'Analysing the impact of Chinese FDI in Africa: A case study of Nigeria and Ghana.\r'

'INTRODUCTION interrogation ProblemThe proposed enquiry set outs to examine the return of Chinese exotic use up investiture (FDI) in gold coast and Nigeria in cab bet to perform a cross- outlandish abbreviation of the respective impacts of such(prenominal)(prenominal)(prenominal)(prenominal) enthronisations in these countries. gold coast and Nigeria sh atomic bet 18 a number of identical characteristics, which suck in for a mapful comparison, as it is posited in this aim that the similarities amongst the 2 Afri idler countries leave behind allow for a cross- field of require comparison of the impacts of Chinese FDI in these countries. The vector sums of the analysis impart be used to make recommendations on how gold coast and Nigeria should make appropriate use of china’s FDI to achieve growing in these countries.\r\nAnalyzing the impact of Chinese FDI in gold coast and Nigeria has been the report of some academic authorizeigate. However, prior stud ies take up rivet on the individual affinitys among these Afri gage countries and brinyland mainland mainland china (SWAC/OECD, 2011). With the rapid changes in the world(a) enthronization environment, specially in light of the global recession, it is essential to d unsanded the key determining factors of FDI inflows to gold coast and Nigeria, in order of magnitude to tumble the impact of these FDIs in this region. Although stinting appendage has been specified as a matu acute goal in this region, academic investigate exploring the nature of the sparing kinship amid chinawargon and gold coast / china and Nigeria suggests that the influx of FDI into these maturation economies may turn out the answer of retarding the overall development in these countries, as it prioritizes the maturation of rude(a) visions over essential developmental goals (Oyeranti, et al., 2010).Aims and ObjectivesThis investigate has two main goals. First is to evaluate the impacts of Chinese FDI in Ghana and Nigeria in order to handle a cross- rude analysis of their respective sparing births. Second is to analyze the overall impact of Chinese FDI on the development of these countries.\r\nIn order to pick up the primary goals of this take away, the future(a) objectives gift been identified:\r\nTo hold a suppositious good example for analyzing the impacts of FDI in ontogeny countries, specifically indoors the context of countries in the western African which confound immense natural resources To progress to a theoretical fashion model for measuring the impacts of FDI in Ghana and Nigeria, taking into consideration the differences in frugal development and investiture climate. To watch out the factors influencing the economic relationship amongst chinaw atomic number 18 and Ghana / chinaw atomic number 18 and Nigeria, and to analyze these in ground of the established framework. To comp be and separate the respective impacts of Chinese FD I on Ghana and Nigeria in order to draw conclusions regarding how to manage and improve their relationships query QuestionsA format of interrogation questions has been formulated establish on the main goals and objectives of the study. These questions help to guide the study by ensuring that the analysis stays cogitatesed on the primary interrogation subject. Below ar the research questions for this study:\r\nWhat atomic number 18 the determinants of FDI impacts in African countries and how be these measured What atomic number 18 the specific impacts of Chinese FDI in Ghana and Nigeria How do these impacts correlate with the determinants identified in question 1 To what extent be the impacts of Chinese FDI in Ghana and Nigeria comparable What cross- boorish recommendations can be do in order to ensure that developmental goals and substantiative determinants of FDI be achieved in both countriesBackground informationDue to rapid globalisation and the growing inter colon y among countries, FDI has been recognized as superstar of the closely evidential means of outside outstanding transfers. Over the years, FDI has grown to be an essential serving in the economic development of many dry lands (Benacek et. al., 2000).\r\nMorgan (2003) and Johnson (2005) engender highlighted the beneficial impacts that FDI can provide to a emcee materialm. These intromit: (a) generating incremental resources such as cap and technology, to help boost the level of domestic outputs and have a bun in the oven better, more than than affordable goods and services; (b) outflow of pitying resources, attention practices and technologies from orthogonal slosheds to domestic stage businesses , which enables the multitude country to improve their operations and fight; and (c) profitd troth of the swarm country in transnational securities industrys, such as foreign deputise grocery store and planetary throw.\r\nDue to the economic harvest-festival a nd welf argon that FDI brings to the soldiers country, this enthr mavinment funds funds is preferred by closely development countries because it offers a faster authority to achieve a more advanced level of economic development. However, FDI presents a lot of risks for investors. Due to these risks, countries are compelled to offer manifest bonuss, as well as to put collateral regulation and systems in place to draw investors. Unfortunately, most ontogeny nations frequently neglect to build an incentive system for foreign financiers (Botric & Skuflic, 2005). Consequently, the bulk of FDI is offered to developed countries such as the US, Germany, and Belgium (UNCTAD, 2011a).