Since the government of Nigeria is strapped for cash, it has decided to tax all foreign investments (such as oil production equipment) by up to 40 percent of the appraised value. The Nigerian government has found that this is the handiest and quickest means of finding operating funds. The economic risk in discussion here is:

Question

Quizplus · Accepted Answer

Taxes must be classified as a political risk when used as a means of controlling foreign investments. In such cases, they are raised without warning and in violation of formal agreements. As the Nigerian government has used taxing as a means of controlling foreign investments, the economic risk in discussion here is tax controls.

Since the Government of Nigeria Is Strapped for Cash, It