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As   the   world   economy   continues   to   become   more   globalized,   foreign   direct  investment   (FDI)   continues   to   gain   prominence   as   a   form   of   international  economic   transactions   and   as   an   instrument   of   international   economic  integration.   In   recent   years,   developing   countries   like   Nigeria   with   large   home  markets  and  some  entrepreneurial  skills  have  produced  large  numbers  of  rapidly  growing   and   profitable   multinational   enterprises   (MNEs).   These   MNEs   are   like  their   counterparts   in   other   countrirs,   looking   for   markets   where   they   have  comparative   advantage   to   invest   in.   It   is   therefore   important   to   create   the  conditions   that   would   attract   FDI   from   such   MNEs.   In   this   context,   this   study  outlined  the  reasons  why  some  Nigerian  enterprises  decide  on  outward  FDI,  their  levels   of   success,   and   what   other   countries   particularly   in   sub-­‐Saharan   Africa  must   do   to   attract   FDI   from   Nigeria.   It   also   examines   the   flow   of   FDI   to   Africa  since   the   1970s   and   examined   the   determinants   of   FDI   with   a   view   to  understanding   whether   the   existing   policy   and   operational   framework   are  sufficient   for   attracting   investments.   It   further   discusses   the   factors   that  influence  FDI,  the  role  of  FDI,  FDI  trends  in  Africa,  sectorial  allocation  of  FDI  in  Africa,  why  Africa  has  lagged  behind  in  receiving  FDI,  and  the  various  modes  of  entry.  The  study  ends  with  clear  recommendations  for  MNEs  and  policy  makers       1.  INTRODUCTION  Over   the   last   decade   and   a   half,   the   world   has   witnessed   the   phenomenal   rise   of   the  Nigerian   multinational   enterprises   (MNEs)   in   various   sectors.   MNE   in   this   context   is  viewed   as   one   that   has   operating   subsidiaries,   branches,   or   affiliates   located   in   foreign  countries.   It   also   includes   firms   in   service   activities   such   as   consulting,   accounting,  construction,  legal,  advertising,  entertainment,  banking,  telecommunications,  and  lodging  (Eiteman   et   al.,   2010).   MNEs   have   global   outreach   and   many   of   them   are   owned   by   a  mixture  of  domestic  and  foreign  shareholders.  Many  indigenous  Nigerian  companies  have  developed   beyond   expectations   and   having   captured   large   shares   of   the   Nigerian   home  markets,   decided   to   tap   into   global   markets   with   increased   competitive.   They   have  expanded   into   other   parts   of   sub-­‐Saharan   Africa   including   and   stretches   into   Europe,  North   America,   Asia   and   the   Middle   East.   Instead   of   waiting   to   receive   foreign   direct  investment  (FDI)  from  the  western  nations  as  is  usually  the  norm,  Nigerian  companies  are  on  the  move,  spreading  their  tentacles  into  other  Afican  countries  countries  and  the  world  over,  a  hitherto  reserved  place  for  the  European  and  American  companies.  Most  of  the  FDIs  by  Nigerian  companies  have  been  in  the  financial  services  sector,  for  example  First  Year: 2014 Volume:1 Issue: 3 Bank  of  Nigeria  Ltd  has  opened  offices  in  South  Africa,  the  Democratic  Republic  of  Congo  as  well  as  in  London,  Paris,  Beijing  and  Abu  Dhabi  (First  Bank  of  Nigeria  Plc  2011).  GTBank  has  offices  in  Cote  d’Ivoire,  Gambia,  Ghana,  Liberia,  Sierra  Leone,  and  the  United  Kingdom,  while  United  Bank  of  Africa  (UBA)  has  offices  in  19  other  countries  namely  Ghana,  Benin,  Cote   d’Ivoire,   Burkina   Faso,   Cameroun,   Gabon,   Guinea,   Kenya,   Liberia,   Mozambique,  Senegal,   Tanzania,   Uganda,   Zambia,   Chad,   Congo   DR,   Congo   Brazzaville,   the   United  Kingdom  and  the  United  States.  