Taking Control of Foreign Investment: A Case Study of Indigenisation in Nigeria

Abstract

THIS article examines the efforts of one developing country to reduce the role of foreign investments in its national economy. It looks at measures taken by the government of Nigeria to increase Nigerian control over the economy between 1972 and 1990, in particular at the indigenisation programme undertaken by the government through the provisions of the Nigerian Enterprises Promotion Decrees (NEPDs) of 1972 and 1977,1 and its subsequent modification and partial repeal in the 1980s, culminating with the NEPD 1989. It is hoped that this will provide some insight into the problems faced by host developing States in their efforts to gain control over private foreign investment. Some conclusions will be drawn about the usefulness of indigenisation as a tool in this respect. This article begins with a discussion of the policy of indigenisation and the background to its adoption in Nigeria. The provisions of the indigenisation Decrees, the NEPD 1972 and the NEPD 1977, are then examined and a number of problems are identified. An account is then given of the subsequent relaxation of the programme, beginning in 1981 and culminating in 1989 with the NEPD of that year. Indigenisation is then examined in the context of international law and, finally, some conclusions are drawn regarding its effectiveness as a mechanism for enhancing national sovereignty in the economic sphere. I attempt to state the law of Nigeria as at 1 June 1990.