NIGERIA:
Economic Heart of Africa
A PRESENTATION
BY
MRS. A. P. OKALA
For: EXECUTIVE SECRETARY/CEO
NIGERIAN INVESTMENT PROMOTION COMMISSION
AT
2016 ASBF
Innoson Vehicle Manufacturing Company, Nnewi
Country Profile
AFRICA
Located in West Africa
Occupies 923,768 square kilometers of land
Rich diverse culture with more than 250
ethnic groups
36 states with Abuja as the federal Capital
Territory
Third tier of government consists of 774
local government areas
Official language is English
Time zone is GMT +1
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Nigeria is one of the largest economies in Africa with impressive GDP growth rate. With a population that
could become the third largest in the world by 2050, Nigeria presents a large market of consumers.
•Nigeria became the biggest economy in Africa in 2014 with a GDP of US$568.5 billion and is projected to
become the first trillion dollar economy in Africa by 2030.
•GDP growth averaged 7 percent between 2007 and 2015 but has slowed down with the global drop in
commodity prices.
•The country has a high propensity to consume with a growing middle class and a youthful population.
Nigeria is projected to become the 3rd most populous country in the world by 2050. It is currently the 8th
most populous country with a population of 181 million.
•Nigeria has had 16 years of unbroken democracy including a peaceful transition of power to the erstwhile
opposition party in 2015.
•Its market driven economic policies have made it the largest recipient of foreign direct investments in Africa
with FDI flows of US$44.5 billion between 2009 and 2015.
•With English as its official language, it is a major trading partner with the western world and Asia
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Analysis of FDI inflow into Nigeria
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Success Stories: Investment Trends in Nigeria
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WHY NIGERIA?:
- a large captive market, abundance of natural
resources, cheap workforce that is dynamic and
well-educated, investor-friendly government policies,
and strategically located to serve the African market
with access to the rest of the world.
- High Returns on Investment
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Basic National Investment Legislation-
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•The Nigerian Investment Promotion Commission Act 16 of 1995
–Registration of Businesses with Foreign Participation
–Ownership
–100% ownership assured except investment
–listed under the ‘Negative ‘ lists
–Investment Protection Guarantees
–Non-expropriation of Investment
–Compensation
–Alternative Dispute Resolution
–Free transfer of profits
•The Foreign Exchange (Monitoring & Miscellaneous Provisions) Act 17 of 1995
– Repatriation of Profit
–Under the Act 17 of 1995, investors are free to repatriate their profits and dividends net
of taxes through any authorized dealer in freely convertible currency
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Basic National Investment Legislation
•The Companies and Allied Matters Act, Cap. 20 LFN 2004
 Regulation and supervision of the formation, incorporation, registration,
management and winding up of companies.
Maintenance of companies’ Registry
Investigation into the affairs of any company in the interest of
Shareholders and the Public
Immigration Act
Issuance of Business Permits
Issuance of Expatriate Quota positions
Issuance of Work Permits
Monitoring of the Quota positions to ensure effective transfer of
technology to Nigerians and eventual indigenization of the positions
occupied by Expatriates.
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Statutory Protection for FDIs
UNDER NIPC ACT, NO. 16 of 1995
•Protection against unlawful expropriation.
•Provides guarantee for free transfer of funds.
•Grants judicial determination of the amount of
compensation to which the investors is entitled in accordance
with international standards.
•Sets out non-discriminatory access to both foreign and
domestic investors.
•Provides access to international arbitration Forums in the
event of a dispute arising between a foreign investors and the
Government.
•Investment Facilitation
•Hand holding support for investors
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Statutory Protection for FDI:
Under the Foreign Exchange Monitoring and Miscellaneous
Provision Act
•Complements the NIPC Act.
•Eases restrictions in Foreign Exchange dealings
•Creates autonomous Foreign Exchange market.
•Repealed the Exchange Control Act No. 16 of 1962 that imposed significant restrictions
on exchange transactions
•Enables cash transfer without prior approval
•Opened up the Nigerian Capital market to foreign portfolio investment.
•Foreign Exchange purchased from the market may be repatriated from Nigeria without
hindrance.
•Foreigners are allowed to invest in, acquire, dispose of create or transfer any interest in
securities and other money market instruments in local or foreign currency.
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Additional Protections
•Review of Nigeria’s model Investment Promotion
and Protection Agreement (IPPA).
