AN ANALYSIS OF THE REGULATORY LEGAL FRAME WORK FOR FOREIGN INVESTMENT IN NIGERIA: ISSUES AND CHALLENGES
What provoked this research is the visibilly wanning national Sovereignty and Jurisdiction of developing Countries to make choice from options in economic, social and cultural policies due to globalization. The need to unravel the challenges the regulatory Legal Frame Work for Foreign investment in Nigeria faces, its impact on our national policies and policy making mechanisms and finding solutions. The methodology employed in this research is the doctrinal research. Primary and secondary materials sourced are analyzed. Foreign investment involves the transfer of a package of resources including capital, technology, management and marketing expertise. This can generally be divided into, Foreign Direct Investment (FDI) and Portfolio Investment (PI) although loans to government (i.e. foreign debts) have also been seen as a third category. The purpose of FDI is to acquire a lasting interest and effective control in the management of an enterprise without necessarily having majority shareholding. Portfolio Investments on the other hand, are directed at earning dividends, interests, capital gains and so on without participating in management. The Multinational Corporations (MNCs) are major sources of foreign direct investment (FDI). The regulatory Legal Frame Work is the power of host country through its law and regulatory bodies, authorities, and agencies to control investment activities by providing conditions that affect the behaviour of investors and development of investment to ensure fair and beneficial operations. These agencies including the Nigerian Investment Promotion Commission (NIPC), National Office for Technology Acquisition and Promotion (NOTAP) and Nigeria Oil and Gas Industry Content Development. The regulatory Legal Frame Work for foreign investment in Nigeria is confronted with many issues and challenges which make it impossible to achieve the objectives of government to regulate foreign investment, such as globalization of policy-making which has led to the erosion of national sovereignty, narrowed the ability of governments and people to make choices from options in economic, social and cultural policies; negative influence of the multinational corporations (MNCs) over government policies, lack of commitment on the part of government, non enforcement of penalties and inadequate penalty regimes, ineffective administrative systems and blind adoption of economic terms “dictated” by global markets and international institutions amongst others. Considering that the regulatory legal frame work plays a crucial role in the economic life of the nation, government should pay adequate attention to it. Consequently, investment policies and regulations should be backed by law to enhance enforcement. The findings indentified in this work show that the penalties in Nigerian Investment Regulatory Frame Work such as Section 55 CAMA and Section 15 (1)(2) NOTAP are inadequate and do not have the force of deterrence. Procedure for exemption of Foreign Company from registration in Nigeria under Section 56 (1)(a)-(d) to the effect that such application should be made to the Council of Ministers through the Secretary to the Government of the Federation. The procedure is unnecessarily cumbersome and time wasting and will discourage donor international organizations and countries willing to undertake specialist projects under contract with any of the Governments in the Federation or their agencies. The National Office for technology Acquirsion and promotion (NOTAP) Act provides for the agency to vet agreements to be submitted to it by Nigerian Companies after negotiating and concluding with the Foreign technical partners and leaves much to be desired in the quest for maximum benefit from technology transfer and Foreign Investment in Nigeria.