THE INFLUENCE OF MULTINATIONAL COMPANIES IN THE ECONOMIC DEVELOPMENT OF NIGERIA (A CASE STUDY OF GUINNESS NIGERIA PLC BENIN CITY)

ABSTRACT

The main focus of this research work is to examine the influence of multinational companies in the economic development of Nigeria. In this project, the objectives of this work is to ascertain the extent of involvement of multinational companies in the economic development of Nigeria using indices like employment provision, transfer of technology and to determine the political, social-economic implications of their existence in Nigeria. All these were discussed in chapter one. In chapter two, related literatures were reviewed. The literature encompasses of people’s view on the activities of multinational corporations. Chapter three consists of research design and methodology. The sources of data used were primary and secondary sources. The primary sources include the use of oral interview and questionnaire while newspapers, journals, textbooks, symposia were source of secondary sources. In chapter four, the information collected were presented and analyzed and the hypothesis were equally tested in which it was discovered that the MNC’s are not interested in Nigeria economic development but are interested in exploiting the Nigeria’s economy. In chapter five, the recommendation made is that Nigeria should develop her own indigenous technology that will aid her in her search for economic development.

TABLE OF CONTENTS

Title Page                                                                                

Certification                                                                                      

Dedication                                                                     

Acknowledgement                                                                   

Abstract                                                                                  

Chapter One: Introduction

1. Background to the Study                                                       
2. Statement of the Problem                                                       
3. Research Questions                                                                
4. Objective of the Study                                                   
5. Statement of Hypotheses                                                        
6. Scope of the Study                                                                  
7. Significance of the Study                                                        
8. Limitations of the Study                                               
9. Operational Definition of Terms                                    

Chapter Two: Literature Review  

1. Introduction                                                                           

2.2     Schools of Thought about Multinational Company       

2.3     The Moderates School of Thought                                          

2.4     Economic Effect of Multinational Corporations             

2.5     The Negative Effect                                                                  

2.6     Political Implication of Multinational                            

2.7     Summary of the Review                                                          

Chapter Three: Research Methodology  

1. Introduction                                                                            
2. Research Design                                                           
3. Population of the study                                                 
4. Sample and sampling technique                                   
5. Instrumentation                                                            
6. Method of data collection                                                        
7. Method of data analysis                                                

Chapter Four: Data Analysis, Interpretation and Discussion                                                                          

4.1     Introduction                                                                           

4.2     Data Presentation and Interpretation                            

4.3     Data Analysis and Hypothesis Testing                          

4.4     Discussion of Findings                                                  

Chapter Five: Summary, Conclusion and Recommendations                         

5.1     Introduction                                                                           

5.2     Summary of Findings                                                    

5.3     Conclusion                                                                    

5.4     Recommendations                                                                  

References                                                                     

CHAPTER ONE

INTRODUCTION

1. BACKGROUND TO THE STUDY

Over the years, Multinational Corporations (MNC) has been a source of controversy ever since the East India Company developed the British taste for tea and a Chinese taste for opium (Stopford, 1998). A typical multinational corporation (MNC) normally functions with headquarter that is based in one country, while other affiliates are based in locations in other countries.

In some circles, a multinational corporation is referred to as a multinational enterprise (MNE) or a transnational corporation (TNC) (Tatum, 2010).

They enter host counties in different ways and different strategies. Some enter by exploiting their products to test the market and to find whether their existing products can gain sizeable market share for such firms, they rely on export agents. These foreign sales branches or assembly operations are established to save transport costs because there is a limit to what foreign exports can achieve for a firm owing mainly to tariff barriers and quotas and also owing to logistics on cost of transportation. Most of the firm are encouraged by the low wage rates and other environment factors. To meet the growing demands in the foreign countries the firm considers other options such as licensing of foreign direct investment which are critical steps. Some continue with export even when they have settled for the FDI option. The idea of multinational corporations has been around for centuries but in the second half of the twentieth century multinational corporations have become very important enterprises.

There is a risk that multinational corporations facilitate patronage problems in resource rich countries, exacerbating the resource curse. Multinational Corporations (MNCs) in service industries have given this sector large and growing impact on the global economy (Goerzen & Makino, 2007). The Marxists view the emergence of the multinational corporation as a historically progressive aspect of capitalism in the process of developing, at international level. The nature or objective of MNCs is maximization of profit at the lowest possible cost. Actually it is this feature that gave rise to MNCs, so the idea of investing in foreign land is not to better the lot of the host nation but to exploit as much as possible in order to develop the home country (Ozoigbo & Chukuezi, 2001).