Includes National Treatment Clause
Most Favored Nation provisions
Includes a Minimum Standard of Treatment clause for
additional protection
Guarantees against Expropriation
Compensation in line with internationally acceptable
standards
Promotion of sustainable development objectives
Investor State Dispute Settlement Mechanism
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The government is focused on five priority sectors: agriculture, power infrastructure development,
manufacturing, real estate and housing, and healthcare.
•Agriculture presents a $1.2 bn
opportunity in import substitution for
the Rice and Cassava with abundant
raw materials in Nigeria. In order to
improve food export earnings and
reduce imports, the sector requires an
investment of about US$2.4 billion
annually (US$500 million of this
amount is attributable to irrigation)
•Manufacturing presents a $8.17 bn
opportunity.
•Automotive: $4.2 bn spent on vehicle
importation
•Electronics: $0.73 bn
•Textile & Garments: $3.24 bn export
value for leather products
•Housing presents a $10bn opportunity
annually given Nigeria’s 17 million
housing unit deficit.
•Power infrastructure presents a $550
bn opportunity in generation,
transmission, distribution, and services.
Nigeria produces only 3,500MW with a
20,000MW goal.
•Generation: $14 billion
•Transmission: $2 billion
•Distribution: $2 billion
•Healthcare presents a $6 bn
opportunity. Nigerians spend about
$0.8 bn in medical tourism every year.
Source: National Integrated Infrastructure Master Plan, The Atlas of Economic Complexity.
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The new administration is committed to improving Nigeria’s investment climate with a goal of achieving a
sub-100 ranking in the World Bank Doing Business ranking.
- Presidential Committee on Ease of Doing Business
•The following requisite Doing Business reform actions
have been implemented by the new administration:
•Starting a Business
•All registered names online are uploaded online
•All fees are paid online
•Incorporation documents are completed online
•Incorporation documents are emailed and couriered
•FIRS payment from the online payment are transferred
promptly
•Cash payments of taxes and stamp duties have been
eliminated
•Getting Electricity
•Stakeholder meetings are scheduled monthly to help the
various stakeholders in the process identify ways of
improving and streamlining the connection process
•Sixty days have been set for installation of meters and
other connections following a request submission and
commensurate penalties have been instituted for
defaulters
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•Paying Taxes
•The availability of online tax filling and payment have
been publicized
•The tax filling and payment process are simplified
•Information on firms that enable online filing and payment
of taxes have been provided
•SMEs’ use of online tax filing and payment has been
enhanced
•The multiple taxation issue has been investigated and
resolved through the establishment of the Joint Tax Board
(JTB)
•Trading Across Borders
•Documentation, requirements, fee structure, and
amendments to relevant legislations are made available
online to the public
•The fast track customs clearance procedures and
“referential trader” status have been spread to different
ports
•The Nigeria Customs Service has improved risk based
inspections
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The current administration has zero tolerance policy towards corruption and has
pledged to restore security to parts of the country that were under attack by terrorists
•SECURITY
•The current administration has delivered on its campaign promise to contain the
actions of Boko Haram - the terrorist organisation in Northeast Nigeria. The Nigerian
Military has reclaimed all the territory that was lost to the terrorist organisation and
has begun the final campaign to demolish their capacity for major attacks.
•The administration has also stabilised the security situation in the Niger Delta. It has
sustained the support for the Presidential Amnesty Programme for the ex-militants in
the Niger Delta while commencing efforts to redevelop the region.
•CORRUPTION
•The current administration is also delivering on its promise to curb the corruption
problem in Nigeria.
•Many political bigwigs have been arrested and are currently in detention undergoing
trial while the others are on the run. It is evident today that all acts of corruption will
be prosecuted.
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NIGERIAN INVESTMENT PROMOTION
COMMISSION
•Co-ordinate, promote and facilitate domestic and foreign
investments into Nigeria
•Support and provide necessary assistance and guidance to
foreign and domestic investors in Nigeria
•Develop and implement innovative, focused and effective
investment promotion strategies
•Target and attract investment into the economy
•Advise government on policy matters
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NIPC (Contd.)
•Investment Promotion / Image building
•Investment Facilitation
•After care
•Policy Advocacy
•Investment coordination:
 Liaison with other MDAs
 ONE STOP INVESTMENT CENTRE
•Incentive negotiation and administration
•Adminstration of Pioneer Status Incentive
•Robust Governing Council
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INVESTOR-FRIENDLY INCENTIVES: The Federal Government of Nigeria has
created incentives to ensure the success of business enterprises so investors can
find time to enjoy the hidden jewels of beauty.
-High Returns on Investment
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Nigeria has a portfolio of incentives to encourage investment in a range of industries. The government is
open to discuss and resolve any challenges to investment in the country.
