Impacts of Oil Foreign Direct Investment on Environment and Poverty Level in Niger Delta Oil Producing Region: A Structural Equation Modeling Approach

Abstract

This study examines impacts of oil foreign direct investment on the environment and welfare of people of Niger delta oil producing communities, using structural equation models. Overall, it was found that oil foreign direct investment has consistent impact on the environment than the well-being of the community, which results in high levels of poverty. The implication is that there is environmental diseconomies and widespread of poverty in the area. Thus, there is need for fostering sustainable partnership between the oil foreign direct investors and the host communities by suitable consideration of the issues of mitigation of environmental problems that will reduce the poverty level of the people. The environmental and socioeconomic system should be developed to maintain an intensity of biodiversity that will give assurance to the buoyancy of the ecosystems on which human consumption and production depend. Keywords: Foreign direct investment; environmental degradation; poverty; structural equation modeling JEL Classifications: C39; F21; F64; I31