These multinational corporations are very rich in all ramifications because of the profit they make in Nigeria. For instance, Nigeria is one of the largest producer of oil in the world which accounts for over 80% of her income since this sector of the economy is effectively controlled by multinational corporations who make enormous profit from the industry, one expects that that should spearhead the developmental process of Nigerian.

But unfortunately, the reverse has been the case. Most multinational companies have been fingered on several occasions playing active roles in the underdevelopment of Nigeria.

1. STATEMENT OF THE PROBLEM

The multinational company is an agent of development in the sense that they constitute the source of capital investment, employment for the people technological transfer etc.

It has been observed that multinational corporative have not contributed to the economic development of Nigeria. They have been seen as agent of economic distribution as well as economic bodies. Most of their activities in Nigeria have not led to the development of Nigeria because their interest is not to make Nigeria self dependent but to exploit the economy of their advantage. Thus, multinational corporative have adopted newly strategies to achieve this goal. There is significant relationship between government policy and multinational companies to economic growth but to what extent that has been achieved is yet to be determined.  

1. OBJECTIVE OF THE STUDY

The main objective of this study is to;

1. Find out if multinational companies contribute to economic development of Nigeria.
2. To ascertain if there is any significance relationship between government policy and multinational companies to enhance economic development of Nigeria.
3. To highlight the consequences of ignoring the motion of multinational co-operation in Nigeria.
   1. RESEARCH QUESTIONS

The study will determine the following questions;

1. Does a multinational company contribute to economic development of Nigeria?
2. Is there any significance relationship between government policy and multinational companies to enhance economic development of Nigeria?
3. Does multinational corporations in Nigeria has political and socio economic consequences?

1. STATEMENT OF HYPOTHESIS

Hypothesis One  

Ho:    Multinational companies have not contributed to development of the Nigeria economy 

HI:     Multinational companies have contributed to the development of the Nigeria economy

Hypothesis Two

Ho:    There is no significance relationship between government policy and the multinational companies to enhance economic development of Nigeria.

HI:     There is significance relationship between government policy and the multinational companies to enhance economic development of Nigeria.

Hypothesis Three

Ho:    Multinational corporation (MNC) operating in Nigeria have no political and socio economic consequences.

HI:     Multinational corporation (MNC) operating in Nigeria have political and socio economic consequences.

1. SCOPE OF THE STUDY

This study generalizes the role played by the different multinational companies but will focus attention on Guinness Nigeria Plc to enable the research have accurate and careful examination of the study. This study will also go a long way to highlight the parts played by multinational companies by studying how they are financed, how they make their profits and how the profits utilize the extent  they have transferred their technological skills to the host country.

How they have helped in solving unemployed and other social responsibilities problems in Nigeria.    

1. SIGNIFICANCE OF THE STUDY

Since 45 years after political independence, Nigeria still remains a mono product export economy exporting only raw materials and crude oil.

Since Guinness Plc aim is to develop the country, how far has it achieved this aim?

How many people acquire the technological skills which its claims to transfer to Nigerians. This study will expose to the policy makers and economic planners both at private and public sectors the negative and positive effects of the company’s activities.

It will also help the government to re-structure their relationship with multinational corporations.  

1. LIMITATIONS OF THE STUDY

One of the problems encountered was the attitude of the respondents towards the research, some misinterpret the exercise thinking it was a set up, in short, there was lack of co-operation from the respondents, the researcher had to implore total loyalty so as to obtain the desired information.

The researcher had problems in obtaining relevant data. The company did not give enough data and relevant information.

Another problem encountered by the researcher was that he had to combine full time academic study with the research and this slowed down the pace of work   

1. OPERATIONAL DEFINITION OF TERMS

1. Multinational National Enterprises (MNE): This is a cross border national business organization or aggregate of organization that are characterized mainly by the disposal of their managerial ability among several nations.
2. LDC’s: Less Developed countries of the world
3. Trans-National Company: This is a multinational organization managed and owned by person of different nationalities.
4. Supernational: This is a transnational firm that is legally denationalized by firm that is legally denationalized by firm that is legally denationalized by becoming incorporated through an international agency.
5. Parent Company: A parent, which owns and control foreign direct investment.
6. Head Office: The central organization of the firm as posed to the foreign subsidiaries.
7. Foreign Subsidiaries: This is the corporate form, which represents the foreign direct investment.
8. International Division: This is the part of the head office with a foreign geographical responsibility.
9. International Management: The used of executive from any country operating away from their own.