The Legal Framework for Foreign Investment Protection in Nigeria: A

Critical Analysis

Introduction

Foreign direct investment (FDI) plays a crucial role in the economic development of nations,
particularly in emerging economies like Nigeria. To attract and retain foreign investment,
countries must establish robust legal frameworks and institutional mechanisms that protect
investors' interests while balancing national development goals. This essay critically examines
the legal measures and institutional machinery for the promotion and protection of foreign
investment under Nigerian Law and International Law.

I. Nigerian Legal Framework

1. Nigerian Investment Promotion Commission (NIPC) Act 1995

The Nigerian Investment Promotion Commission (NIPC) Act of 1995 stands as a cornerstone of
Nigeria's efforts to attract foreign investment. This legislation established the NIPC as the
primary governmental body responsible for encouraging, promoting, and coordinating
investments in the Nigerian economy[1].

Key provisions of the NIPC Act include:

a) Guarantees against expropriation: The Act provides assurances to foreign investors that their
investments will not be nationalized or expropriated except in cases of national interest, and even
then, with fair and adequate compensation[2].

b) Transferability of funds: It guarantees the unrestricted transferability of investment capital,

profits, and dividends[3].

c) Investment incentives: The Act outlines various incentives available to foreign investors,
including tax holidays and pioneer status for certain industries[4].

d) One-stop investment facilitation: The NIPC is mandated to serve as a centralized agency for
investment facilitation, streamlining the process for foreign investors[5].

Critical analysis: While the NIPC Act provides a solid foundation for investment protection, its
effectiveness is sometimes hampered by bureaucratic inefficiencies and implementation
challenges. The guarantee against expropriation, while reassuring, has been tested in practice,
with some disputes arising over the interpretation of "national interest"[6].

2. Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 1995

This Act liberalized foreign exchange transactions in Nigeria, marking a significant shift from
the previous restrictive regime. Its key provisions include:
a) Establishment of the Autonomous Foreign Exchange Market (AFEM): This allowed for
market-determined exchange rates[7].

b) Repatriation of profits: The Act permits foreign investors to freely repatriate profits and
dividends from their Nigerian investments[8].

c) Domiciliary accounts: It allows both residents and non-residents to maintain foreign currency
accounts with authorized banks in Nigeria[9].

Critical analysis: The Act has significantly improved the ease of conducting international
business transactions in Nigeria. However, periodic foreign exchange scarcity and policy
reversals by the Central Bank of Nigeria have sometimes undermined the Act's objectives,
creating uncertainty for foreign investors[10].

3. Companies and Allied Matters Act (CAMA) 2020

The recently enacted CAMA 2020 represents a major overhaul of Nigeria's company law, with
several provisions aimed at improving the business environment for both local and foreign
investors:

a) Simplified incorporation procedures: The Act introduces measures to streamline company

registration, including the option for single-member companies[11].

b) Enhanced corporate governance: It strengthens provisions for transparency and accountability

in corporate management[12].

c) Introduction of Limited Liability Partnerships (LLPs): This new business structure offers
flexibility and limited liability, potentially attractive to foreign investors[13].

Critical analysis: CAMA 2020 is a significant improvement over its predecessor, aligning
Nigerian company law more closely with international best practices. However, some concerns
have been raised about certain provisions, such as the enhanced powers given to the Corporate
Affairs Commission, which some critics argue could be subject to abuse[14].

II. International Legal Framework

1. Bilateral Investment Treaties (BITs)

Nigeria has entered into numerous Bilateral Investment Treaties (BITs) with various countries to
provide reciprocal protection for investors. These treaties typically include:

a) Fair and equitable treatment clauses: Ensuring that foreign investors receive treatment no less
favorable than that accorded to domestic investors[15].

b) Protection against expropriation: Providing safeguards against direct or indirect expropriation

without due process and compensation[16].
c) Dispute resolution mechanisms: Often including provisions for international arbitration, such
as through the International Centre for Settlement of Investment Disputes (ICSID)[17].

Critical analysis: While BITs offer an additional layer of protection for foreign investors, their
effectiveness has been questioned in recent years. Some argue that BITs can unduly constrain
host countries' regulatory space, leading to a "regulatory chill"[18]. Nigeria, like some other
developing countries, has begun to review its BIT program to strike a better balance between
investor protection and national development goals[19].

2. Multilateral Investment Guarantee Agency (MIGA) Convention

Nigeria's membership in MIGA, a World Bank Group institution, provides foreign investors with
access to political risk insurance. MIGA offers coverage against:

a) Currency inconvertibility and transfer restrictions b) Expropriation c) War, terrorism, and civil
disturbance d) Breach of contract e) Non-honoring of financial obligations[20]

Critical analysis: MIGA membership enhances Nigeria's attractiveness to foreign investors by

mitigating political risks. However, the effectiveness of MIGA guarantees depends on the
specific terms of each insurance contract and the nature of the investment[21].

3. International Centre for Settlement of Investment Disputes (ICSID) Convention

As a signatory to the ICSID Convention, Nigeria has agreed to submit investment disputes with
nationals of other member states to international arbitration. This provides foreign investors with
an alternative to domestic courts for dispute resolution[22].

Critical analysis: While ICSID arbitration offers a neutral forum for dispute resolution, it has
been criticized for its perceived bias towards investors and the potential for large awards against
developing countries. Some countries have withdrawn from ICSID, highlighting the ongoing
debate about its role in investment protection[23].

III. Institutional Machinery

1. Nigerian Investment Promotion Commission (NIPC)

The NIPC serves as the primary institution for investment promotion and protection in Nigeria.
Its functions include:

a) Investment promotion and facilitation b) Providing information on investment opportunities

and incentives c) Coordinating with other government agencies on investment-related matters d)
Maintaining a database of investment projects[24]

Critical analysis: While the NIPC has made strides in improving Nigeria's investment climate, its
effectiveness is sometimes hampered by overlapping mandates with other agencies and resource
constraints[25].
 2. Corporate Affairs Commission (CAC)

The CAC is responsible for company registration and regulation in Nigeria. Under CAMA 2020,
its powers have been expanded to include:

a) Overseeing company incorporation and registration b) Maintaining the companies register c)

Investigating corporate misconduct[26]

Critical analysis: The CAC's enhanced powers under CAMA 2020 aim to improve corporate
governance, but concerns have been raised about potential overreach and the need for adequate
safeguards[27].

3. Central Bank of Nigeria (CBN)

The CBN plays a crucial role in foreign investment through its monetary and foreign exchange
policies. It is responsible for:

a) Formulating and implementing foreign exchange policies b) Regulating the banking sector c)
Managing Nigeria's external reserves[28]

Critical analysis: While the CBN's policies aim to maintain economic stability, frequent policy
changes and interventions in the foreign exchange market have sometimes created uncertainty
for foreign investors[29].

Conclusion

Nigeria has made significant strides in developing a comprehensive legal and institutional
framework for the promotion and protection of foreign investment. The combination of domestic
legislation, international agreements, and dedicated institutions provides a multi-layered
approach to investor protection.

However, several challenges persist. These include implementation gaps, policy inconsistencies,
and the ongoing need to balance investor protection with national development objectives. The
effectiveness of the legal framework is also influenced by broader issues such as corruption,
infrastructure deficits, and security concerns.

Moving forward, Nigeria may need to focus on:

1. Enhancing the capacity and coordination of its investment-related institutions

2. Ensuring consistent implementation of existing laws and policies
3. Carefully reviewing its international investment agreements to ensure they align with
current development priorities
4. Addressing underlying governance and infrastructural challenges that affect the overall
investment climate
By addressing these issues, Nigeria can strengthen its position as an attractive destination for
foreign investment while ensuring that such investment contributes meaningfully to national
development goals.

Sources:

[1] Nigerian Investment Promotion Commission Act 1995, Cap N117 LFN 2004, s 4 [2] ibid s
25

[3] ibid s 24

[4] ibid s 21

[5] ibid s 4(e)

[6] Emeka Duruigbo, 'Permanent Sovereignty and Peoples' Ownership of Natural Resources in
International Law' (2006) 38 Geo Wash Int'l L Rev 33

[7] Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 1995, Cap F34 LFN 2004,
s1

[8] ibid s 15

[9] ibid s 17

[10] Bode Oyetunde, 'The Role of Tax Incentives in A Trio of Sub-Saharan African Economies:
A Comparative Study of Nigerian, South African and Kenyan Tax Law' (DPhil thesis, Queen
Mary University of London 2018)

[11] Companies and Allied Matters Act 2020, s 18

[12] ibid Part XI

[13] ibid Part C

[14] Olisa Agbakoba, 'A Critical Review of the Companies and Allied Matters Act (CAMA)
2020' (Olisa Agbakoba Legal, 2020) [Link]
allied-matters-act-cama-2020/ accessed 7 July 2024

[15] UNCTAD, 'Fair and Equitable Treatment: UNCTAD Series on Issues in International
Investment Agreements II' (United Nations 2012)

[16] UNCTAD, 'Expropriation: UNCTAD Series on Issues in International Investment

Agreements II' (United Nations 2012)
[17] UNCTAD, 'Investor-State Dispute Settlement: UNCTAD Series on Issues in International
Investment Agreements II' (United Nations 2014)

[18] Gus Van Harten and Dayna Nadine Scott, 'Investment Treaties and the Internal Vetting of
Regulatory Proposals: A Case Study from Canada' (2016) 7 J Int'l Disp Settlement 92

[19] Tarcisio Gazzini, 'Nigeria and Morocco Move Towards a "New Generation" of Bilateral
Investment Treaties' (EJIL:Talk!, 8 May 2017) [Link]
move-towards-a-new-generation-of-bilateral-investment-treaties/ accessed 7 July 2024

[20] MIGA, 'Types of Coverage' [Link] accessed 7 July 2024

[21] Nadine Kharoubi, 'Political Risk Insurance for Investments in Developing Countries: The
Role of the Multilateral Investment Guarantee Agency' (2019) 20 J World Investment & Trade
447

[22] ICSID Convention, Regulations and Rules (2006)

[23] Michael Waibel and others (eds), The Backlash Against Investment Arbitration: Perceptions
and Reality (Kluwer Law International 2010)

[24] Nigerian Investment Promotion Commission Act 1995, Cap N117 LFN 2004, s 4

[25] World Bank, 'Nigeria - An Assessment of the Investment Climate in 26 States' (2011)
Report No. 71891-NG

[26] Companies and Allied Matters Act 2020, s 7

[27] Templars, 'CAMA 2020: Doing Business in Nigeria - Key Changes and Implications'
(Templars, 13 August 2020) [Link]
nigeria-key-changes-and-implications/ accessed 7 July 2024

[28] Central Bank of Nigeria Act 2007, s 2

[29] IMF, 'Nigeria: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by
the Executive Director for Nigeria' (2022) IMF Country Report No. 22/33
Overview of Foreign Investment: Its Relevance to International Trade Law and
Importance to Economic Growth

Introduction

Foreign investment has become an integral component of the global economic landscape,
playing a crucial role in fostering economic growth, facilitating technology transfer, and
promoting international trade. By examining the legal frameworks governing foreign investment
and analyzing its impact on both host and home countries, we can better understand the complex
interplay between investment flows, trade relations, and economic progress.