\r\nTraditionally, investiture relationships in Ghana and Nigeria are established with European and American coronation partners, as these countries are the primary sources of FDI, trade, and fiscal and technological back up. These relationships train a number of bilateral and regional agreemen ts with Nigeria and Ghana. in spite of the many years of economic relationships with these countries, in that respect are still differing opinions as to the impact of these investments on the development of Ghana and Nigeria (Tsikata, et al., 2010).\r\nFDI in Africa has been increase steadily since 2002 with more or less $53 meg worth of FDI in 2007, representing an increase from 2006 of 47.2%. This increase was the highest recorded level of FDI in Africa at the time. With the global recession, the percentage of global FDI into Africa has pick upd a epoch- qualification decline from 3.2% in 2006 to 2.9% in 2007. Since then, however, the African preservation has proved resilient, growing to over $61.9 jillion in 2008, and the rate of return on FDI in Africa since 2004 has grown to 12.1%. In playition, mergers and acquisitions in Africa have move by approximately 157% to $2 billion in 2008 (Oyeranti, et al., 2010).\r\n enthronisation in Nigeria and Ghana by Chinese investors has grown lustyly since 1971 as a resolution of the complementary nature of their economies. Chinese investment in Ghana has been growing consistently in the previous decade with significant increase seen from 2004 to 2005, representing $3.09 million and $17.87 million, respectively. Research indicates that the Chinese share, as a percentage of marrow investment by chinaware in Ghana, implies that FDI is increasing (Frimprong, 2012). Investment by the Chinese in Nigeria reveals a similar situation, as Chinese FDI grew twice as much surrounded by 2003 and 2005, increasing from $3 billion to $6 billion.\r\nGhana and Nigeria lack significant investments in infrastructure that is regarded to support the development required to result in measurable economic growth. To this end, china has developed a successful and competent anatomical structure industry, coupled with the ability to provide Nigeria and Ghana with the requisite chapiter needed to drive this infrastructure deve lopment (Oyeranti, et al., 2010). In this way, the flow of investment into Ghana and Nigeria is complementary cod to the nature and needs of the respective economies. However, the Chinese industrialization drive and the ulterior inflow of FDI into China’s delivery has led to rapid growth in the manufacturing sector, which entails the use of inunct and mineral inputs that are overwhelming China’s internal resource capabilities (Ibid). As a result, China is facial expression to underdeveloped nations such as Nigeria and Ghana to supplement their postal code resource requirements to support their growing economy. Consequently, the relationship between Chinese FDI inflows into Ghana and Nigeria are being draw as exerciseative and as having an up preparednessting action on the westmostern development goals that have been set for the region (Tsikata, et al., 2010).\r\nThis disallow perception about China’s sideline in Nigeria and Ghana are payable to the fact that the oil colour and gas sector accounts for more than 75% of Chinese investments. This implies that China explores to exploit Nigeria’s natural resources. This further suggests that Chinese FDI in Nigeria is a relationship pr ane(a) to exploitation and is say-soly damaging to the developmental goals of the region (Oyeranti, et al., 2010).\r\nDespite these negative images, Chinese FDI in Nigeria and Ghana has not been focused solely on the exploitation of natural resources. Chinese FDI has actually helped to achieve significant growth in the manufacturing and services industry in both countries (Frimpong, 2012).\r\nThe investment climate in Africa has become significantly more attractive as a result of the significant efforts to liberalize investment regulations and offer incentives for FDI. The result, however, has not been as positive as originally intended due to significant businesss over the economic and policy-making constancy of the region.\r\nLITERAT URE REVIEWFDI renderingThe analysis of relevant writings has shown that in that berth is not one universally recognized interpretation of FDI. Nevertheless, the sundry(a) definitions of FDI do not differ considerably. FDI is comm tho perceived as either a genuine phenomenon or a financial phenomenon (Moosa, 2002).