Other  companies  with  foreign  offices  include  Zenith  Bank  Plc,   Access   Bank   Plc,   Diamond   Bank   Plc,   and   Industrial   and   General   Insurance   (IGI)   with  offices   in   Rwanda   and   Uganda   (Asiedu,   2006).   In   the   oil   and   gas   sector   Oando   Plc,   an  integrated   energy   group   has   operations   across   West   Africa   in   Ghana,   Togo,   Liberia,   and  licenses  for  oil  exploration  from  Turkey  and  Zambia.  The  company  is  building  sub-­‐Saharan  Africa’s  largest  gas  pipeline  network  and  with  its  foray  into  power  business,  the  company  is   poised   to   contribute   several   captive   power   plants   to   the   Nigerian   and   sub-­‐   regional  markets   (Oando   Annual   Report   &   Accounts   2012).   There   is   also   the   Sahara   Group   with  offices  in  Nigeria,  Cote  d’Ivoire,  United  Arab  Emirates,  Switzerland,  Singapore,  Brazil  and  the   Isle   of   Man.   In   the   telecommunications   sector,   Globacom   Limited   operates   in   the  Republic  of  Benin  and  Ghana,  and  has  also  acquired  licenses  to  operate  in  Cote  d’Ivoire.  It  has  a  reputation  as  one  of  the  fastest  growing  mobile  service  providers  in  the  world  and  aims  to  be  recognized  as  the  biggest  and  best  mobile  network  in  Africa  (Anyanwu,  2012).  2.  REVIEW  OF  RELATED  LITERATURE  Foreign   direct   investment   (FDI)   is   a   key   element   in   this   rapidly   evolving   international  economic  integration,  also  referred  to  as  globalization.  According  to  the  Organization  for  Economic  Co-­‐operation  and  Development  (2008)  FDI  provides  a  means  for  creating  direct,  stable   and   long-­‐lasting   links   between   economies.   Under   the   right   policy   environment,   it  can  serve  as  an  important  vehicle  for  local  enterprise  development,  and  it  may  also  help  improve   the   competitive   position   of   both   the   recipient   (“host”)   and   the   investing  (“home”)   economy.   In   particular,   FDI   encourages   the   transfer   of   technology   and   know-­‐how  between  economies,  as  is  the  case  with  China,  India,  Phillipines,  etc.  It  also  provides  an  opportunity  for  the  host  economy  to  promote  its  products  more  widely  in  international  markets.  FDI,  in  addition  to  its  positive  effect  on  the  development  of  international  trade,  is  an  important  source  of  capital  for  a  range  of  host  and  home  economies.  The  significant  growth   in   the   level   of   FDI   in   recent   decades,   and   its   international   pervasiveness,   reflect  both   an   increase   in   the   size   and   number   of   individual   FDI   transactions,   as   well   as   the  growing   diversification   of   enterprises   across   economies   and   industrial   sectors.   Large  multinational   enterprises   (MNE)   are   traditionally   the   dominant   players   in   such   cross-­‐border  FDI  transactions.  This  development  has  coincided  with  an  increased  propensity  for  MNEs  to  participate  in  foreign  trade.  In  recent  years,  it  is  believed  that  small  and  medium-­‐size  enterprises  have  also  become  increasingly  involved  in  FDI  (OECD  2008).  2.1  Overview  of  Foreign  Direct  Investment  Fo reign   Direct   Investment   (FDI)   according   to   World   Economic   Report   (2007,   p.245)   is  defined   as   an   investment   involving   a   long‑term   relationship   and   reflecting   a   lasting  interest  and  control  by  a  resident  entity  in  one  economy  (foreign  direct  investor  or  parent  enterprise)  in  an  enterprise  resident  in  an  economy  other  than  that  of  the  foreign  direct  investor   (FDI   enterprise   or   affiliate   enterprise   or   foreign   affiliate).   FDI   implies   that   the  investor   exerts   a   significant   degree   of   influence   on   the   management   of   the   enterprise  resident   in   the   other   economy   or   economies.   