The Study On Political Risk And Foreign Direct Investment In Telecommunications Industry Of Nigeria

The objective of this study is to empirically investigate the relationship between political risk and foreign direct investment in Nigeria with main focus on the telecommunication sector being the second sector with highest recipient of FDI in the country.In order to achieve the above objectives,the study used time series national level data in analyzing the impact of the three adopted proxies of political risk on the level of FDI inflows in the telecom sector in Nigeria beginning from 1999 when the reform policies commenced to year 2018.The study made use of the ordinary least square techniques to analyze the data.The findings from the studies revealed that the explanatory variable of political instability(POLS)poses an inverse influence on FDI inflow indicating that higher political instability has the tendency of reducing the FDI inflow,but not significant as election in the country is every four years.The result also showed that there is positive relationship between political corruption(CORP)and FDI inflows in the countries‘ mobile communication segment during the time captured by the study.From the third hypothesis,the result showed that the impact of rule of law(RL)on FDI inflows is positive,but not statistically significant.The outcome of the three controlling variables(NRS,GDP and MS)showed that all three have significant effects on FDI inflows.However,they vary in terms of the direction of their relationships with the dependent variable of FDI.The study therefore recommended that government should encourage local investors in investing in the sector,initiate policies that discourage corrupt practices and also ensure high adherence to rule of law.