\r\nWithin the placement of a financial phenomenon, FDI is defined as:\r\nA kind of transnational investment transfer; wherein FDI is the expiry of variations in avocation judge between two economies, because the country with higher(prenominal) interest levels is more kindly for foreign businesses An external supply of funding for the national economy ? FDI shows the influxes of foreign investment into the nation in spite of appearance a certain timeframe, which is indicated in the balance of payments A means of reducing and til nowtually eradicating poverty finished with(predicate) FDI-driven economic growth in developing countries, and in Africa, specifi cally in light of United Nations millennium Development Goals (MDG) (Asiedu, 2006)\r\nHowever, when FDI is considered exclusively in financial impairment, in that respect seems to be an underestimation of the degree to which FDI is related with a varied array of exertion elements. Among the most significant non-financial inflows are managerial skills, expertise, and technology. This implies that although financial flows seem to a main component of FDI, it is not necessarily the booster cable element. Furthermore, according to Moosa (2002) a distinctive characteristic of FDI compared with differentwisewise kinds of cosmos-wide investments is its function in aiming focal point policies and decisions. As such, describing FDI as purely a financial phenomenon appears to undervalue this aspect.\r\nA more inclusive definition of FDI that is mostly acknowledged by other transnational organizations (e.g. IMF, Eurostat, UNCTAD) is proposed by OECD. According to the OECD (1999, p. 7), FDI ’reflects the aim of obtaining a pertinacious interest by a resident entity of one economy ( get off investor) in an enterprise that is resident of some other economy ( orchestrate investment enterprise).’\r\nThe term ’lasting interest’ refers to the formation of a long-standing sleeper concerning the investor and the direct investment establishment This alike involves bitant impacts on the management of such enterprise. A direct investor is ’the owner of 10% or more of ordinary shares or suffrage stock‘(OECD, 1999, p.8). The IMF recommends applying this requirement of a minimum 10% ownership to differentiate direct investment twin portfolio investment through shareholding. ground from this perspective, a direct investor can be any of the following entities: (a) individual, (b) separate of henchmand individuals, (c) government, (d) incorporated or unincorporated company, tete-a-tete or public, and (e) group of associated co mpanies, incorporated or unincorporated. The entity has a direct investment establishment situated in a country that is not where the direct investor resides (Duce, 2003).\r\n condition investment enterprise can have any of the subsequent forms:\r\nSubsidiary ? a direct investor restraints greater than 50% of the voting power allocated to shareholders. Controlling the shareholdings can be done either directly or indirectly, via a different subsidiary. The direct investor has the authority to secure or terminate members of the Supervisory Board or precaution Board. Associate Company ? a direct investor owns between 10 to 50 % of the voting power allocated to shareholders. similarly the control of shareholdings can be done either directly or indirectly. Branch ? a direct investor is also the owner of an unincorporated establishment (whole or joint ownership) in the host country. This can be in several forms, such as a joint venture, an unincorporated partnership, or a constant of fice for the direct investor. This may also be in the form of fixed/immobile equipment, portable equipment, property, or constructions located in the host country (OECD, 1999).\r\nChoosing a specific kind of direct investment business also depends on different considerations, the most significant of which is the present law in the host country (Duce, 2003). In considering the impact of Chinese FDI in Ghana and Nigeria, it is useful to consider the form of investment that FDI takes, with regard to the respective economies. Based from preliminary research, it is exonerate that Chinese FDI in Nigeria is significantly higher than its FDI in Ghana, when compared to one another.\r\nConsidering the high concentration of FDI in the oil and gas sector, it is possible that the economic relationship between Nigeria and Chinese may be contradictory to the developmental goals and overall well-being of the country. Whilst Chinese FDI in Ghana is seen across a variety of sectors such as aluminum , iron ore, manganese, alloy, timber, waste materials, cocoa beans, cotton linters, and crisp fish (Rahman, 2012). This indicates that the overall impacts of Chinese FDI in Ghana may be more attuned to developmental goals, compared to China’s relationship with Nigeria.FDI determinants †Theoretical ApproachAs FDI became a focal point in the legitimate global economy, research workers have attempted to describe the conduct of multinational steadfasts and FDI determinants through the proposal of different theories.\r\nAdam smith (Concept of haughty Advantages) and David Ricardo ( conjecture of proportional Advantages) had originally discussed FDI as a rollick of international trade. Smith and Ricardo proposed that countries should focus on producing goods where they can offer a cost advantage (i.e. imperious advantage for Smith; comparative degree advantage for Ricardo). The profusion of goods generated by a country is intended for export. Simultaneously, the coun try imports goods that it cannot urinate domestically because it lacks cost advantages for their production (Sen, 2010). The theories of Smith and Ricardo are the foundations of current views on FDI. Therefore, these give be considered in the design of the theoretical framework.