•Statutory Incentives:
•Pioneer Status: 3 to 5 years tax holiday
•100 percent repatriation of profit
•Aviation sector
•0% import duty and VAT for commercial aircrafts and aircraft spare
parts imported for use in Nigeria
•Capital Allowances:
•Up to 120 percent of expenses on (R&D) are tax
deductible, provided that such R&D activities are
carried out in Nigeria and are connected with the
business from which income or profits is derived.
•For the purpose of R&D on Local raw materials,
140 percent of expenses are allowed.
•Investment in infrastructure: 20 percent of
incurred costs
•Minimum local raw materials utilization: 20
percent for 5 years
•Very low Value Added Tax: 5 percent
•Export Incentives:
•Export expansion grant: Up to 30 percent of
value
•Free Trade Zones:
•Calabar Free Trade Zone
•Onne Oil & Gas Free Trade Zone
•Lekki Free Trade Zone
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•Sugar production
•0% import duty on machinery and spare parts for use in local
sugar manufacturing industries
•5-year tax holiday for investments sugar value chain
•10% import duty on imported raw sugar plus 50% levy
•20% import duty on imported refined sugar plus 60% levy
•Solid Minerals & Mining Sector
•0% import duty and VAT on machinery and equipment imported for
use in Nigeria
•Agriculture/ Agro-Allied Sector
•0% import duty on machinery and equipment
•Tax relief on interest income
•Power generation and distribution
•0% import duty on equipment and machinery
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Nigeria has a portfolio of incentives to encourage investment in a range of industries. The government is
open to discuss and resolve any challenges to investment in the country.
•Statutory Incentives:
•Pioneer Status: 3 to 5 years tax holiday
•100 percent repatriation of profit
•Aviation sector
•0% import duty and VAT for commercial aircrafts and aircraft spare
parts imported for use in Nigeria
•Capital Allowances:
•Up to 120 percent of expenses on (R&D) are tax
deductible, provided that such R&D activities are
carried out in Nigeria and are connected with the
business from which income or profits is derived.
•For the purpose of R&D on Local raw materials,
140 percent of expenses are allowed.
•Investment in infrastructure: 20 percent of
incurred costs
•Minimum local raw materials utilization: 20
percent for 5 years
•Very low Value Added Tax: 5 percent
•Export Incentives:
•Export expansion grant: Up to 30 percent of
value
•Free Trade Zones:
•Calabar Free Trade Zone
•Onne Oil & Gas Free Trade Zone
•Lekki Free Trade Zone
August 2016
•Sugar production
•0% import duty on machinery and spare parts for use in local
sugar manufacturing industries
•5-year tax holiday for investments sugar value chain
•10% import duty on imported raw sugar plus 50% levy
•20% import duty on imported refined sugar plus 60% levy
•Solid Minerals & Mining Sector
•0% import duty and VAT on machinery and equipment imported for
use in Nigeria
•Agriculture/ Agro-Allied Sector
•0% import duty on machinery and equipment
•Tax relief on interest income
•Power generation and distribution
•0% import duty on equipment and machinery
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TESTIMONIALS: Global corporations that are already invested in Nigeria can
not stop blowing their trumpet for the opportunities that exist in the country
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Jeffrey Immelt, Chairman and CEO, General
Electric
George Nassar, Managing Director P&G Nigeria
Kelvin Balogun, President, Central, East and West
Africa at The Coca-Cola Company
“Nigeria has all the natural resources and pretty
good entrepreneurial class. I want Nigeria … right
here and right now. This is the time.”
“Innovation is one of P&G’s and by extension,
Nigeria’s most vital methods for growth and
development.”
“We are extremely optimistic about Nigeria’s
continued economic and social growth and
recognize the importance of … broadening our
portfolio and introducing new products.”
•GE has been active in Nigeria for
over 40 years in aviation, power, oil
and gas, healthcare, and
transportation.
•P&G started operations in Nigeria in
1992 and is now expanding from
Nigeria to other African countries.
•Coca-Cola began production in
Lagos in 1953 and now employs over
4,800 people.
•GE in Nigeria employs over 500
Nigerians and serves over 100 public
and private sector customers from its
offices in Lagos, Port Harcourt, Onne
and Abuja.
•For more information, please visit:
•http://www.ge.com/africa/company/nigeria
NIGERIA: Economic Heart of Africa
•P&G employs over 1,800 direct and
indirect employees through its general
offices in Lagos and manufacturing
facilities in Ibadan.
•In June 2015, P&G increased its
investments in Nigeria by an
additional US$300 million.