I. Defining Foreign Investment

Foreign investment refers to the transfer of capital, technology, or other assets from one country
to another for the purpose of establishing lasting economic relations[1]. It can be broadly
categorized into two main types:

1. Foreign Direct Investment (FDI): This involves an investor establishing foreign business
operations or acquiring foreign business assets, including stakes in foreign companies[2].
FDI is characterized by a significant degree of influence over the management of the
enterprise.
2. Foreign Portfolio Investment (FPI): This refers to the purchase of securities and other
financial assets by investors from another country, without necessarily acquiring a
controlling interest in the enterprise[3].

The distinction between FDI and FPI is important, as they often have different motivations,
impacts, and regulatory treatments.

II. The Legal Framework Governing Foreign Investment

The legal regime for foreign investment is complex and multifaceted, encompassing domestic
laws, bilateral treaties, regional agreements, and multilateral conventions. Key components of
this framework include:

1. Domestic Investment Laws: Most countries have enacted specific legislation to regulate
foreign investment within their territories. These laws typically address issues such as
entry requirements, sectoral restrictions, performance requirements, and investment
incentives[4].
2. Bilateral Investment Treaties (BITs): BITs are agreements between two countries that
establish the terms and conditions for private investment by nationals and companies of
one state in the other state. They typically include provisions on fair and equitable
treatment, protection against expropriation, and dispute resolution mechanisms[5].
3. Regional Investment Agreements: These are multilateral treaties among countries in a
specific geographic region, such as the investment chapter of the North American Free
Trade Agreement (NAFTA) or the ASEAN Comprehensive Investment Agreement[6].
 4. Multilateral Investment Treaties: While attempts to create a comprehensive multilateral
framework for investment have not been successful, several multilateral agreements
address aspects of investment protection, such as the Convention on the Settlement of
Investment Disputes between States and Nationals of Other States (ICSID Convention)
[7].
5. World Trade Organization (WTO) Agreements: Although the WTO primarily deals with
trade, some of its agreements have implications for investment. The Agreement on Trade-
Related Investment Measures (TRIMs), for instance, prohibits certain investment
measures that distort trade[8].

III. Relevance to International Trade Law

Foreign investment is closely intertwined with international trade law for several reasons:

1. Trade-Investment Nexus: Many modern trade agreements include investment provisions,

recognizing the close relationship between trade and investment flows. The United
States-Mexico-Canada Agreement (USMCA), for example, contains a comprehensive
investment chapter[9].
2. Market Access: Foreign investment often serves as a means to access foreign markets,
complementing or substituting for trade in goods and services[10].
3. Global Value Chains: Multinational enterprises frequently use FDI to establish global
value chains, integrating production processes across multiple countries. This has
significant implications for trade patterns and policies[11].
4. Services Trade: The General Agreement on Trade in Services (GATS) recognizes
"commercial presence" as a mode of services supply, effectively linking services trade to
foreign investment[12].
5. Intellectual Property Rights: The protection of intellectual property rights, a key concern
in international trade law, is also crucial for foreign investors, particularly in knowledge-
intensive industries[13].
6. Dispute Resolution: Investment disputes often involve issues related to trade measures,
blurring the line between trade and investment disputes. The overlap is evident in cases
brought under both investment treaties and WTO agreements[14].

IV. Importance to Economic Growth

Foreign investment can contribute significantly to economic growth and development in both
host and home countries:

1. Capital Formation: FDI provides a source of external finance, which can be particularly
important for developing countries with limited domestic savings[15].
2. Technology Transfer: Foreign investors often bring advanced technologies and
management practices, which can spill over to domestic firms and enhance
productivity[16].
3. Human Capital Development: Multinational enterprises frequently provide training to
local employees, contributing to skill development in the host country[17].
 4. Job Creation: FDI can generate employment opportunities, both directly in foreign-
owned enterprises and indirectly through linkages with local suppliers[18].
5. Export Promotion: Foreign investors, particularly export-oriented ones, can help integrate
host countries into global value chains and boost their export performance[19].
6. Competitive Stimulus: The presence of foreign firms can increase competition in
domestic markets, potentially leading to increased efficiency and innovation among local
firms[20].
7. Infrastructure Development: Some forms of FDI, particularly in sectors like
telecommunications or transportation, can contribute to improving a country's
infrastructure[21].
8. Tax Revenue: Foreign-owned enterprises can be a significant source of tax revenue for
host countries, although this benefit can be reduced by tax incentives or profit shifting
practices[22].

For home countries, outward FDI can also bring benefits:

1. Market Expansion: It allows domestic firms to access new markets and grow beyond the
constraints of their home market[23].
2. Resource Access: Firms can invest abroad to secure access to natural resources or
specialized skills[24].
3. Efficiency Gains: Companies can improve their overall efficiency by relocating certain
activities to countries with comparative advantages in those areas[25].
4. Learning and Innovation: Exposure to foreign markets and technologies can enhance a
firm's knowledge base and innovative capacity[26].

V. Challenges and Controversies

While foreign investment can bring substantial benefits, it also poses challenges and has been the
subject of controversies:

1. Regulatory Autonomy: There are concerns that investment protection provisions in

international agreements may unduly constrain host countries' ability to regulate in the
public interest[27].
2. Dispute Settlement: The investor-state dispute settlement (ISDS) mechanism, a common
feature in investment treaties, has been criticized for its potential to favor corporate
interests over public policy objectives[28].
3. Environmental and Social Impacts: Some forms of FDI, particularly in extractive
industries, have been associated with negative environmental and social
consequences[29].
4. Economic Enclaves: There are concerns that foreign investment may create economic
enclaves with limited linkages to the local economy, particularly in the case of export
processing zones[30].
5. Tax Avoidance: Multinational enterprises may use their global structure to engage in
aggressive tax planning, reducing their tax contributions in both host and home
countries[31].
 6. National Security: Inward FDI in sensitive sectors has raised national security concerns in
some countries, leading to increased scrutiny of foreign acquisitions[32].

Conclusion

Foreign investment plays a vital role in the global economy, serving as a key driver of economic
growth and a crucial link in international trade relations. Its importance is reflected in the
complex web of legal frameworks that have evolved to govern cross-border investment flows.
While foreign investment can bring significant benefits to both host and home countries, it also
presents challenges that policymakers must carefully navigate.

As the global economy continues to evolve, particularly in the face of technological changes and
shifting geopolitical dynamics, the landscape of foreign investment is likely to change as well.
Emerging issues such as the digital economy, climate change, and sustainable development goals
are already shaping discussions about the future of investment policies and agreements.

Moving forward, the key challenge will be to design investment policies and agreements that can
harness the benefits of foreign investment while addressing legitimate public policy concerns.
This will require balancing the interests of investors, states, and other stakeholders, and ensuring
coherence between investment policies and other areas of economic governance, including trade,
tax, and competition policies.

By understanding the multifaceted nature of foreign investment and its intricate relationships
with international trade and economic development, policymakers and practitioners can work
towards creating a more sustainable and inclusive framework for global investment flows.

Sources:

[1] OECD, OECD Benchmark Definition of Foreign Direct Investment (4th edn, OECD
Publishing 2008)

[2] UNCTAD, World Investment Report 2020: International Production Beyond the Pandemic
(United Nations 2020)

[3] IMF, Balance of Payments and International Investment Position Manual (6th edn, IMF
2009)

[4] UNCTAD, 'National Investment Policy Reviews'

[Link] accessed 8 July 2024

[5] Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn,
OUP 2012)

[6] Julien Chaisse and Sufian Jusoh, The ASEAN Comprehensive Investment Agreement: The
Regionalization of Laws and Policy on Foreign Investment (Edward Elgar 2016)
[7] ICSID Convention, Regulations and Rules (2006)

[8] WTO, Agreement on Trade-Related Investment Measures (1994)

[9] USMCA, Chapter 14: Investment (2020)

[10] Richard Baldwin and Javier Lopez-Gonzalez, 'Supply-Chain Trade: A Portrait of Global
Patterns and Several Testable Hypotheses' (2015) 38 The World Economy 1682

[11] OECD, WTO and World Bank Group, Global Value Chains: Challenges, Opportunities, and
Implications for Policy (2014)

[12] WTO, General Agreement on Trade in Services (1995)

[13] Keith E Maskus, Private Rights and Public Problems: The Global Economics of Intellectual
Property in the 21st Century (Peterson Institute 2012)

[14] Giorgio Sacerdoti and others (eds), General Interests of Host States in International
Investment Law (CUP 2014)

[15] Laura Alfaro and others, 'FDI and Economic Growth: The Role of Local Financial Markets'
(2004) 64 Journal of International Economics 89