Such   investment   involves   both   the   initial  transaction  between  the  two  entities  and  all  subsequent  transactions  between  them  and  among  foreign  affiliates;  both  incorporated  and  unincorporated  (Grant  2010).  FDI  may  be  undertaken   by   individuals   as   well   as   business   entities.   Flows   of   FDI   comprise   capital  provided  (either  directly  or  through  other  related  enterprises)  by  a  foreign  direct  investor  to   an   enterprise,   or   capital   received   from   an   investing   enterprise   by   a   foreign   direct  investor.   FDI   has   three   components:   equity   capital,   reinvested   earnings   and   intra‑company  loans  (UNCTAD  2012,  p.245).  In   a   different   premise,   Morisset,   (2000)   argues   that   FDI   is   a   type   of   investment   that  involves   the   injection   of   foreign   funds   into   an   enterprise   that   operates   in   a   different  country  of  origin  from  the  investor.  Investors  are  granted  management  and  voting  rights  if  the   level   of   ownership   is   greater   than   or   equal   to   10%   of   ordinary   shares.   Shares  ownership  amounting  to  less  than  the  stated  amount  is  termed  portfolio  investment  and  is   not   considered   as   FDI.   This   does   not   include   foreign   investments   in   stock   markets.  Instead   FDI   refers   more   specifically   to   the   investment   of   foreign   assets   into   domestic  goods   and   services.   Sachs   and   Sievers   (1998)   contend   that   FDIs   are   generally   favoured  over  equity  investment,  which  tend  to  flow  out  of  an  economy  at  the  first  sign  of  trouble,  which   leaves   countries   more   susceptible   to   shocks   in   their   money   markets.   FDIs   can   be  classified  as  inward  FDI  or  outward  FDI  depending  on  the  direction  of  the  flow  of  money.  Inward  FDI  occurs  when  foreign  capital  is  invested  in  local  resources  while  outward  FDI  is  also  referred  to  as  ‘‘direct  investment  abroad’’  (UNCTAD  2007).  Foreign   investments   create   opportunity   for   improving   the   firm’s   cash   flow   and   enhance  shareholders  wealth.  Hence,  it  is  the  responsibility  of  the  firm’s  management  to  develop  strategies,  which  involve  the  penetration  of  foreign  markets,  which  will  yield  the  highest  rate   of   return   or   return   on   investment   (ROI).   FDI   occurs   when   a   firm   invests   directly   in  facilities  to  produce  and  or  market  a  product  in  a  foreign  country.  FDI  can  be  done  in  two  main  categories;  the  first  is  Greenfield  investment  in  the  form  of  the  establishment  of  a  new  operation  in  a  foreign  country  (Loungani  and  Assaf  2001,  p  5).  Secondly,  FDI  can  occur  by   acquiring   or   merging   with   an   existing   firm   in   a   foreign   country.   FDI   can   act   as   a  powerful  catalyst  for  economic  change,  although  the  option  is  expensive  because  a  firm  must  bear  the  costs  of  establishing  production  facilities  in  a  foreign  country  or  acquiring  a  foreign  enterprise  (Hill,  2009).  FDI  is  also  risky  because  of  the  problems  associated  with  doing  business  in  a  different  culture  where  the  “rules  of  the  game”  may  be  different  from  that   of   the   investor’s   country.   If   the   venture   fails,   the   money   invested   will   be   lost   and  there   is   always   the   risk   of   expropriation.   Hence   investment   decisions   by   the   firms   are  expected   to   improve   productivity   and   respond   to   changes   in   the   competitive  environment.  Foreign  investment  also  offers  technology  transfer,  management  of  know-­‐how  and  access  to  foreign  markets.  2.2.  Factors  influencing  FDI    Why  do  companies  go  abroad?  The   “eclectic   paradigm”   attributed   to   Dunning   (1977,   1993)   provides   a   theoretical

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