The Nigerian Government, led by President Obasanjo, conscious of the over-dependence on Oil which constitutes about 95% of generated revenue, has embarked on many measures to give the Nigerian a new lease on life.
All business enterprises must be registered with the Registrar-General of the Corporate Affairs Commission (Registrar of Companies). A foreign investor wishing to set up business operation in Nigeria should take all steps necessary to obtain local incorporation of the Nigerian branch or subsidiary.
Under the privateisation programme as announced on July 20, 1998 by H.E Gen Abdulsalami Abubakar, Government will retain 40% of the telecom, electricity, petroleum refineries, coal and bitumen production, tourism, and spill-overs from the first phase of privatisation equities of the affected enterprises whilst 40% will be alienated to strategic investors with the right technical, financial and management capabilities.
The agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever increasing demand for agricultural produce. Although the agricultural sector remains a dominant employer of labour, serious investment is needed across the board to enhance production and increase the contribution of the sector to GDP.
Joint Venture & Investment Opportunities in the Transportation Sector.
As part of the efforts to provide an enabling environment that is conducive to the growth and development of industries, inflow of foreign direct investment (FDI), shield existing investments from unfair competition, and stimulate the expansion of domestic production capacity; the Federal Government of Nigeria has developed a package of incentives for various sectors of the economy. These incentives, it is hoped, will help revive the economy, accelerate growth and development and reduce poverty.
Nigerian Investment Promotion Decree
Foreign Exchange Decree
Securities and Exchange Commision Act
Exchange Control Regulations
The Nigerian Financial System
Privatisation and Commercialisation Decree
Protection of Industrial Investment and International Trade Business
Nigeria is a country endowed with arable land and abundant natural resources. Government policy has been directed towards ensuring that what nature has provided is harnessed and utilized to the fullest, for the benefit of the citizenry.
The thrust of the nation's current economic development policy is as enunciated in the VISION 2010 Report which is: To make Nigeria a major industrial nation and economic power that continually strive for sustained economic growth and development towards the quality of life for all Nigerians.
Development of a strong public and private sector partnership which fosters a strong economy that is private sector-driven with the government as the enabler.
Enhancement of exploitation of the nation's hydrocarbon, agricultural and mineral resources, tourism and sporting talents;
Promotion of entrepreneurship and competition within the ambit of fair, equitable and enforceable laws;
Massive investment in education, health, technology and infrastructure;
Involvement of the community in projects from conceptualization through execution to maintenance;
Movement towards export-oriented production manufacturing and industrial sectors;
Promotion of indigenous entrepreneurship and building of a strong and viable indigenous private sector; and Opening up the economy to participation by more indigenous and foreign investors.
The realisation of these aspirations, had informed the radical and pragmatic econorm'c reforms introduced since the mid 1980's. The reforms were designed to increase the attractiveness of Nigeria’s investment opportunities and foster the growing confidence in the economy. The reforms resulted in the adoption of liberal and market oriented economic policies, the stimulation of increased private sector participation and elimination of bureaucartic obstacles which hinder private sector investment and long term profitable business opertions in Nigeria. Some of the Significant legislations are as follows.
This decree completely eliminates all quatitative and qualitative and barriers to free investment in the the country particularly for foreign investor. The provisions of the Decree allows foreign investors to buy unlimited shares of the quoted companies through the Nigerian Stock Exchange in any covertible currency and also 100% equity ownership of business is allowed. The decree establishes the Commission as one-stop-agency which facilitates investment location and provides the investor access to profitable business ventures and granting of necessary pre-investment approvals. The Nigerian Investment Promotion Commission, NIPC Decree repealed the Industrial Development Coordination Committee (IDCC) Decree No. 36 of 1988 and the Nigerian Enterprises Promotion Decree (NEPD) of 1972 as amended in 1977 and 1989 which hitherto reserved for Nigerians the ownership of certain business.