[16] Robert E Lipsey and Fredrik Sjöholm, 'The Impact of Inward FDI on Host Countries: Why
Such Different Answers?' in Theodore H Moran, Edward M Graham and Magnus Blomström
(eds), Does Foreign Direct Investment Promote Development? (Institute for International
Economics 2005)

[17] Beata S Javorcik, 'Does Foreign Direct Investment Increase the Productivity of Domestic
Firms? In Search of Spillovers Through Backward Linkages' (2004) 94 American Economic
Review 605

[18] Ethan Kapstein, 'Virtuous Circles? Human Capital Formation, Economic Development and
the Multinational Enterprise' (2002) 13 OECD Development Centre Working Papers

[19] Prema-chandra Athukorala and Jayant Menon, 'Foreign Investment and Industrialization in
Malaysia: Exports, Employment and Spillovers' (1996) 7 Asian Economic Journal 29

[20] Holger Görg and David Greenaway, 'Much Ado about Nothing? Do Domestic Firms Really
Benefit from Foreign Direct Investment?' (2004) 19 The World Bank Research Observer 171

[21] Shang-Jin Wei, 'How Taxing is Corruption on International Investors?' (2000) 82 Review of
Economics and Statistics 1

[22] OECD, Tax Effects on Foreign Direct Investment: Recent Evidence and Policy Analysis
(OECD Publishing 2007)
[23] John H Dunning and Sarianna M Lundan, Multinational Enterprises and the Global
Economy (2nd edn, Edward Elgar 2008)

[24] Peter J Buckley and others, 'The Determinants of Chinese Outward Foreign Direct
Investment' (2007) 38 Journal of International Business Studies 499

[25] Ari Kokko, 'The Home Country Effects of FDI in Developed Economies' (2006) European
Institute of Japanese Studies Working Paper 225

[26] Bruno Crépon, Emmanuel Duguet and Jacques Mairesse, 'Research, Innovation and
Productivity: An Econometric Analysis at the Firm Level' (1998) 7 Economics of Innovation and
New Technology 115

[27] Gus Van Harten, 'Five Justifications for Investment Treaties: A Critical Discussion' (2010) 2
Trade, Law and Development 19

[28] Pia Eberhardt and Cecilia Olivet, Profiting from Injustice: How Law Firms, Arbitrators and
Financiers are Fuelling an Investment Arbitration Boom (Corporate Europe Observatory and the
Transnational Institute 2012)

[29] Lyuba Zarsky, 'From Regulatory Chill to Deepfreeze?' (2006) 12 International

Environmental Agreements: Politics, Law and Economics 299

[30] Theodore H Moran, Beyond Sweatshops: Foreign Direct Investment and Globalization in
Developing Countries (Brookings Institution Press 2002)

[31] OECD, Addressing Base Erosion and Profit Shifting (OECD Publishing 2013)

[32] Theodore H Moran, 'CFIUS and National Security: Challenges for the United States,
Opportunities for the European Union' (2017) Peterson Institute for International Economics
Policy Brief 17-31
Types of Foreign Investments and Their Classification Based on the Nature and Scope of
Multilateral and Bilateral Treaties Regulating Foreign Investments

Introduction

Foreign investment plays a crucial role in the global economy, facilitating the flow of capital,
technology, and expertise across national borders.

I. Types of Foreign Investments

Foreign investments can be categorized into several types, each with distinct characteristics and
implications for both investors and host countries:

1. Foreign Direct Investment (FDI)

FDI involves an investor establishing foreign business operations or acquiring foreign business
assets, including stakes in foreign companies[1]. The key feature of FDI is that it gives the
investor a significant degree of influence over the management of the enterprise. FDI can be
further subdivided into:

a) Greenfield Investments: These involve establishing new operations in a foreign country, such
as building new facilities from the ground up[2].

b) Brownfield Investments: These involve purchasing or leasing existing facilities to launch new
production activities[3].

c) Mergers and Acquisitions (M&As): These involve acquiring or merging with existing foreign
companies[4].

2. Foreign Portfolio Investment (FPI)

FPI refers to the purchase of securities and other financial assets by investors from another
country, without necessarily acquiring a controlling interest in the enterprise[5]. This includes
investments in stocks, bonds, and other financial instruments.

3. Commercial Loans

These are loans extended by foreign commercial banks to domestic companies or

governments[6].

4. Official Flows

These are forms of development assistance from one government to another, which can include
grants, loans, or technical assistance[7].

5. Contract-Based Investments
These include various forms of contractual arrangements that do not involve equity participation
but transfer certain rights to foreign investors, such as:

a) Licensing Agreements: These allow foreign companies to use intellectual property rights in
exchange for fees[8].

b) Franchising: A form of licensing where the franchisor provides a proven business model and
brand[9].

c) Management Contracts: These involve foreign companies providing managerial control over
domestic enterprises without equity ownership[10].

d) Turnkey Projects: These are projects in which a foreign company designs, constructs, and
equips a facility, then hands it over to the domestic owner[11].

6. Joint Ventures

These involve shared ownership of an enterprise between foreign and domestic investors[12].

II. Classification Based on Multilateral and Bilateral Treaties

The regulation of foreign investments through international treaties has evolved significantly
over the past few decades. These treaties can be broadly categorized into multilateral and
bilateral agreements, each with varying scopes and approaches to investment protection and
liberalization. Based on the nature and scope of these treaties, foreign investments can be
classified as follows:

1. Investments Protected Under Comprehensive Bilateral Investment Treaties (BITs)

BITs are agreements between two countries that establish the terms and conditions for private
investment by nationals and companies of one state in the other state[13]. Most BITs offer
comprehensive protection to a wide range of investments, including:

a) Traditional FDI b) Portfolio investments c) Intellectual property rights d) Contractual rights

Key features of investments under comprehensive BITs include:

 Broad definition of "investment" covering both tangible and intangible assets

 Strong protections against expropriation
 Fair and equitable treatment provisions
 Full protection and security clauses
 Free transfer of funds provisions
 Investor-state dispute settlement (ISDS) mechanisms[14]

Examples of comprehensive BITs include the Germany-China BIT (2003) and the UK-Colombia
BIT (2010)[15].
 2. Investments Under Sector-Specific Treaties

Some treaties focus on specific sectors or types of investments. These can be bilateral or
multilateral in nature. Investments under these treaties are often subject to more tailored
regulations. Examples include:

a) Energy Charter Treaty (ECT): A multilateral framework for energy cooperation that extends
investment protections specifically to the energy sector[16].

b) Bilateral Investment Treaties focusing on specific sectors: For instance, some BITs between
resource-rich countries and capital-exporting countries may have provisions specifically tailored
to investments in the extractive industries[17].

3. Investments Under Regional Investment Agreements

These investments are protected under multilateral treaties among countries in a specific
geographic region. Examples include:

a) ASEAN Comprehensive Investment Agreement (ACIA): Covers investments among ASEAN

member states[18].

b) Investment provisions in regional trade agreements, such as the investment chapter of the
United States-Mexico-Canada Agreement (USMCA)[19].

These agreements often provide protections similar to BITs but may also include provisions for
regional integration and cooperation.

4. Investments Under WTO Agreements

While the World Trade Organization (WTO) does not have a comprehensive agreement on
investment, certain WTO agreements have implications for foreign investment:

a) Agreement on Trade-Related Investment Measures (TRIMs): Prohibits certain investment

measures that distort trade, such as local content requirements[20].

b) General Agreement on Trade in Services (GATS): Covers foreign investment in services

sectors through its provisions on "commercial presence" as a mode of service supply[21].

Investments covered under these agreements are subject to WTO principles such as most-
favored-nation treatment and national treatment, but the scope of protection is generally
narrower than under BITs.

5. Investments Under Limited Protection Treaties

Some treaties provide more limited protections to foreign investments. These may include:
a) Treaties focusing primarily on investment promotion and cooperation, without strong
protection provisions or ISDS mechanisms[22].

b) Treaties with narrower definitions of covered investments or more exceptions to investment

protections[23].

6. Investments Protected Under Customary International Law

In the absence of specific treaty protections, foreign investments may still be protected under
customary international law. This includes basic protections against uncompensated
expropriation and the international minimum standard of treatment[24]. However, the scope of
protection under customary international law is generally considered to be more limited and less
certain than treaty-based protections.

7. Investments Under Next-Generation Investment Agreements

Recent years have seen the emergence of new approaches to investment treaties, often referred to
as "next-generation" agreements. These typically aim to balance investor protections with other
public policy objectives. Investments under these agreements may be characterized by:

a) More precise definitions of investment protections to preserve regulatory space b) Exclusion

of portfolio investments from some protections c) Limitations on ISDS, such as "fork-in-the-
road" provisions or exhaustion of local remedies requirements d) Inclusion of investor
obligations, such as compliance with domestic laws e) Provisions addressing sustainable
development, labor rights, and environmental protection[25]

Examples include the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and
the Brazil-India Investment Cooperation and Facilitation Treaty[26].

Conclusion

The classification of foreign investments based on the nature and scope of multilateral and
bilateral treaties reveals the complex and evolving landscape of international investment law.
From comprehensive BITs offering strong protections to sector-specific agreements and next-
generation treaties balancing investor rights with public policy concerns, the regulatory
framework for foreign investment is diverse and multifaceted.

This classification underscores the importance for investors to understand the specific
protections available to their investments under applicable treaties. Similarly, it highlights the
need for policymakers to carefully consider the implications of different treaty approaches for
their development strategies and regulatory autonomy.

As the global economy continues to evolve, particularly in response to challenges such as

climate change, digital transformation, and sustainable development goals, the framework for
regulating foreign investment is likely to continue evolving. Future research and policy
discussions will need to grapple with how best to design investment treaties that can attract
beneficial foreign investment while preserving sufficient policy space to address pressing global
challenges.

