodies like the Economic and Financial
foreign investors
5. The government should encourage foreign investment by improving the human capital in
Nigeria. By increasing expenditure on education and health the human capital of Nigeria
will be improved.
5.4 Conclusion
There is no doubt about the importance of the Agricultural industry in the Nigerian economy. It
has been mainstay in generating revenue for the country and providing employment for its
populace. However, one of the major pillars of the agricultural industry in Nigeria has been the
cassava industry and it has been experiencing a decline in it growth rate in recent years. The
findings of the study showed that the major way to boost the growth of the Cassava industry in
Nigeria is by increasing Foreign Direct Investment flows into the industry, by making Nigeria a
country that is open to international trade with few trade barriers and by improving the exchange
rate of the Nigerian economy. Therefore it can be concluded that there is a significant impact of
In the view of further research, more studies can be carried out on the impact of Domestic
Investment on the Cassava industry. Further studies can also study the impact of FDI on inflation
rate.