IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 5, Issue 5. (Sep.-Oct. 2014), PP 23-29 www.iosrjournals.org www.iosrjournals.org 23 | Page Foreign Direct Investment as Alternative Financial Measure for Africa Development: A Case of Nigeria. Osundina, Sunkanmi 1 ; Osundina, Olawumi 2 Osundina, Kemisolai 3 And Osah, Goodnews 4 Department of Political Science and Public Administration 1 &4 and Department of Economics, Banking and Finance 2&3 , Babcock University, Ilishan-Remo, Ogun State, Nigeria. Abstract: The growing recognition of Foreign Direct Investment (FDI) as an instrument of economic development has reached a high pitch. This is because many countries and especially developing countries see FDI as an alternative financial measure to fill revenue-generation gap of government in achieving economic development. This paper provides a content review analysis of the foreign direct investment development in Africa with particular reference to Nigeria. The findings of this review suggested that the degree to which foreign direct investment helps or hurts a developing country will be heavily influenced by the policy choice of the host country. Therefore, it is recommended that for Nigeria to attract the desired level of FDI, it must have strong based institutions that promote justice, adherence to regulatory framework, and safe haven for congenial business environment. There must be political stability to encourage inflow of capital flight in diaspora and concerted effort to develop infrastructure. Key words: Foreign Direct Investment, Economic Development, Policy-based, Nigeria I. Introduction There is a growing recognition among developing countries of the crucial role of Foreign Direct Investment (FDI) as an instrument of economic development. In time past, most African leaders and governments in Nigeria have not focused much attention on investment especially foreign direct investment which will not only guarantee employment but will also impact positively on economic growth and development. FDI is needed to reduce the difference between the desired gross domestic investment and domestic savings. According to Adegbite and Ayadi (2010), FDI helps fill the domestic revenue-generation gap in a developing economy, given that most developing countries’ governments do not seem to be able to generate sufficient revenue to meet their expenditure needs. FDI has been defined by many scholars and organizations but for the purpose of this research, it will be referred to as “An investment based in one country acquires an asset in another country with the intent to manage that asset” (OECD, 2000). It is important to understand the significance of FDI in global trade and in economic development. Also it is important to understand the shift in FDI towards the developing world, and the future trends of FDI. The global stock of FDI at the end of 2004 stood at $9 trillion which is equal to the current combined GDP of the four largest economies of the world after USA-Japan, China, Germany, and the United Kingdom. (WIR, 2005). International production is expanding, with foreign sales, employment and assets of transnational corporations (TNCs) all increasing. TNCs’ production worldwide generated value added of approximately $16 trillion in 2010- about a quarter of global GDP (UNCTAD 2011). Falki (2009) while contributing on the effect and advantages of FDI to the host economy noted that the effects of FDI on the host economy are normally believed to be increase in employment, augmenting the productivity, boost in export and amplified pace of transfer of technology. Furthermore, FDI facilitates modern techniques of management and marketing, eases the access to new technologies, foreign inflows can be used for financing current account deficits, finance inflows from FDI do not generate repayment of principal or interests (as opposed to external debt) and increase the stock of human capital via on-the job training. Many African States are availing and making use of the window opportunity provided by FDI into their economy. Countries like South Africa, Uganda, Nigeria and Zimbabwe are in the fore front of this development. In fact, one of the pillars for launching the new partnership for Africa’s development (NEPAD) was to accelerate FDI in-flows to the region (Funke and Nsouli, 2003). In 2006, about 40 African countries introduced 57 new measures affecting FDI, of which 49 encouraged inward FDI (UNCTAD, 2007). The increase in FDI inflows largely reflected relatively high economic growth and strong corporate performance in many parts of the world (UNCTAD, 2008). Various classifications have been made of foreign direct investment (FDI). For instance, FDI has been described as investment made so as to acquire a lasting management interest (for instance, 10% of voting stocks) and at least 10% of equity shares in an enterprise operating in another country other than that of