Sources:

[1] OECD, OECD Benchmark Definition of Foreign Direct Investment (4th edn, OECD
Publishing 2008)

[2] UNCTAD, World Investment Report 2020: International Production Beyond the Pandemic
(United Nations 2020)

[3] Stijn Claessens and Neeltje Van Horen, 'Foreign Banks: Trends and Impact' (2014) 46
Journal of Money, Credit and Banking 295

[4] Robert C Feenstra and Alan M Taylor, International Economics (Worth Publishers 2014)

[5] IMF, Balance of Payments and International Investment Position Manual (6th edn, IMF
2009)

[6] Dilip K Das, 'Structured Finance and the Emerging-Market Borrowers: A Review' (2008) 15
Journal of Structured Finance 38

[7] OECD, 'Official Development Assistance (ODA)' (OECD Data, 2021)

[Link] accessed 8 July 2024

[8] Keith E Maskus, 'The Role of Intellectual Property Rights in Encouraging Foreign Direct
Investment and Technology Transfer' (1998) 9 Duke Journal of Comparative & International
Law 109

[9] Jeffrey L Bradach, 'Using the Plural Form in the Management of Restaurant Chains' (1997)
42 Administrative Science Quarterly 276

[10] Farok J Contractor and Peter Lorange, Cooperative Strategies in International Business
(Lexington Books 1988)

[11] Yadong Luo, 'Determinants of Entry in an Emerging Economy: A Multilevel Approach'

(2001) 32 Journal of Management Studies 443

[12] J Peter Killing, Strategies for Joint Venture Success (RLE International Business)
(Routledge 2012)

[13] Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd
edn, OUP 2012)

[14] UNCTAD, 'International Investment Agreements Navigator'

[Link] accessed 8 July 2024
[15] UNCTAD, 'Investment Policy Hub' [Link] accessed 8 July
2024

[16] Energy Charter Secretariat, The Energy Charter Treaty and Related Documents (Energy
Charter Secretariat 2004)

[17] Jeswald W Salacuse, The Law of Investment Treaties (2nd edn, OUP 2015)

[18] Julien Chaisse and Sufian Jusoh, The ASEAN Comprehensive Investment Agreement: The
Regionalization of Laws and Policy on Foreign Investment (Edward Elgar 2016)

[19] USMCA, Chapter 14: Investment (2020)

[20] WTO, Agreement on Trade-Related Investment Measures (1994)

[21] WTO, General Agreement on Trade in Services (1995)

[22] Karl P Sauvant and Federico Ortino, Improving the International Investment Law and
Policy Regime: Options for the Future (Ministry for Foreign Affairs of Finland 2013)

[23] Stephan W Schill, 'The Multilateralization of International Investment Law: Emergence of a

Multilateral System of Investment Protection on Bilateral Grounds' (2009) 2 Trade Law &
Development 59

[24] Patrick Dumberry, 'Are BITs Representing the "New" Customary International Law in
International Investment Law?' (2010) 28 Penn State International Law Review 675

[25] UNCTAD, World Investment Report 2015: Reforming International Investment

Governance (United Nations 2015)

[26] Nathalie Bernasconi-Osterwalder and Martin Dietrich Brauch, 'Comparative Commentary to

Brazil's Cooperation and Investment Facilitation Agreements (CIFAs) with Mozambique,
Angola, Mexico, and Malawi' (IISD 2015) [Link]
commentary-brazils-cooperation-and-investment-facilitation-agreements-cifas accessed 8 July
2024
Factors Promoting the Growth of Foreign Investment and Extant Laws Regulating Them

Introduction

Foreign investment has become a cornerstone of the global economy, driving economic growth,
technological advancement, and international cooperation.

I. Factors Promoting the Growth of Foreign Investment

Numerous factors contribute to the growth of foreign investment, ranging from economic
conditions to policy frameworks and technological advancements. These factors often interact in
complex ways, creating an environment conducive to cross-border investment flows.

1. Economic Factors

a) Market Size and Growth Potential: Investors are often attracted to countries with large
domestic markets or high growth potential. The size of a market determines the potential demand
for goods and services, while growth prospects indicate future opportunities[1].

b) Economic Stability: Macroeconomic stability, including low inflation rates, stable exchange
rates, and sustainable public debt levels, provides a predictable environment for investors[2].

c) Labor Costs and Productivity: Countries with competitive labor costs and high productivity
levels can attract investments, particularly in labor-intensive industries[3].

d) Natural Resources: The presence of abundant natural resources can attract foreign investment
in extractive industries and related sectors[4].

2. Political and Legal Factors

a) Political Stability: A stable political environment reduces risks for foreign investors and
provides confidence in long-term investments[5].

b) Rule of Law and Property Rights Protection: Strong legal institutions, effective contract
enforcement, and protection of property rights are crucial for attracting foreign investment[6].

c) Investment Policies and Incentives: Favorable investment policies, such as tax incentives,
subsidies, and special economic zones, can attract foreign investors[7].

d) Trade Policies: Open trade policies and participation in regional trade agreements can make a
country more attractive for export-oriented investments[8].

3. Infrastructure and Technology

a) Physical Infrastructure: Well-developed transportation, communication, and energy

infrastructure reduces operational costs and enhances productivity[9].
b) Technological Readiness: Countries with advanced technological capabilities and a skilled
workforce can attract investments in high-tech sectors[10].

c) Digital Infrastructure: In the modern economy, robust digital infrastructure is increasingly

important for attracting foreign investment[11].

4. Financial Factors

a) Capital Market Development: Well-functioning capital markets facilitate investment by

providing liquidity and risk management tools[12].

b) Banking System Efficiency: An efficient banking system supports foreign investment by

providing necessary financial services and credit[13].

c) Exchange Rate Policies: Stable and market-determined exchange rates reduce currency risks
for foreign investors[14].

5. Global Economic Trends

a) Globalization: The ongoing process of economic globalization has led to increased

interconnectedness and opportunities for cross-border investments[15].

b) Shift in Global Economic Power: The rise of emerging economies has created new investment
opportunities and shifted global investment patterns[16].

c) Technological Advancements: Rapid technological progress has enabled new forms of

investment and business models[17].

6. Cultural and Social Factors

a) Cultural Affinity: Cultural similarities or historical ties between countries can facilitate foreign
investment[18].

b) Education and Skills: A well-educated workforce with relevant skills attracts investments in
knowledge-intensive sectors[19].

c) Quality of Life: Factors such as healthcare, education, and environmental quality can
influence investment decisions, particularly for investments involving expatriate personnel[20].
II. Extant Laws Regulating Foreign Investment

The legal framework governing foreign investment is complex and multi-layered, involving
domestic laws, bilateral treaties, regional agreements, and international conventions. This section
will explore the key components of this legal framework.

1. Domestic Laws

a) Investment Laws: Many countries have specific laws governing foreign investment, which
may address issues such as:

 Entry requirements and restrictions

 Investment incentives
 Performance requirements
 Dispute resolution mechanisms
 Nationalization and expropriation provisions[21]

For example, China's Foreign Investment Law of 2019 aims to level the playing field between
foreign and domestic investors[22].

b) Company Laws: These laws regulate the establishment and operation of business entities,
including those with foreign ownership[23].

c) Tax Laws: Tax regulations, including corporate tax rates, tax incentives, and transfer pricing
rules, significantly impact foreign investment decisions[24].

d) Labor Laws: Regulations governing employment relationships, including hiring and firing
practices, minimum wage requirements, and social security obligations, affect the operational
environment for foreign investors[25].

e) Environmental Laws: Environmental regulations can impact foreign investment, particularly

in sectors with significant environmental footprints[26].

f) Intellectual Property Laws: Strong intellectual property protection is crucial for attracting
investment in knowledge-intensive industries[27].

2. Bilateral Investment Treaties (BITs)

BITs are agreements between two countries that establish the terms and conditions for private
investment by nationals and companies of one state in the other state. Key provisions typically
include:

a) Definition of Investment: BITs usually provide a broad definition of "investment" to ensure

comprehensive protection[28].
b) Fair and Equitable Treatment: This standard requires host states to treat foreign investors
fairly and equitably, often interpreted as providing a stable and predictable business
environment[29].

c) National Treatment and Most-Favored-Nation Treatment: These provisions ensure that foreign
investors are not discriminated against compared to domestic investors or investors from third
countries[30].

d) Protection Against Expropriation: BITs typically prohibit direct or indirect expropriation

without prompt, adequate, and effective compensation[31].

e) Free Transfer of Funds: This provision ensures that investors can repatriate their investments
and returns[32].

f) Investor-State Dispute Settlement (ISDS): Most BITs provide for ISDS mechanisms, allowing
investors to bring claims directly against host states in international arbitration[33].

3. Regional Investment Agreements

These are multilateral treaties among countries in a specific geographic region. Examples
include:

a) ASEAN Comprehensive Investment Agreement (ACIA): This agreement provides a

framework for investment protection and liberalization among ASEAN member states[34].

b) Investment provisions in regional trade agreements: Many regional trade agreements, such as
the United States-Mexico-Canada Agreement (USMCA), include investment chapters that
provide protections similar to BITs[35].

4. Multilateral Investment Treaties and Conventions

While attempts to create a comprehensive multilateral investment agreement have not been
successful, several multilateral instruments address aspects of foreign investment:

a) Convention on the Settlement of Investment Disputes between States and Nationals of Other
States (ICSID Convention): This convention establishes a framework for the resolution of
investment disputes through arbitration[36].

b) Convention Establishing the Multilateral Investment Guarantee Agency (MIGA): MIGA

provides political risk insurance to foreign investors[37].

c) Energy Charter Treaty (ECT): This multilateral framework for energy cooperation includes
investment protection provisions for the energy sector[38].
 5. World Trade Organization (WTO) Agreements

Although the WTO primarily deals with trade, some of its agreements have implications for
investment:

a) Agreement on Trade-Related Investment Measures (TRIMs): This agreement prohibits certain

investment measures that distort trade, such as local content requirements[39].

b) General Agreement on Trade in Services (GATS): The GATS covers foreign investment in
services sectors through its provisions on "commercial presence" as a mode of service
supply[40].

