AN EMPIRICAL ANALYSIS OF ENVIRONMENTAL IMPACT OF FOREIGN DIRECT INVESTMENT IN THE MINING SECTOR IN NIGERIA

15805 Words64 Pages
ABSTRACT
This study attempted to estimate the environmental impact of Foreign Direct Investment in the mining sector in Nigeria. It is argued that only those countries that have reached a certain income level can absorb new technologies and benefit from technology diffusion, and thus reap the extra advantages that FDI can offer. The mining industry in Nigeria is dominated by oil. Indeed, Nigeria is the largest producer of this commodity in Africa and sixth largest producers in the world. This research study makes use of secondary data. The variables used are the Foreign Direct Investment (FDI), gross domestic product (GDP), output of mining industry and per capital flight (KF). This study covers a period of 31 years that spans between
…show more content…
FDI within mining sector can therefore have significant impacts, positive, as well as negative. Positive impacts can include increased employment, better health care, improved infrastructure and schooling. On the negative side there may be disruption of traditional cultures, environmental degradation, basic commodity price increases, population displacement, land use conflicts and loss of livelihood (Danielson and Lagos, 2001).
This is particularly true for the environment. Preliminary evidence suggests that under appropriate framework conditions, foreign investments in mining frequently have higher environmental performance compared to domestic operations, due to new technologies and practices they bring with them. On the other hand, when these framework conditions, such as effective environmental regulation and transparent public governance, are not in place, there is a risk that serious environmental and social damage can occur.
The mining industry has in recent years turned its attention to the environmental impacts of its activities, and in particular is addressing the issue through the Global Mining Initiative (www.globalmining.com) and the Mining, Minerals and Sustainable Development Project (MMSD) which is addressing the issue of the contribution of the mining sector to sustainable development

More about AN EMPIRICAL ANALYSIS OF ENVIRONMENTAL IMPACT OF FOREIGN DIRECT INVESTMENT IN THE MINING SECTOR IN NIGERIA

Get Access