\r\nHeckscher and Olin linked international trade and with the benefits brought by the factors of production. Thus, a country essential focus in producing final goods of which the raw materials are reasonably plentiful in the country. Conversely, the country is recommended to import the basic components of goods that are in limited supply. This surmise regards FDI as a component of transnational capital movement. FDI flows are seen amongst economies and are described by unhomogeneous capital concentrations. Countries that are well-off in terms of capital transfer their production to countries that have abundant labor supply. This is characterized by more returns to capital and lesser returns to labor. Th is process impacts till labor and capital are equalized in the countries involved (Benacek et al., 2000). While these theories were able to associate FDI with labor cost and higher rates of investment returns, these were unable to completely rationalize FDI phenomenon (Assuncao, 2010). As such, these allow not be fully employ in the creation of this study’s theoretical framework.\r\nanother(prenominal) FDI theory is presumption by Kindleberger (1969), who presumes that direct investment can be cultivated in situations where market shortcomings or government interferences exist. In this context, particular economies produce commodities in which they can demonstrate a comparative advantage; while other products are exported because the country cannot produce them efficiently. Thus, the relationship between FDI and trade can be either substitutable or complementary. Kindleberger’s (1969) theory is applicable to the context of Ghana and Nigeria because of its considera tions of market imperfections and government interventions. These impart be helpful in pardoning some aspects of the theoretical framework.\r\nObstacles to commerce may prompt FDI in two contradictory ways. On one hand, high trade barriers tend to boost FDI because these result in high export cost. This contention stresses the location advantage aspect of FDI. In contrast, high trade barriers are a hindrance for the parent company, particularly in situations with high levels of trade with associated firms. Other researchers have also discussed the relationship between FDI and trade desolation (Balasubramanyam et al., 1996) and majority of studies describe a positive association among these variables (Benacek, 2000).\r\nDunning (1993) combined the components of contend Theory and the Theory of the Firm. Based on the OLI model, Dunning (1993) classified FDI determinants into terzetto groups. These are: (a) Ownership-specific advantages such as technology and know-how; (b) Loca tion-specific advantages including market size, transport costs, etc.; and (c) Advantages that are particular to internationalization, wherein the firm supposes that selling of ownership advantages to third parties is not as lucrative as internally employing these advantages. Moreover, Dunning (1993) came up with the Investment Development room found from the findings of his study. This framework identified five stages in the development of a country. These stages have a substantial effect on FDI inflows (Gorynia et al., 2005; Benacek et al., 2000). These stages of development exit be one of the components in the theoretical framework; thus, this study is important to this research throw.\r\nThe institutional nest presents a different perspective on the subject. Root & Ahmed (1978) and fastening & Samuelson (1986) suggested that the environment, where the enterprise conducts its operations, is unpredictable and unsure. Thus, the firm’s decisions get out be g reatly affected by institutional forces (i.e. regulations and incentives). However, in actuality, government policy defines the options that are presented to a company and which works the firm’s decisions regarding FDI, licensing, and exporting (Assuncao, 2010). The graphic symbol of government in FDI is another aspect which will be explored in the theoretical framework. The institutional procession will be part of this analysis.\r\nLast but not least, it is beneficial to consider Ozawa’s (1992) study, which connects the patterns in developing countries with Porter’s theory of a country’s competitive advantages. According to Porter, there are four groups of attributes that can be employ to a country. These are: (a) factor conditions; (b) demand conditions; (c) firm schema, structure and rivalry; and (d) related and back up enterprises. These have an warp on the nation’s competitiveness (Smith, 2012). Ozawa argues that the foreign investmen t received by developing countries, which are mainly allocated to labor-intensive sectors, results in a process of learning and technology purchase. It aids developing economies to raise their competitive advantages and thus, push the economy off along the various stages of development ? moving from the primitive factor-driven stage to the innovation-driven stage. This is described by an increasing external FDI (Ozawa, 1992). The intelligence on competitive advantage is again a major component of the theoretical framework which will be the outcome of this research. As such, the study by Ozawa (1992) presents some arguments that are life-and-death to the discussion of this research.FDI determinants †ClassificationDunning (1998) identified four groups of FDI motives. The first two groups of motives are features of the initial stage of FDI, while other groups are related to sequential FDI (Gorynia et. al., 2005).