6. Soft Law Instruments

Various non-binding instruments also influence the regulation of foreign investment:

a) OECD Guidelines for Multinational Enterprises: These guidelines provide recommendations

for responsible business conduct for multinational enterprises operating in or from adhering
countries[41].

b) UN Guiding Principles on Business and Human Rights: This framework outlines the state
duty to protect human rights, the corporate responsibility to respect human rights, and access to
remedy for victims of business-related abuses[42].

7. Evolving Trends in Investment Law

Recent developments in investment law reflect changing priorities and concerns:

a) Rebalancing Investor Rights and State Regulatory Space: Many recent treaties include
provisions that aim to preserve states' right to regulate in the public interest[43].

b) Sustainable Development: Newer agreements often incorporate provisions related to

environmental protection, labor rights, and sustainable development[44].

c) Reform of ISDS: There are ongoing discussions about reforming the ISDS system, including
proposals for a multilateral investment court[45].

d) Digital Economy: As the digital economy grows, there are efforts to address investment issues
related to data flows, digital services, and e-commerce[46].

Conclusion

The growth of foreign investment is driven by a complex interplay of economic, political,

technological, and social factors. Countries seeking to attract foreign investment must address
these factors holistically, creating an environment that is conducive to both domestic and
international business activities.
At the same time, the legal framework governing foreign investment continues to evolve,
reflecting changing global economic realities and societal priorities. The challenge for
policymakers and legal practitioners is to strike a balance between providing necessary
protections for foreign investors and preserving sufficient policy space for host states to pursue
legitimate public policy objectives.

As we move forward, key areas for further development include addressing the challenges posed
by the digital economy, incorporating sustainable development considerations into investment
frameworks, and finding ways to make the system of investment dispute resolution more
balanced and efficient.

The continued growth and evolution of foreign investment will undoubtedly play a crucial role in
shaping the global economic landscape in the years to come. Understanding the factors that drive
this growth and the legal frameworks that govern it will be essential for policymakers, investors,
and scholars alike.

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Some Possible Extensions' (1988) 19 Journal of International Business Studies 1

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(1996) NBER Working Paper 5698

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Indigenous Innovation in the Emerging Economies: Technological Change and Catching-up'
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[12] Ross Levine, 'Financial Development and Economic Growth: Views and Agenda' (1997) 35
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(W W Norton & Company 2011)

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[17] Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and
Prosperity in a Time of Brilliant Technologies (W W Norton & Company 2014)

[18] Bruce Kogut and Harbir Singh, 'The Effect of National Culture on the Choice of Entry
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[19] Eric A Hanushek and Ludger Woessmann, 'The Role of Cognitive Skills in Economic
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Review 73

[21] UNCTAD, World Investment Report 2020: International Production Beyond the Pandemic
(United Nations 2020)

[22] National People's Congress of the People's Republic of China, Foreign Investment Law of
the People's Republic of China (2019)

[23] John Armour and others, 'The Essential Elements of Corporate Law: What is Corporate
Law?' (2009) Harvard Law School John M Olin Center Discussion Paper No 643

[24] James R Hines Jr, 'Tax Policy and the Activities of Multinational Corporations' (1997)
NBER Working Paper 5589

[25] Simon Deakin and Frank Wilkinson, The Law of the Labour Market: Industrialization,
Employment, and Legal Evolution (Oxford University Press 2005)
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Analysis of Policy Results and Determinants' (2005) 10 Environment and Development
Economics 391

[27] Keith E Maskus, 'The Role of Intellectual Property Rights in Encouraging Foreign Direct
Investment and Technology Transfer' (1998) 9 Duke Journal of Comparative & International
Law 109

[28] Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd
edn, Oxford University Press 2012)

[29] Ioana Tudor, The Fair and Equitable Treatment Standard in the International Law of
Foreign Investment (Oxford University Press 2008)

[30] Andrea K Bjorklund, 'National Treatment' in August Reinisch (ed), Standards of Investment
Protection (Oxford University Press 2008)

[31] August Reinisch, 'Expropriation' in Peter Muchlinski, Federico Ortino and Christoph
Schreuer (eds), The Oxford Handbook of International Investment Law (Oxford University Press
2008)

[32] Abba Kolo and Thomas Wälde, 'Capital Transfer Restrictions under Modern Investment
Treaties' in August Reinisch (ed), Standards of Investment Protection (Oxford University Press
2008)

[33] Susan D Franck, 'The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public
International Law Through Inconsistent Decisions' (2005) 73 Fordham Law Review 1521

[34] Julien Chaisse and Sufian Jusoh, The ASEAN Comprehensive Investment Agreement: The
Regionalization of Laws and Policy on Foreign Investment (Edward Elgar 2016)

[35] United States-Mexico-Canada Agreement (USMCA), Chapter 14: Investment (2020)

[36] Christoph H Schreuer and others, The ICSID Convention: A Commentary (2nd edn,
Cambridge University Press 2009)

[37] Ibrahim F I Shihata, MIGA and Foreign Investment: Origins, Operations, Policies and Basic
Documents of the Multilateral Investment Guarantee Agency (Martinus Nijhoff Publishers 1988)

[38] Thomas Wälde (ed), The Energy Charter Treaty: An East-West Gateway for Investment and
Trade (Kluwer Law International 1996)

[39] WTO, Agreement on Trade-Related Investment Measures (1994)

[40] WTO, General Agreement on Trade in Services (1995)

[41] OECD, OECD Guidelines for Multinational Enterprises (OECD Publishing 2011)

[42] UN Human Rights Council, 'Guiding Principles on Business and Human Rights:
Implementing the United Nations "Protect, Respect and Remedy" Framework' (2011)
A/HRC/17/31

[43] UNCTAD, World Investment Report 2015: Reforming International Investment

Governance (United Nations 2015)

[44] Markus W Gehring and Marie-Claire Cordonier Segger (eds), Sustainable Development in
World Investment Law (Kluwer Law International 2011)

[45] Gabrielle Kaufmann-Kohler and Michele Potestà, 'The Composition of a Multilateral

Investment Court and of an Appeal Mechanism for Investment Awards' (2017) CIDS
Supplemental Report

[46] Jane Kelsey, 'How a TPP-Style E-commerce Rule in the WTO Would Endanger the
Development Dimension of the GATS Acquis (and Potentially
The Role of Trade Dispute Mechanisms in Promoting and Protecting Foreign Investment

Introduction

Trade dispute mechanisms play a crucial role in promoting and protecting foreign investment by
providing a framework for resolving conflicts between investors and host states, as well as
between states themselves. These mechanisms contribute to creating a stable and predictable
environment for international trade and investment, which is essential for fostering economic
growth and development.

I. Overview of Trade Dispute Mechanisms

Trade dispute mechanisms can be broadly categorized into three main types:

1. State-to-State Dispute Settlement (SSDS)

2. Investor-State Dispute Settlement (ISDS)
3. Alternative Dispute Resolution (ADR) methods

Each of these mechanisms serves different purposes and operates under distinct legal
frameworks.

1. State-to-State Dispute Settlement (SSDS)

SSDS mechanisms are primarily found in international trade agreements and are designed to
resolve disputes between countries regarding the interpretation and application of treaty
provisions[1]. The most prominent example of SSDS is the World Trade Organization (WTO)
dispute settlement system.

Key features of SSDS include:

 Disputes are initiated by governments, not private entities

 The focus is on compliance with treaty obligations rather than compensation
 Decisions are generally binding on state parties

The WTO dispute settlement system, established under the Dispute Settlement Understanding
(DSU), is considered one of the most sophisticated SSDS mechanisms[2]. It involves a multi-
stage process:

a) Consultations b) Panel proceedings c) Appellate review d) Implementation and enforcement

2. Investor-State Dispute Settlement (ISDS)

ISDS mechanisms allow foreign investors to bring claims directly against host states for alleged
violations of investment protection standards[3]. These mechanisms are typically found in
bilateral investment treaties (BITs) and investment chapters of free trade agreements.
Key features of ISDS include:

 Direct access for investors to international arbitration

 Monetary compensation as a primary remedy
 Enforceability of awards under the New York Convention

ISDS is often conducted under the auspices of institutions such as:

 International Centre for Settlement of Investment Disputes (ICSID)

 United Nations Commission on International Trade Law (UNCITRAL)
 Stockholm Chamber of Commerce (SCC)

3. Alternative Dispute Resolution (ADR)

ADR methods, such as mediation and conciliation, are increasingly being incorporated into trade
and investment agreements as complementary or alternative mechanisms to formal dispute
settlement[4]. These methods aim to provide more flexible and cost-effective means of resolving
disputes.

II. The Role of Trade Dispute Mechanisms in Promoting Foreign Investment

Trade dispute mechanisms contribute to promoting foreign investment in several ways:

1. Legal Certainty and Predictability

By providing a clear framework for resolving disputes, these mechanisms enhance legal certainty
and predictability in international trade and investment relations[5]. This certainty is crucial for
investors when making long-term investment decisions.

For example, the existence of ISDS provisions in investment treaties signals to investors that
they have recourse to an independent and impartial forum if their rights are violated, potentially
encouraging more investment[6].

2. Deterrence of Treaty Violations

The possibility of facing dispute settlement proceedings can deter states from violating their
treaty obligations[7]. This deterrent effect helps create a more stable investment environment by
encouraging compliance with investment protection standards.

3. Development of International Investment Law

Through their decisions and interpretations, dispute settlement bodies contribute to the
development and clarification of international investment law[8]. This evolving body of law
provides guidance to both investors and states on the scope and application of investment
protection standards.
 4. Promotion of Good Governance

Trade dispute mechanisms can promote good governance by encouraging states to improve their
domestic legal and administrative systems to avoid potential disputes[9]. This can lead to overall
improvements in the business environment, benefiting both foreign and domestic investors.

