Wednesday, 1 February 2017

how foreign direct investments promote economic growth

In  the study of Economics,importation of foreign goods and services is an enemy to national economic growth,whereas exportation of goods into another country means well to any national economic growth . What about foreign direct investment? Does it promote or kill economic growth? I don't know. Let's find out.

Foreign direct investments are businesses set up by foreigners from any country,in another country,state,or nation. Whenever foreign direct investment is set up in another country,the indigenes  are the majority of employees,in that business. This means a  lot of employment opportunities to  citizens and indigenes of the state where such direct foreign investment is set up.

One major thing that gives money to any country, helping it to grow is taxation. Apart from the taxes which government collects from  individual residents who are of age,government also receives a greater part of it from investors whether they are foreigners or citizens. In this way,government is able to run the affairs smoothly,as long as they are financially capable.

No investment is without the benefit of development. This involves the provision of electricity,accessible road,and water in the area or town where the investment is being set up. Then,areas,where there has never been water or light or good road will be able to enjoy such wonderful social amenities,because of the adventure of direct foreign investments. Can't we say that this is how foreign direct investment promotes economic growth?

Foreign direct investment brings about employment opportunities,job creation,provision of social amenities, promotion of locally made  products ,and inflow of money in a country ,being how direct investments promote economic growth!!!