Legal uncertainties and foreign direct investment: a case study of Nigeria

Among the challenges for investors wishing to do business in Africa is the lack of legal certainty and rule of law which exists in many of the African countries. The lack of infrastructure, inefficient legal and regulatory systems, as well as unstable political and economic crises, have in the past and at present deterred potential investors and inhibited foreign direct investment inflows. A negative result of this is the impediment to sustainable economic growth and development. Within the global or regional area, legal systems affect cross-border business transactions for individuals and domestic and multinational corporate investors through the number of legal provisions and processes involved.

A central function of the state, apart from its primary duty of care for its citizens, is to create and enforce rules that support economic growth. This article examines the legal uncertainties faced by multinational investors in Nigeria.