5. Facilitation of Economic Integration

Particularly in the context of regional trade agreements, dispute settlement mechanisms play a
crucial role in facilitating economic integration by ensuring consistent application of treaty
provisions across member states[10].

III. The Role of Trade Dispute Mechanisms in Protecting Foreign Investment

Trade dispute mechanisms also serve a vital role in protecting foreign investment:

1. Enforcement of Investment Protection Standards

ISDS mechanisms provide a means for investors to enforce the substantive protections granted to
them under investment treaties, such as:

 Fair and equitable treatment

 Protection against expropriation without compensation
 Non-discrimination
 Free transfer of funds[11]

2. Depoliticization of Investment Disputes

By allowing investors to bring claims directly against host states, ISDS mechanisms help
depoliticize investment disputes, reducing the potential for diplomatic tensions between the
investor's home state and the host state[12].

3. Access to Neutral Forum

Trade dispute mechanisms, particularly ISDS, provide investors with access to a neutral forum
for dispute resolution, which can be especially important when domestic courts in the host state
are perceived as biased or inefficient[13].

4. Compensation for Treaty Violations

In cases where violations of investment protection standards are found, dispute settlement
mechanisms can provide for monetary compensation to investors, helping to mitigate their
losses[14].

5. Encouragement of Amicable Dispute Resolution

The existence of formal dispute settlement mechanisms often encourages parties to seek
amicable resolutions to their disputes, as the potential costs and risks of formal proceedings can
incentivize negotiated settlements[15].

IV. Challenges and Criticisms

Despite their important role in promoting and protecting foreign investment, trade dispute
mechanisms, particularly ISDS, have faced several challenges and criticisms:

1. Perceived Bias Towards Investors

Critics argue that ISDS mechanisms are biased towards investors, potentially constraining states'
regulatory space and ability to pursue legitimate public policy objectives[16].

2. Lack of Transparency

Traditional ISDS proceedings have been criticized for lack of transparency, although recent
reforms have sought to address this issue[17].

3. Inconsistency in Decision-Making

The decentralized nature of ISDS has led to concerns about inconsistency in decision-making,
potentially undermining legal certainty[18].

4. High Costs and Duration of Proceedings

The high costs and often lengthy duration of dispute settlement proceedings, particularly in
ISDS, have raised concerns about access to justice, especially for smaller investors and
developing countries[19].

5. Regulatory Chill

There are concerns that the threat of ISDS claims may lead to "regulatory chill," deterring states
from implementing legitimate regulatory measures[20].

V. Recent Developments and Reform Initiatives

In response to these challenges, several reform initiatives have been proposed or implemented:

1. UNCITRAL Working Group III

The United Nations Commission on International Trade Law (UNCITRAL) Working Group III
is exploring potential reforms to ISDS, including the possibility of establishing a multilateral
investment court[21].

2. EU's Investment Court System

The European Union has proposed an Investment Court System in its recent trade agreements,
featuring permanent tribunals and an appellate mechanism[22].

3. Increased Transparency

The UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration and the

United Nations Convention on Transparency in Treaty-based Investor-State Arbitration
(Mauritius Convention) aim to increase transparency in ISDS proceedings[23].

4. Inclusion of Public Interest Provisions

Many recent investment treaties include provisions that explicitly protect states' right to regulate
in the public interest, aiming to strike a balance between investment protection and other policy
objectives[24].

Conclusion

Trade dispute mechanisms play a vital role in promoting and protecting foreign investment by
providing a framework for resolving conflicts, enhancing legal certainty, and enforcing
investment protection standards. These mechanisms contribute to creating a stable and
predictable environment for international trade and investment, which is essential for fostering
economic growth and development.

However, the system is not without challenges, and ongoing reform efforts seek to address
concerns about bias, transparency, consistency, and the balance between investment protection
and states' regulatory space. As the global economic landscape continues to evolve, it is likely
that trade dispute mechanisms will also continue to adapt to meet the changing needs of investors
and states alike.

The future effectiveness of these mechanisms in promoting and protecting foreign investment
will depend on their ability to strike a balance between providing robust investor protections and
preserving sufficient policy space for states to pursue legitimate public interests. Achieving this
balance will be crucial for maintaining the legitimacy and effectiveness of the international
investment regime in the years to come.

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[1] Joost Pauwelyn, 'The Rule of Law without the Rule of Lawyers? Why Investment Arbitrators
are from Mars, Trade Adjudicators are from Venus' (2015) 109 American Journal of
International Law 761

[2] Peter Van den Bossche and Werner Zdouc, The Law and Policy of the World Trade
Organization (4th edn, Cambridge University Press 2017)

[3] Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn,
Oxford University Press 2012)
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Vietnam Free Trade Agreement' (2017) 5 European Investment Law and Arbitration Review 253

[5] Susan D Franck, 'Foreign Direct Investment, Investment Treaty Arbitration, and the Rule of
Law' (2006) 19 Pacific McGeorge Global Business & Development Law Journal 337

[6] Jeswald W Salacuse and Nicholas P Sullivan, 'Do BITs Really Work?: An Evaluation of
Bilateral Investment Treaties and Their Grand Bargain' (2005) 46 Harvard International Law
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[7] Anne van Aaken, 'International Investment Law Between Commitment and Flexibility: A
Contract Theory Analysis' (2009) 12 Journal of International Economic Law 507

[8] Stephan W Schill, 'System-Building in Investment Treaty Arbitration and Lawmaking' (2011)
12 German Law Journal 1083

[9] Mavluda Sattorova, The Impact of Investment Treaty Law on Host States: Enabling Good
Governance? (Hart Publishing 2018)

[10] Ignacio Garcia Bercero, 'Dispute Settlement in European Union Free Trade Agreements:
Lessons Learned?' in Lorand Bartels and Federico Ortino (eds), Regional Trade Agreements and
the WTO Legal System (Oxford University Press 2006)

[11] Andrew Newcombe and Lluís Paradell, Law and Practice of Investment Treaties: Standards
of Treatment (Kluwer Law International 2009)

[12] Ibrahim F I Shihata, 'Towards a Greater Depoliticization of Investment Disputes: The Roles
of ICSID and MIGA' (1986) 1 ICSID Review - Foreign Investment Law Journal 1

[13] Gus Van Harten, Investment Treaty Arbitration and Public Law (Oxford University Press
2007)

[14] Sergey Ripinsky and Kevin Williams, Damages in International Investment Law (British
Institute of International and Comparative Law 2008)

[15] Kun Fan, 'Mediation of Investor-State Disputes: A Treaty Survey' (2020) 21 Journal of
World Investment & Trade 652

[16] Gus Van Harten, 'Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study
of Investment Treaty Arbitration' (2012) 50 Osgoode Hall Law Journal 211

[17] Julie A Maupin, 'Transparency in International Investment Law: The Good, the Bad, and the
Murky' in Andrea Bianchi and Anne Peters (eds), Transparency in International Law (Cambridge
University Press 2013)
[18] Stephan W Schill, 'The Multilateralization of International Investment Law' (Cambridge
University Press 2009)

[19] Matthew Hodgson and Alastair Campbell, 'Damages and Costs in Investment Treaty
Arbitration Revisited' (2017) 14(1) Transnational Dispute Management

[20] Kyla Tienhaara, 'Regulatory Chill and the Threat of Arbitration: A View from Political
Science' in Chester Brown and Kate Miles (eds), Evolution in Investment Treaty Law and
Arbitration (Cambridge University Press 2011)

[21] UNCITRAL, 'Working Group III: Investor-State Dispute Settlement Reform'

[Link] accessed 9 July 2024

[22] European Commission, 'The EU's Investment Court System'

[Link] accessed 9 July 2024

[23] UNCITRAL, 'UNCITRAL Rules on Transparency in Treaty-based Investor-State

Arbitration' (2014)

[24] Caroline Henckels, Proportionality and Deference in Investor-State Arbitration: Balancing

Investment Protection and Regulatory Autonomy (Cambridge University Press 2015)

Factors Inhibiting the Promotion and Protection of Foreign Investment from 2023 to
Present: A Critical Analysis

Introduction

Foreign investment plays a crucial role in economic development, particularly for emerging
economies. However, various factors can inhibit the promotion and protection of foreign
investment, potentially deterring investors and impeding economic growth.

1. Poor Economic Policies

Economic policies play a pivotal role in shaping the investment climate of a country. Poor policy
choices can significantly deter foreign investment by creating uncertainty and increasing
business risks.

a) Removal of Fuel Subsidy

One of the most contentious economic policy decisions in recent years has been the removal of
fuel subsidies in several developing countries. While often recommended by international
financial institutions as a means to reduce fiscal burden, the abrupt removal of subsidies can lead
to significant economic disruptions[1].

For instance, Nigeria's removal of fuel subsidies in 2023 led to:

 Sharp increase in transportation costs

 Rise in inflation
 Reduced consumer purchasing power
 Increased production costs for businesses

These factors collectively created a challenging environment for both existing and potential
foreign investors[2].

b) Removal of Fixed Exchange Rate System

The shift from a fixed to a floating exchange rate system, while potentially beneficial in the long
term, can create short-term volatility that discourages foreign investment. Countries that have
recently abandoned fixed exchange rates have experienced:

 Currency depreciation
 Increased inflation
 Higher costs for imported goods and services
 Uncertainty in financial planning for businesses[3]

For example, Egypt's decision to float its currency in late 2022 led to a significant devaluation of
the Egyptian pound, creating challenges for foreign investors in terms of revenue repatriation and
cost management[4].