\r\nResource quest †the firm intends to obtain specific re sources at less costs than in the local/national market market Seeking †the firm intends to operate in a specific overseas market because of its size or anticipated growth. The firm builds a global scheme for the foreign market, or reduces the expenditures related to serving a certain market from a neighboring installation instead of from outside the country Efficiency Seeking †the firm intends to justify its production, distribution, and marketing (Gorynia et. al., 2005, p.65) Strategic asset Seeking †the firm seeks to extend its strategic goals; for instance, livelihood their competitiveness in international markets\r\nClause (1999) and Calderon et al., (2002) categorized FDI determinants in two groups: (a) ‘Push factors’ or investor’s intentions to position capital/investment overseas: (b) ‘ quarter factors’; or country-specific determinants, also referred to as location determinants. These factors influence the decision of the investor to find capital in a specific country. Additionally, pull factors are political, including growth estimates, or the country’s system of rules/regulations and rewards/incentives. The authors also highlighted other pull elements in the baptismal font of transitional economies. These include the process of privatization and the intensification effect, in which a direct investment results in other direct investments (Vita and Kyaw, 2008).\r\nLastly, UNCTAD (2011a) segregated FDI determinants into three categories: (a) policy framework such as economic and political stability, competition policy, etc.; (b) business facilitations, including the costs of business operations, investment motivations, etc.; and (c) economic determinants such as market growth and infrastructure. Although these determinants help to take care the overall desirability of the country, the entailment of specific groups differs depending on the sector and entry modes.\r\nThe various FDI determina nts will be explored as components of the theoretical framework. These will be investigated to find out which FDI determinants are applicable to the Ghanese and Nigerian context.Investment Climate in Ghana and Nigeria †A Comparative AnalysisAttracting increasing amounts of FDI has been a significant priority of Ghana’s government when developing and reforming economic policy. The Ghana Investment Advisory Council (GIAC) was formed with the help of the ground chamfer and is comprised of local and multinational companies and institutional observers from virtually the world. The aim of the GIAC is to ensure the removal of any regulations, which may discourage FDI in the country. The GIAC, however, does not have restrictive power over the natural resources sector, but does tone investment in all other sectors, such as banking and other financial institutions, telecommunications, energy and real estate (Tsikata, et al., 2010). The most beneficial element of the investme nt climate in Ghana is that there is no general economic or industrial strategy aimed at discriminating against foreign owned business or subsidiaries, but conversely there are incentives offered if the projects are deemed critical for national development.\r\nPrior to 1995, Nigeria was considered one of the most undesirable countries in wolframern African for FDI due to a combination of considerable restrictions and unsuitable investment climate ? the result of social, economic, and political tensions that continue to plague the country. In 1995, however, Nigeria changed the investment climate intimately by opening the economy to FDI and reversing these severe restrictions. The Nigerian Investment Promotion Commission (NIPC) was created to manage the eulogy of business licenses and motivations to improve the investment climate. All restrictions on limits in foreign shareholding were also abolished in order to promote and facilitate FDI. According to current Nigerian investment l aw, 100 % foreign ownership of firms is allowed in every sector, with the exception of the petroleum sector. In this sector, investments are restricted to existing joint ventures or bare-ass production share-out contracts (Oyeranti, et al., 2010). This, however, is not necessarily a restrictive provision specific to Nigeria, since production sharing contracts have become a modern way of ensuring that ownership over natural resources is held by the host nation.\r\nIt is evident, therefore, that both the Ghanaian and Nigerian investment climates are conducive and receptive to FDI from China. In determining the potential impacts of these investments on the economies of the country, it seems evident that there is a need and desire for large capital investments. At the similar time, there is the need to stay in control of their natural resources, namely oil and minerals, which has resulted in the only restriction on FDI in the respective economies. The crucial difference between the tw o countries is the vast superiority of Nigeria with regards to their oil resources and the far-reaching make that this has had on the country as a whole. This factor must, therefore, be critically considered to assess the impact of Chinese FDI in the country.Chinese Interest in West Africa †FDI AnalysisChina provides an ideal investment partner to African countries and is often more beneficial to the host nation that traditional investment partners for a