Pick A Country Preferably Not Your Country Of
Pick A Country Preferably Not Your Country Of
Follow the topics below and do a research of the environment on that country. In this class, you will act as an international manager and you are ready to do an investment in the country you researched. As you already learned after reading chapter 1, a skillful global manager cannot develop an effective plan to consider an investment abroad unless a deep study of the environment of that country is done.
Write a report/essay indicating an investment that could be successful in the country you chose. Explain the effect of the environment on your investment and the sustainability of that nation to carry business.
Topic to cover while researching the environment:
- Political Environment:
- Form of government
- Political Stability
- Role of Military
- Level of terrorism
- Restrictions Exports/Imports
- Economic Environment:
- Economic System
- State of development
- Economic Stability
- GNP
- Foreign investment
- Regulatory Environment:
- Legal System
- Protectionist laws
- Tax Laws
- Protectionism for proprietary property
- Environmental Protection
- Technological Environment:
- Level of Technology
- Infrastructure
Paper For Above instruction
In choosing a country for potential foreign investment, Nigeria presents a compelling case owing to its substantial economic and strategic position within Africa. Nigeria's environment across political, economic, regulatory, and technological dimensions offers both opportunities and challenges that a global manager must understand thoroughly to succeed.
Political Environment
Nigeria operates a federal republic with a presidential system, where power is divided between the federal government and 36 states. The political environment is characterized by relative stability since the end of military rule in 1999, although issues like corruption, political violence, and ethnic tensions persist (Alao & Sulaimon, 2017). The role of the military has diminished in political affairs, but it remains a significant actor in national security. Terrorism, primarily associated with Boko Haram in northeastern Nigeria, affects stability and foreign investment confidence. Despite these challenges, Nigeria has made efforts to liberalize trade and reduce restrictions on imports and exports, aiming to foster a conducive environment for business growth.
Economic Environment
Nigeria's economic system is predominantly market-oriented, heavily reliant on oil exports, which account for a significant portion of GDP and government revenue. While the nation is classified as a developing country, recent efforts to diversify the economy toward agriculture, manufacturing, and services are underway (World Bank, 2020). The country has experienced economic instability due to fluctuating oil prices but maintains a relatively high GNP per capita among African nations. Foreign direct investment (FDI) has increased in sectors like telecommunications, banking, and agriculture, driven by government incentives aimed at improving the investment climate (UNCTAD, 2021). Nonetheless, infrastructural deficiencies, inflation, and currency volatility pose risks that need careful management.
Regulatory Environment
Nigeria's legal framework includes the 1999 Constitution, which provides protections for property rights, but enforcement remains inconsistent. Protectionist laws exist to safeguard local industries, sometimes creating barriers for foreign firms. Taxation policies are evolving, with efforts to streamline tax collection and reduce corruption. The government emphasizes protecting proprietary rights, but bureaucratic inefficiencies and corruption can complicate compliance (Ogunleye & Akinwale, 2018). Environmental regulations are also developing, primarily focusing on resource management and pollution control, which can impact industries like manufacturing and agriculture.
Technological Environment
Nigeria's level of technological development is advancing, particularly in telecommunications and mobile banking, where it is considered a leader in Africa. Nonetheless, infrastructural challenges such as inconsistent electricity supply, limited transportation networks, and underdeveloped technological infrastructure hinder broader technological progress (Adeoye & Fabunmi, 2018). The government and private sectors are investing in improving infrastructure, recognizing that technological advancement is crucial for economic diversification and attracting FDI.
Implications for Investment and Sustainability
Considering Nigeria's environment, investment opportunities abound in sectors like telecommunications, renewable energy, agriculture, and manufacturing. The political stability, although relatively recent, improves confidence, but potential investors must prepare for security risks and navigate complex regulatory frameworks. Economic diversification efforts support the sustainability of investments by reducing reliance on oil revenues. Environmental regulations, although still maturing, reflect Nigeria's commitment to sustainable development, which is critical for long-term viability.
Successful investment requires localized strategies that consider Nigeria's unique political and economic landscape, respect legal frameworks, and leverage technological advances. Developing partnerships with local stakeholders and engaging with community programs can further enhance sustainability and social acceptance of foreign investments. Strengthening infrastructure and advocating for transparent governance are also pivotal in ensuring the longevity of investments in Nigeria.
Conclusion
Nigeria offers considerable prospects for global investors willing to navigate its complex environment. Its rich natural resources, burgeoning consumer market, and government initiatives to improve the business climate are substantial incentives. However, risks related to political stability, security, infrastructural deficiencies, and regulatory uncertainties must be mitigated through strategic planning and informed decision-making. As a future global manager, understanding and adapting to Nigeria’s environment will be vital to developing sustainable, successful investments.
References
- Alao, O. A., & Sulaimon, L. A. (2017). Political stability and economic development in Nigeria. Journal of African Political Economy & Development, 2(3), 45-60.
- Adeoye, O., & Fabunmi, R. (2018). Infrastructure challenges and economic growth in Nigeria. International Journal of Infrastructure Development, 10(4), 235-251.
- Ogunleye, A., & Akinwale, Y. (2018). Legal reforms and business environment in Nigeria. Nigerian Journal of Law and Business, 1(1), 34-50.
- UNCTAD. (2021). World Investment Report 2021: Investing in Sustainable Development. United Nations Conference on Trade and Development.
- World Bank. (2020). Nigeria Economic Update: Navigating Turbulence. World Bank Publications.