•Coca Cola recently acquired 40
percent equity (valued at US$240
million) in CHI Limited, a Nigerian fruit
juice company. It will complete a 100
percent acquisition of the company in
three years.
•For more information, please visit:
•http://www.nigerianbottlingcompanyltd.com/
Home/
•For more information, please visit:
•http://www.pg.com/en_NG/
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August 2016
Jacky Lee, MD, Huawei West Africa
Xu Zhiming, President, Yuemei Group
Cao Baogang, Chairman, CCECC
“Coming to Nigeria is our biggest move in West
Africa.”
“We built the first Chinese textile industrial park in
Nigeria to enable more Chinese textile enterprises
make their way to doing business abroad. ”
“We are happy to be involved in rail projects that
will improve the economic activities across
Nigerian states.”
•Huawei began operations in Nigeria
in 2005, and are the biggest vendors
to MTN, Airtel, Globaccom, Visafone
and Starcomms.
•Yuemei Group began operations in
Nigeria first in 2000 through one of its
subsidiaries; China-Nigeria Textile Co.
Ltd.
•Huawei through one of its
programmes; “Huawei Seeds for the
Future” plans to provide 2,000 ICT
trainee jobs to young Nigerians by
2016.
•In 2004, Yuemei Group established
Jinmei (Nigeria) Textile Co., Ltd in
Nigeria’s Calabar Free Trade Zone
with an investment of US$12 million.
The group also built China’s first
textile industrial park
•Established in 1979, CCECC has
been listed among the world’s top 100
international contractors for 17
consecutive years by the Engineering
News Record. The company has
business activities in over 50
countries.
•For more information, please visit:
•http://www.huawei.com/ng/
•For more information, please visit:
•http://www.chinayuemei.com/en/porductsinfo.asp
x?id=189
•In April 2015, CCECC signed a $3.2
billion light rail contract with the
government of Ogun State.
•For more information, please visit:
•www.ccecc.com.cn/en/
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August 2016
Li Xuhui, Vice-President, CGCOC Group
Paul Polman, Global CEO, Unilever
Jacky Hathiramani, CEO, KIA Motors Nigeria (trading as
United Vehicle Assembly Limited)
“Partner for African development, bridge for ChinaAfrica cooperation.”
“We will continue to invest in Nigeria and our
growth rate is accelerating. We also think that the
enormous potentials in the country are being
unlocked.”
“We are committed to making Nigeria a leading
auto manufacturing country in Africa and also to
contribute immensely to the development of the
nation through this multi-billion Naira investment.”
•CGCOC Group began operation in Nigeria in
1983，and now has business activities in over 30
countries in Africa.
•Incorporated in 1923, Nigeria Stock
Exchange-listed Unilever Nigeria Plc.
is the oldest manufacturing company
in Nigeria.
•Kia Motors Corp., with its head office
in Seoul, is South Korea's secondlargest automobile manufacturer, with
sales of 2.75 million vehicles in 2013.
•Around 50% of Unilever’s Africa
investments are in Nigeria. In 2015,
Unilever announced a €120m
investment for Nigeria and pledged to
attract an additional €120m from other
investors.
•Kia Motors Nigeria recently unveiled
plans to invest in a car manufacturing
facility in Nigeria to produce 25,000
cars per annum. The models to be
manufactured in Nigeria include Kia
Rio, Cerato, Optima, Sorento and
Soul.
•Sticking to the business philosophy that
“Cooperation
Breeds
Wealth,
Innovation
Empowers Development”, CGCOC Group is
mainly engaged in roads and bridges, water
supply, irrigation systems, trade and logistics. It
has over 4,000 employees in Nigeria.
•In 2013, the group built an agriculture high-tech
industrial park in Abuja. Up to now, the group has
invested $80 million in agriculture, real estate and
industry. Recently, It also plans further
investments of $250 million in solar energy,
agriculture and mining.
•For more information please visit:
•http://www.cgcoc.com.cn/
NIGERIA: Economic Heart of Africa
•For more information, please visit:
•http://www.kiamotorsnigeria.com/tour/
•For more information, please visit:
•www.unilever.com
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August 2016
Ms. Ladi S. Katagum
Acting Executive Secretary/CEO,
Nigerian Investment Promotion Commission
(NIPC)
Plot 1181 Aguiyi Ironsi Street
Maitama District, Abuja, Nigeria
Email: [email protected] | [email protected]
Website: www.nipc.gov.ng
Social Media: Facebook.com/nipcng | Twitter.com/nipcng |
Youtube.com/nipcng
April 2016
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