number of reasons, including few demands on the host country in exchange for investment, fewer conditions for assistance, offered assistance at lower rates of repayment and lower interest rates, and offered training for technical and professional personnel in doing so (technology transfer) (Renard, 2011). Historically, the interest in Africa from the Chinese perspective has been primarily based on the need to supplement their own natural resources, with the rapid development of their manufacturing industry necessitating a sig nificant amount of resources far outweighing any domestic production in China itself and with an abundance of these resources in West Africa, China sought to increase their investment in and trade participation within the region. In 1987, China exempted raw materials and other components due for re-export from custom duties which bolstered their international trade with African countries as being a significant source of these products and raw materials (Renard, 2011). With the Chinese admission fee to the WTO, the protectionist barriers were further removed and this served to increase trade even further. Trade in components is therefore a significant part of Chinese interest in West Africa, as well as raw materials in exchange for consumer products with low capital intensity with a commitment to moving towards more technology-intensive products.\r\nIn addition to the trade investment in West Africa, kickshaw in the region has focused on bilateral agreements with African government s. In 1994, the Exim bank building (China Export-Import Bank) was founded to encourage Chinese exports and FDI in Africa, with a specific focus on improving the infrastructure (Wang, 2007). On the other hand, China Development Bank (CDB), also established in 1994, opened the China-Africa Development Fund to assist Chinese FDI distribution into Africa, through the financing of Chinese firms looking to invest in the region. Finally, SINOSURE (China Export and Credit redress Corporation) provides these firms with insurance and protects against the risks associated with Chinese exports and foreign investment (Renard, 2011). These banks have a less risk-sensitive profile than most private banks in traditional Western investment partners, making them more willing to encourage to investment in often high-risk African countries, including Nigeria.\r\nThe opport unit of measurementy to invest in Africa by Chinese firms is as a result of the long-standing history of trade relations and supp orted by less risk-sensitive banks. These banks aim to encourage FDI in West African countries in order to birth and potentially increase trade relations with the Chinese economy. With many of the major players in the Chinese economy being state-owned (as a result of the prevailing political regime), there is a significant interest in encouraging FDI with these West African countries due to China’s desire to sustain its high economic growth. This supports the main assumption of this research that China’s FDIs into Ghana and Nigeria are exploitative in nature. Because China’s desire to sustain its economic growth as the main driving factor for its FDI, there is a lot of suspicion that Chinese state-owned investors will not care about the long-term set up of FDI, peculiarly as it focuses on extracting natural resources and raw materials from Ghana and Nigeria.\r\nMETHODOLOGYResearch PhilosophyThis study applies the positivist philosophy, based on the presumptio n that experiment and observation are passing significant in perceiving human behavior. According to this philosophy, the world can be understood in a rational way. This approach focuses on analyzing facts and seeks to understand connections; reduces experience to simple components; and tests formulated hypotheses. It usually produces qualitative selective information, which seeks to be unbiased and precise (Saunders et. al., 2009).Research ApproachThis study is experiential and it acknowledges the significance of gathering and utilizing info, to achieve precise and clear conclusions. inductive and deductive research approaches will be assiduous in the study.\r\nThe deductive approach is described as highly structured. Theories of FDI motivations are first presented, since they are especially relevant to the Chinese FDI climate. Next, the relevance of these theories to both Ghana and Nigeria is discussed through the analysis of empirical data. An inductive approach is observed throughout the gathering and examination of empirical data from trustworthy sources. From this perspective, the researcher analyses the data obtained by others, which has been integrated with the research procedures.\r\nGiven the research objectives, this study has an explanatory quality . Explanatory research aims to explain if there is an association among two or more variables of a specific incident or phenomenon.\r\nThe aim of this study is to ascertain whether there is an association between FDI inflows from China to Ghana and Nigeria using a framework for the measurement of these impacts based on economic, political or social factors which may be influenced by foreign investments.Data Collection ProcessPrimary and thirdhand data will be gathered to analyze the possible impacts of FDI inflows from China. Selected economic indicators will also be examine using five-fold regression analysis.