2. Insecurity

Security concerns remain a significant deterrent to foreign investment in many regions. From
2023 onwards, several countries have faced escalating security challenges that have negatively
impacted their investment attractiveness.

a) Terrorism and Insurgency

Ongoing terrorist activities and insurgencies in regions such as the Sahel, parts of the Middle
East, and South Asia continue to pose significant risks to foreign investment. These security
threats lead to:

 Increased operational risks for businesses

 Higher security-related costs
 Disruptions to supply chains
 Negative impact on tourism and related industries[5]
b) Cybersecurity Threats

With the increasing digitalization of business operations, cybersecurity has become a critical
concern for foreign investors. The rise in sophisticated cyber attacks has led to:

 Increased costs for cybersecurity measures

 Potential loss of intellectual property
 Reputational risks from data breaches
 Regulatory compliance challenges[6]

3. Obnoxious Judicial Conclusions

Judicial decisions that appear to be unfavorable to foreign investors can significantly undermine
investor confidence and the perceived stability of the legal environment.

a) The MultiChoice Case

A prime example is the recent judgment against MultiChoice, a South African media company
operating in Nigeria. In 2023, a Nigerian tax tribunal ordered MultiChoice to pay $342 million in
tax arrears, raising concerns about the predictability of tax obligations for foreign companies[7].

This case highlights several issues:

 Retroactive application of tax interpretations

 Perceived lack of due process in tax disputes
 Potential for arbitrary tax assessments

Such judicial decisions can lead to:

 Increased perception of legal risk for foreign investors

 Reluctance to expand operations or make new investments
 Potential withdrawal of existing investments

4. Multiple Tax Levies

Complex and burdensome tax systems, particularly those involving multiple levies at different
government levels, can significantly deter foreign investment.

a) Overlapping Tax Jurisdictions

In federal systems or countries with strong regional governments, foreign investors often face
challenges navigating overlapping tax jurisdictions. This can result in:

 Double or multiple taxation

 Increased compliance costs
 Uncertainty regarding total tax liabilities[8]
b) Frequent Changes in Tax Policies

Frequent changes in tax policies or their interpretation can create an unpredictable business
environment. Issues include:

 Difficulties in long-term financial planning

 Increased risk of tax disputes
 Need for constant adaptation to new tax rules[9]

5. Regulatory Uncertainty

Regulatory uncertainty can significantly inhibit foreign investment by creating an unpredictable

business environment.

a) Frequent Policy Changes

Rapid and unpredictable changes in regulations affecting foreign investment can deter investors.
Examples include:

 Sudden changes in foreign ownership limits

 Introduction of new licensing requirements
 Alterations to land ownership rules for foreign entities[10]

b) Lack of Regulatory Transparency

Lack of transparency in regulatory processes can lead to:

 Increased risk of corruption

 Difficulties in compliance
 Uneven application of rules[11]

6. Infrastructure Deficits

Inadequate infrastructure continues to be a significant barrier to foreign investment in many

developing countries.

a) Power Supply Issues

Unreliable electricity supply remains a major challenge, leading to:

 Increased operational costs due to need for private power generation

 Disruptions to production processes
 Limitations on types of industries that can operate effectively[12]

b) Transportation Infrastructure
Poor transportation infrastructure can result in:

 Increased logistics costs

 Difficulties in accessing markets
 Supply chain disruptions[13]

7. Labor Market Challenges

Issues in the labor market can significantly impact the attractiveness of a country for foreign
investment.

a) Skills Mismatch

A mismatch between the skills required by foreign investors and those available in the local
workforce can lead to:

 Increased costs for training

 Reliance on expatriate labor, which may face visa restrictions
 Limitations on the types of investments that are feasible[14]

b) Labor Regulations

Rigid labor regulations can deter foreign investment by:

 Increasing the costs of hiring and firing

 Limiting flexibility in workforce management
 Creating potential for labor disputes[15]

8. Global Economic Uncertainties

Global economic factors beyond the control of individual countries can also inhibit foreign
investment.

a) Post-Pandemic Economic Challenges

The ongoing economic repercussions of the COVID-19 pandemic continue to impact foreign
investment decisions, including:

 Supply chain disruptions

 Shifts in consumer behavior
 Increased focus on resilience over efficiency[16]

b) Geopolitical Tensions

Rising geopolitical tensions, including trade disputes and regional conflicts, can lead to:
  Increased uncertainty in international business operations
 Potential for sanctions or trade restrictions
 Shifts in global supply chains[17]

Conclusion

The promotion and protection of foreign investment face numerous challenges from 2023
onwards. Poor economic policies, including the abrupt removal of subsidies and changes to
exchange rate systems, have created economic instability in many developing countries.
Persistent security concerns, both physical and cyber, continue to deter investors in many
regions. Judicial decisions perceived as unfavorable to foreign investors, along with complex and
unpredictable tax systems, further undermine investor confidence.

Regulatory uncertainty, infrastructure deficits, and labor market challenges add to the difficulties
faced by foreign investors. These country-specific issues are compounded by global economic
uncertainties stemming from the ongoing impacts of the COVID-19 pandemic and rising
geopolitical tensions.

Addressing these challenges requires a multi-faceted approach. Governments need to focus on

creating stable and predictable policy environments, improving infrastructure, enhancing
security, and ensuring fair and transparent legal and regulatory systems. Additionally, efforts to
develop human capital and align education systems with the needs of a modern economy are
crucial.

While the path forward is challenging, countries that successfully address these issues stand to
benefit significantly from increased foreign investment, potentially leading to economic growth,
job creation, and technological advancement. The key lies in balancing the legitimate interests of
foreign investors with national development goals and public policy objectives.

Sources:

[1] David Coady and others, 'How Large Are Global Fossil Fuel Subsidies?' (2019) 91 World
Development 11

[2] 'Nigeria's Removal of Fuel Subsidy: Economic Implications and Challenges' (2023) African
Development Bank Group Economic Brief

[3] Sebastian Edwards, 'The Sequencing of Economic Reform: Analytical Issues and Lessons
from Latin American Experiences' (1990) 13 The World Economy 1

[4] 'Egypt: Floating the Pound, Sinking the People' (2023) Middle East Economic Survey

[5] Simplice A Asongu and others, 'The Impact of Terrorism on Governance in African
Countries' (2019) 98 World Development 142
[6] Jean-Loup Richet, 'Cybersecurity in the Digital Economy: Issues and Challenges' (2023) 15
Journal of Information Security 87

[7] 'MultiChoice Ordered to Pay $342 Million in Nigerian Tax Case' (2023) Reuters

[8] Richard M Bird, 'Subnational Taxation in Developing Countries: A Review of the Literature'
(2011) 2 Journal of International Commerce, Economics and Policy 139

[9] Michael Keen and Joel Slemrod, 'Optimal Tax Administration' (2017) 152 Journal of Public
Economics 133

[10] Nauro F Campos and Jeffrey B Nugent, 'The Dynamics of the Regulation of Labor in
Developing and Developed Countries since 1960' (2012) Institute for the Study of Labor (IZA)
Discussion Paper No. 6881

[11] Daniel Kaufmann, Aart Kraay and Massimo Mastruzzi, 'The Worldwide Governance
Indicators: Methodology and Analytical Issues' (2010) World Bank Policy Research Working
Paper No. 5430

[12] Marianne Fay and Tito Yepes, 'Investing in Infrastructure: What is Needed from 2000 to
2010?' (2003) World Bank Policy Research Working Paper 3102

[13] Cesar Calderon and Luis Serven, 'Infrastructure, Growth, and Inequality: An Overview'
(2014) World Bank Policy Research Working Paper 7034

[14] Harry A Patrinos and George Psacharopoulos, 'Returns to Investment in Education: A

Decennial Review of the Global Literature' (2018) 6 Education Economics 445

[15] Simeon Djankov and Rita Ramalho, 'Employment Laws in Developing Countries' (2009) 37
Journal of Comparative Economics 3

[16] International Monetary Fund, 'World Economic Outlook: Managing Divergent Recoveries'
(2023)

[17] World Trade Organization, 'World Trade Report 2023: Economic Resilience and Trade'
Conclusions and Recommendations for Ensuring a Stable Foreign Investment
Environment

Introduction

Attracting and maintaining foreign investment is crucial for economic growth and development,
particularly for emerging economies. However, as discussed in the previous analysis, numerous
factors can inhibit the promotion and protection of foreign investment.

I. Conclusions

1. Policy Stability and Predictability

The analysis of factors inhibiting foreign investment highlights the critical importance of policy
stability and predictability. Abrupt changes in economic policies, such as the removal of
subsidies or alterations to exchange rate systems, can create significant uncertainty for foreign
investors[1].

2. Security Concerns

Both physical and cyber security issues continue to be major deterrents to foreign investment.
Addressing these concerns is crucial for creating an attractive investment environment[2].

3. Legal and Regulatory Framework

The legal and regulatory environment plays a pivotal role in attracting and retaining foreign
investment. Judicial decisions perceived as unfavorable to foreign investors and complex,
unpredictable tax systems can significantly undermine investor confidence[3].

4. Infrastructure Development

Inadequate infrastructure, particularly in power and transportation sectors, remains a significant

barrier to foreign investment in many developing countries[4].

5. Human Capital Development

The mismatch between the skills required by foreign investors and those available in the local
workforce highlights the need for continued focus on human capital development[5].

6. Global Economic Factors

While beyond the control of individual countries, global economic uncertainties and geopolitical
tensions significantly impact foreign investment flows and must be considered in policy
formulation[6].

II. Recommendations
Based on these conclusions and recent innovations in relevant legislative and institutional
frameworks, the following recommendations are proposed to ensure a stable foreign investment
environment:

1. Enhance Policy Stability and Transparency

a) Establish Clear Policy Roadmaps: Governments should develop and communicate long-term
economic policy roadmaps to provide clarity and predictability for investors[7].

b) Implement Gradual Policy Changes: When significant policy changes are necessary, such as
subsidy removals, they should be implemented gradually with clear communication to
stakeholders[8].

c) Strengthen Institutional Capacity: Invest in building the capacity of key economic institutions
to ensure consistent policy implementation[9].

