3.1. Why the Need for Foreign investment?

♤ In most developing countries like ours, domestic capital is inadequate to meet the purpose of economic growth.

♤ The inflow of foreign capital helps in removing the balance of payment over time.

♤ By taxing the profits of foreign enterprise, the developing countries mobilize funds for development projects.

♤ Foreign capital contributes to the generation of employment.

♤ Foreign investment fills the gaps in management, entrepreneurship, technology and skill.