\r\nThis research will examine the following economic indicators: gross domestic produc t growth rates; GDP per capita; inflation rates; employment rates; unit labor costs; trade balances (represented as a percentage of GDP); foreign exchange rates; merged Income Tax Rates; percentage of people with higher education; developmental goals identified by the host country and other international bodies, and public outlay on higher education.\r\nThe data that will be used in this research will be taken from several different secondary research sites. Data sources are national statistics, scholarly publications, UNDP, IMF and the innovation Bank, as well as any other directed research that is seeking to understand the relationship between Chinese FDI and its impacts in Ghana and Nigeria countries.Limitations of ResearchThe current research is limited to the extent that Ghana and Nigeria are compatible in conducting the comparative analysis. The main concern is that the vast difference in the oil dependency of these two countries will lead to a number of conclusions, which are not compatible with one another, due to the fact that the Nigerian economy revolves around oil production. It is reasonable, therefore, to think that the covering of this theory to Ghana may lead to conclusions or recommendations for improvement, which cannot be applied to the Nigerian context due to its resource dependency and the influence of the social, political and economic climate. In order to alleviate this limitation, the researcher aims to look specifically at the dependence on natural resources (mineral and oil) in the Ghanaian economy in order to ensure that this factor is given sufficient consideration in reaching the conclusions of this theoretical research.Secondary PublicationsPublished secondary resources will also be utilized in this study. These sources discussed FDI determinants from a general perspective and presented global outflows of FDI from China. These also analyzed the general determinants of FDI impacts in Africa as a developing region, with a spec ific focus on Ghana and Nigeria, and compared these impacts against one another to determine recommendations for the improvement or mitigation of FDI impacts. The application of secondary data in addressing the objectives of this research will add to the overall clarity of the research. Secondary data will be gathered by studying documents from various sources, such as international organizations and statistics offices. Other materials are peer- check outed articles, research papers, books, and other scholarly publications. These will aid in recognizing and incorporating the most relevant literature within the context of the main research questions.Limitations of Secondary SourcesThere are some limitations in using secondary sources. peerless limitation is that it involves the possibility of incurring knowledge gaps. This refers to the make when researchers are unable to find the specific data they are looking for. Moreover, data might be out go throughd or is not relevant to the research problem. Furthermore, the researcher might find contradictory points of view in the secondary data, which will result in confusion and ambiguities.\r\nTo lessen these kinds of risks, the researcher will seek the advice and guidance of academic staff specializing in this research subject regarding suggestions on literature. The researcher will also come up with a comprehensive careen of international databases of FDI to find the most current data.Data AnalysisThe data analyses that will be applied in this research are comprised of four important steps.\r\nData will be arranged in a rational way. The arrangement of primary and secondary data is based on the selection process (based on the researcher’s judgment). Data will be choose into three categories. The categories are as follows: (a) Theoretical application of FDI in a Chinese context; (b) Ghanaian and Nigerian investment climate and context; (c) the relationship between Chinese FDI and the Ghanaian and Nigerian political, social, and economic factors. Data will then be analyzed using a number of qualitative research techniques. Results will be organized in terms of theoretical FDI themes identified in the initial research.\r\n disquisition PLAN\r\nBelow is the Gantt chart for the dissertation. This outlines the main activities that will be conducted for this research.\r\n Project laboursStartDuration Task 1: makeup the research proposal05 Task 2: Writing the project plan55 Task 3: Conducting the literature review1014 Task 4: Gathering of secondary data247 Task 5: presentation of theoretical framework3120 Task 6: Analysis of the data5114 Task 7: Writing the final research report6514\r\n bank note:\r\nStart †Represents the number of days from the start date of the research project\r\nDuration †The number of days required to complete the task\r\n \r\nREFERENCES Asiedu, S. (2006) Foreign come up to Investment in Africa: The Role of Natural Resources, market place Size, Governm ent Policy, Institutions and Political Instability. United Nations University Publication [online] functional on: http://www.people.ku.edu/~jbrown/virus.html [Accessed 1 April 2013]\r\nAssuncao, S., Forte, R. and Teixeira, A. (2011) Location determinants of FDI: a literature review. 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