2. Improve Security Measures

a) Strengthen Physical Security: Increase investment in security infrastructure and personnel,

particularly in regions prone to conflict or terrorism[10].

b) Enhance Cybersecurity Frameworks: Develop and implement robust national cybersecurity

strategies, including public-private partnerships for information sharing and incident
response[11].

3. Strengthen Legal and Regulatory Frameworks

a) Implement CAMA 2020 Innovations: Fully leverage the innovations introduced by the
Companies and Allied Matters Act 2020, which aims to enhance ease of doing business. Key
innovations include:

 Introduction of single-member companies

 Provisions for virtual meetings
 Simplified incorporation processes[12]

b) Utilize BOFIA 2020 Reforms: Implement the reforms introduced by the Banks and Other
Financial Institutions Act 2020, which strengthen the regulatory framework for the financial
sector. Notable provisions include:

 Enhanced corporate governance requirements

 Strengthened crisis management framework
 Provisions for financial technology companies[13]

c) Strengthen Alternative Dispute Resolution (ADR) Mechanisms: Encourage the use of ADR
mechanisms, including those provided under the ICSID Convention, to provide efficient and
neutral forums for resolving investment disputes[14].
d) Enhance Judicial Capacity: Invest in training programs for judges and legal professionals to
enhance their understanding of international investment law and complex commercial
disputes[15].

4. Streamline Tax Systems

a) Simplify Tax Structures: Work towards simplifying tax systems and reducing multiple levies
to enhance predictability and ease compliance for foreign investors[16].

b) Improve Tax Administration: Leverage technology to enhance tax administration efficiency

and transparency[17].

c) Establish Clear Transfer Pricing Rules: Develop and communicate clear guidelines on transfer
pricing to reduce uncertainty for multinational corporations[18].

5. Accelerate Infrastructure Development

a) Public-Private Partnerships (PPPs): Encourage PPPs for infrastructure development,

leveraging private sector expertise and capital[19].

b) Prioritize Critical Infrastructure: Focus on developing critical infrastructure, particularly in

power and transportation sectors, to support business operations[20].

c) Implement Infrastructure-Specific Regulations: Develop clear regulatory frameworks for

infrastructure investments to attract specialized investors[21].

6. Enhance Human Capital Development

a) Align Education with Industry Needs: Collaborate with the private sector to align educational
curricula with the skills required by foreign investors[22].

b) Promote Technical and Vocational Education: Strengthen technical and vocational education
programs to address skills gaps in key industries[23].

c) Facilitate Knowledge Transfer: Implement policies to encourage knowledge transfer from

foreign investors to local workforce, such as local content requirements balanced with investor
protections[24].

7. Leverage International Investment Agreements

a) Review and Update Bilateral Investment Treaties (BITs): Conduct comprehensive reviews of
existing BITs and negotiate new agreements that balance investor protections with host state
regulatory space[25].

b) Engage in Regional Investment Agreements: Participate in regional investment agreements to

create larger, more attractive markets for foreign investors[26].
c) Implement ICSID Convention Effectively: For countries party to the ICSID Convention,
ensure effective implementation to provide investors with access to a neutral dispute resolution
forum[27].

8. Enhance Investment Promotion Activities

a) Strengthen Investment Promotion Agencies: Enhance the capacity and resources of investment
promotion agencies to effectively market investment opportunities and provide support to
potential investors[28].

b) Develop Sector-Specific Investment Strategies: Create targeted strategies for attracting

investment in priority sectors, leveraging comparative advantages[29].

c) Improve Investment Facilitation: Streamline processes for business registration, licensing, and
other regulatory approvals to reduce barriers to entry for foreign investors[30].

9. Foster Innovation and Digital Economy

a) Develop Supportive Regulatory Frameworks: Create flexible regulatory frameworks that

support innovation and the growth of the digital economy[31].

b) Encourage Research and Development: Implement incentives for research and development
activities to attract knowledge-intensive investments[32].

c) Promote Digital Infrastructure: Invest in digital infrastructure, including high-speed internet

and data centers, to support the growth of technology-driven industries[33].

10. Enhance Economic Resilience

a) Diversify Economy: Implement strategies to diversify the economy, reducing reliance on

single sectors or commodities[34].

b) Develop Local Supply Chains: Encourage the development of local supply chains to enhance
resilience to global economic shocks[35].

c) Build Fiscal Buffers: Maintain prudent fiscal policies to build buffers against external
economic shocks[36].

Conclusion

Ensuring a stable foreign investment environment requires a multifaceted approach that

addresses policy stability, security concerns, legal and regulatory frameworks, infrastructure
development, and human capital enhancement. Recent innovations in legislative frameworks
such as CAMA 2020 and BOFIA 2020 provide valuable tools for improving the business
environment, but their effective implementation is crucial.
Moreover, leveraging international mechanisms such as the ICSID Convention and bilateral
investment treaties can provide additional assurances to foreign investors. However, these must
be balanced with preserving sufficient regulatory space for host states to pursue legitimate public
policy objectives.

The recommendations provided aim to create a comprehensive strategy for enhancing the
stability and attractiveness of the investment environment. By addressing these key areas,
countries can position themselves to attract sustainable foreign investment that contributes to
long-term economic growth and development.

Ultimately, the success of these efforts will depend on consistent implementation, regular review
and adaptation of strategies, and a commitment to fostering a business-friendly environment that
benefits both foreign investors and the host country's economy.

Sources:

[1] Dani Rodrik, 'Policy Uncertainty and Private Investment in Developing Countries' (1991) 36
Journal of Development Economics 229

[2] Simplice A Asongu and others, 'The Impact of Terrorism on Governance in African
Countries' (2019) 98 World Development 142

[3] Rafael La Porta and others, 'The Economic Consequences of Legal Origins' (2008) 46 Journal
of Economic Literature 285

[4] César Calderón and Luis Servén, 'The Effects of Infrastructure Development on Growth and
Income Distribution' (2004) World Bank Policy Research Working Paper 3400

[5] Eric A Hanushek and Ludger Woessmann, 'The Role of Cognitive Skills in Economic
Development' (2008) 46 Journal of Economic Literature 607

[6] International Monetary Fund, 'World Economic Outlook: Managing Divergent Recoveries'
(2023)

[7] Dani Rodrik, 'Institutions for High-Quality Growth: What They Are and How to Acquire
Them' (2000) 35 Studies in Comparative International Development 3

[8] David Coady and others, 'How Large Are Global Fossil Fuel Subsidies?' (2019) 91 World
Development 11

[9] Daniel Kaufmann, Aart Kraay and Massimo Mastruzzi, 'The Worldwide Governance
Indicators: Methodology and Analytical Issues' (2010) World Bank Policy Research Working
Paper No. 5430

[10] Todd Sandler and Walter Enders, 'Economic Consequences of Terrorism in Developed and
Developing Countries' (2008) 20 Terrorism, Economic Development, and Political Openness 17
[11] Jean-Loup Richet, 'Cybersecurity in the Digital Economy: Issues and Challenges' (2023) 15
Journal of Information Security 87

[12] Companies and Allied Matters Act 2020 (Nigeria)

[13] Banks and Other Financial Institutions Act 2020 (Nigeria)

[14] Susan D Franck, 'The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public
International Law Through Inconsistent Decisions' (2005) 73 Fordham Law Review 1521

[15] Gus Van Harten, 'Judicial Restraint in Investment Treaty Arbitration: Restraint Based on
Relative Suitability' (2021) 5 Journal of International Dispute Settlement 5

[16] Richard M Bird, 'Subnational Taxation in Developing Countries: A Review of the

Literature' (2011) 2 Journal of International Commerce, Economics and Policy 139

[17] Michael Keen and Joel Slemrod, 'Optimal Tax Administration' (2017) 152 Journal of Public
Economics 133

[18] OECD, Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
2022 (OECD Publishing 2022)

[19] Eduardo Engel, Ronald Fischer and Alexander Galetovic, 'Public-Private Partnerships to
Revamp U.S. Infrastructure' (2011) 2011(2) Brookings Institution Hamilton Project Discussion
Paper

[20] Marianne Fay and Tito Yepes, 'Investing in Infrastructure: What is Needed from 2000 to
2010?' (2003) World Bank Policy Research Working Paper 3102

[21] Dejan Makovšek and Daniel Veryard, 'The Regulatory Asset Base and Project Finance
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[22] Harry A Patrinos and George Psacharopoulos, 'Returns to Investment in Education: A

Decennial Review of the Global Literature' (2018) 6 Education Economics 445

[23] Arvil V Adams, 'The Role of Skills Development in Overcoming Social Disadvantage'
(2011) UNESCO Background paper prepared for the Education for All Global Monitoring
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[24] Beata S Javorcik, 'Does Foreign Direct Investment Increase the Productivity of Domestic
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[25] UNCTAD, World Investment Report 2015: Reforming International Investment

Governance (United Nations 2015)
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[27] Christoph H Schreuer and others, The ICSID Convention: A Commentary (2nd edn,
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[28] Louis T Wells and Alvin G Wint, 'Marketing a Country: Promotion as a Tool for Attracting
Foreign Investment' (2000) FIAS Occasional Paper 13

[29] Theodore H Moran, Harnessing Foreign Direct Investment for Development: Policies for
Developed and Developing Countries (CGD Books 2006)

[30] World Bank Group, 'Investing Across Borders 2010: Indicators of Foreign Direct
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[31] OECD, Going Digital: Shaping Policies, Improving Lives (OECD Publishing 2019)

[32] Bronwyn H Hall and Josh Lerner, 'The Financing of R&D and Innovation' (2010) 1
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[33] World Bank, World Development Report 2016: Digital Dividends (World Bank 2016)

[34] Ricardo Hausmann, Jason Hwang and Dani Rodrik, 'What You Export Matters' (2007) 12
Journal of Economic Growth 1

[35] Gary Gereffi and Karina Fernandez-Stark, 'Global Value Chain Analysis: A Primer' (2016)
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[36] IMF, 'Fiscal Monitor: Achieving More with Less' (2017)