Foreign Exchange (Monitoring and Miscellaneous Provision) Decree No. 17 of 1995
This Decree abolishes all restrictions on importation of Foreign and repatriation of deividends. The operation of the Autonomous Foreign Exchange Market as provided for in the Decree, liberatlize the FEM operations. The Decree repealed the Exchange Control Act No. 16 of 1962 in its entirety.
Securities and Exchange Commision Act of 1979
This empowers only the commission to regulate the capital market and determine the price, amount and time which securties of all public compnies and enterprises having alien interests are sold to the public whether by offer for sale or subscription. Foreign investors would be allowed to participate in quoted and bond transactions on the Nigerian Stock Exchange without any restriction.
Regulation of Capital, profit and dividends are allowed, while technical fees and royalties on imported technical services and technologies are payable. Repatration of proceeds from disposal of assets is allowed. Foreign Exchange Transactions are carried out at the Autonomous Foreign Exchange Market.
The Nigerian Financial System comprises the regulatory/supervisory authorities, banks and "other" financial institutions. The regulatory/ supervisory authorities are the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Federal Ministry of Finance (FMF), the Nigerian Insurance Supervisory Board (NISB) and the Federal Mortgage Bank of Nigeria (FMBN). There are several commercial and merchant banks in providing fast and efficient financial services to their clients.
Privatisation and Commercialisation Decree No. 25 of 1988 as amended in Decree No. 28 of 1999 (Government Notice no. 70.) The privatisation and commercialisation de provided for the divestment of Government’s interest in some public enterprises which are best suited for private sector management. The law also stopped further injection of government funds into enterprises that could be better operated on commercial bases.
Nigeria's membership of the World Bank's Multi-lateral Investment Guarantee Agency (M.1. G. A) as well as the operation of the bilateral Investment Promotion and Protection Agreement (I.P.P.A) between Nigeria and any interested party country, make for adequate protection of foreign investment in Nigeria. The instrumentality of the Patents and Design Decree of 1970 affords protection and transferability of shares of joint owners of a patent or design registered in Nigeria; while that of the Trade Mark Act of 1956 affords protection of the exclusive right of a proprietor of a trade mark.
There are over 2000 industrial establishments in the country. Among these are a giant oil industry, Iron complexes, steel rolling mius, pharmaceutical industries, food processing, car assembling and the up-coming Export Processing Zone (EPZ). Govemment economic policy favours and places priority on greater investment in agricultural production and manufacturing and exports of production, abundantly skilled and versatile human resources and access to a vast local market of over 100 million people and beyond in the sub-region. Sectoral highlights are addressed in the following sections:
There are four Industrial Sectors which are considered priority areas of development because of their linkage effects on the other sectors and potential catalytic role in the overall growth of the industrial sectors. These priority areas which are most favoured in the administration of government industrial incentives are:
Agriculture (Forest-based and agro-allied activities)
Specifically the industrial projects desired from these sectors are:
Foundries and Forges;
Metal Fabrication/Machine Tools;
Rubber and Plastic;
Leather and Leather products;
Textiles and Weaving apparels;
Other non-metallic material building materials; bricks, ceramic glass;
Sugar, Confectioneries and Beverages Cereal and Grain Milling;
Fruits, Vegetables, Vegetable Oils, Oil Seeds, Roots and Tubers.
In addition to the twelve identified priority areas menfioned above, investors are welcome to also participate wholly or jointly with Nigerians in the following specific projects:
gemstones cutting and polishing;
mini-sugar production plants;
multi-mineral plant for gypsum, talc, kaolin, marble/dolornite, baryte etc;
cement production (700- 1000 metric tonne per day) lead and zinc project processing of salt from sea water;
sodium trisphosphate production small medium scale plant for sheet metal roduction mining of industrial minerals; bitumen etc; stone cutting/polishing; fabrication of spare parts; exploitation of coal with known reserve of 293 140 000 tonnes in Enugu, Kogi and Adamawa States timber/wood processing