Transcript House of Lords and the Britain

PRESENTATION
BY
Engr. Mustafa Bello, FNSE
Executive Secretary
NIGERIAN INVESTMENT PROMOTION COMMISSION
AT THE MEETING/DINNER
HOUSE of the LORDS
&
THE BRITAIN-NIGERIA ASSOCIATION
20th JULY 2004
Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi
Street, Maitama District, Abuja. 09-4134317
www.nipc-nigeria.org .
DOING
BUSINESS IN
NIGERIA
Nigeria – A preferred
Destination

Prime investment location in Africa with an internal market of
over 120 million people
 Highly competitive factor cost – labour, land, accommodation,
utilities and natural resources
 A relatively well-educated and easily trainable labour pool
 Strategic location along the West Africa sea routes with welldeveloped harbours and airports
 A broad sector base economy with an extremely wide range of
sector-investment opportunities for domestic as well as foreign
investors
 A good tourism destination – with a multi-cultural life style
 A sub-regional and regional integration, providing a common
market of over 200 million people
Reforms in Progress
– Privatization, deregulation & decentralization
– Improved transport & communications
– Efficient banking system
– Highly motivated and trainable labour force
– Vibrant civil service
– Good governance initiatives
– Adoption of multi-party system & institutionalization
of democracy
Investment Climate –
The Big Difference!

Conviction and leadership necessary to deliver
institutional change
 Deregulated & liberal FDI regime – (Market
competition & policy coherence)
 Concerted fight against corruption and Economic
crimes
 Virile Private Sector
 Transparent, simple & stable application of tax
laws and administration
Investment Climate
The Big Difference!
 Strong
(Cont’d)
& independent legal institutions
 Strong & autonomous financial
institutions
 Strict adherence to accounting standard
 An effective and well maintained
institution for FDI - NIPC
 Sound macroeconomic fundamentals
Foreign Investment
Regulations & Laws
There are two principal laws guiding investment
 Nigerian Investment Promotion Commission Act 16 of 1995
– Major Features



Liberalization of the economy
100% ownership of investment in any sector (except ones
listed in the ‘negative’ list) irrespective of nationality
Guarantee against nationalization or expropriation by government of
the federation
Guarantee unconditional transferability/repatriation of funds through
an authorized dealer, in freely convertible currency
– Provision

An enterprise, in which foreign participation is permitted, shall after
its incorporation with CAC, be registered with the NIPC
Foreign Investment
Regulations & Laws (Cont’d)

Foreign Exchange (Monitoring & Miscellaneous Provisions) Act
17 of 1995
– Major Features




Foreign currency may be repatriated from Nigeria and shall not be subject to
any further approval provided it is done through an authorized dealer
Any person may invest in any enterprise or security with foreign currency or
capital imported into Nigeria through an authorized dealer
Any person may open, maintain and operate a domiciliary account
designated in foreign currency with an authorized dealer
A person whether
– Resident in or outside Nigeria
– A citizen of Nigeria or not
may deal in, invest in, acquire or dispose of, create or transfer any interest in
securities and other money market instruments whether denominated in
foreign currency in Nigeria or not.
Other Major Legislations
Guiding Investment

Immigration Act of 1963
 The Companies and Allied Matters Act of
1990 (as amended)
 The National Office of Technology
Acquisition and Promotion Act of 1979
 The Investment and Security Act of 1999
Procedure for Starting
Business

Incorporate with CAC
 Register with Tax Authority
 Obtain operating license (where applicable)
–
–
–
–

DPR – Oil & Gas Sector
NCC – Telecommunications Sector
CBN – Financial Sector
FMSMD – Solid minerals Sector, etc
Acquire operating Premises
 Register with NIPC
 You are in Business in Nigeria
Basic Factor Cost
Land – (N7,000 - N15,000)/sqm
 Labour – N90,000 per annum


– Fixed – N4 per min
– Mobile (GSM)
 70k per sec
 N21 per min
– Internet Connectivity
(minimum basic wage)

Power
– Residential – N4 per unit
– Commercial – N6 per unit


Water Transport
– Air (Local) – N9,000
– Road
 Intercity – N300 per 60km
 Intracity - N400 per hr
Telecommunications

Accommodation
– Residential
 Rent - (N10,000 –
N15,000)/sqm/yr
– Office
 Rent – (N10,000 –
N15,000)/sqm/yr
– Hotel
 N15,000 – N25,000 per night
Investment Opportunities
Nigeria is rich in natural resources (e.g. agric, fishing,
forest & mineral resources, oil & natural gas, etc)

Services industry/Construction
– Waste Management (collection of refuse, estab. of
dumping sites & incinerators, conversion of waste to gasohol
etc.)
– Health Care Facilities & Equipment (manufacture
of syringes and basic medical equipment)
– Real Estate Development
Investment Opportunities
(Cont’d)
Manufacturing / Agro processing

Palm Oil Processing
 Wood Products –furniture
 Rubber Products – tyres,
condoms

Fruit Juice – current ban on
importation of juice

Paints &
Pharmaceuticals – Kaolin

Fishing – deep sea/aqua
culture

Cassava Processing –
industrial starch, chips & Flour

Poultry Feeds
Production
 Fruit & Vegetable
Processing – canning &
bottling
Transport (Maritime)
 Liner
Services
 Ship building
 Inland Container Depot
 Inland water transportation
Solid Minerals
 Endowed
with a range of economically
viable minerals – kaolin, limestone,
gypsum, silicon, etc
 Second world largest deposit of bitumen
range
Oil & Gas

Upstream
- Surveying
- Civil works
-
-
(slabbing/concreting jobs
at rig sites, preparation
of drilling locations)
Seismic data acquisition
& interpretation
Geological activities
Drilling operations
Exploration &
production

Downstream
- Refining
- Petrochemical industries
(industrial & food grade solvents,
insecticides, cosmetics, mineral oils,
petroleum jelly)
Bituminous-based
water/damp proof building
materials (tarpaulin,tiles etc)
- Export of refined products
surplus
-
Oil & Gas (cont’d)
 Gas
Development and Conversion
- Natural Gas Pipeline Network
- Butanization Project (filling facilities,
manufacturing of cylinders, installation of filling
plants & retail distribution)
- Vehicular Fuel (compressed Natural gas)

Support Services & Pollution control
Privatization and
Commercialization
 The
program is now in its third phase
involving enterprises in the monopoly
sectors such as:
Refineries, National Electric Power
Authority, Nigerian
Telecommunications (NITEL), Sea
ports, Vehicle assembly plants etc.
Generous Package of
investment Incentives





Tax Holiday - Pioneer Status – 5 years to qualified
activities
Enriched Capital Allowances - ranges from 50 – 90%
Corporate Tax – 30%
Withholding Tax on dividends, interest, and rent is
10%: for Royalties 15% and on management and
technical agreement 10%
Export Incentives
– Export Expansion Grant Fund
– Duty Drawback Scheme
– Export Processing Zone (EPZ)
NIPC & Investors

Services
– Facilitate the procurement of all business approvals


Business Registration
Expatriate Quota
– Facilitate the administration and approval of investment
incentives

Pioneer Status
– Negotiates specific incentives for the investor, in consultation
with appropriate government agencies such as FMF, FMI
– Provides up-to-date information on investment opportunities
available in the country


Brochures
Investors’ Guide
NIPC & Investors

Services (Cont’d)
– Advocate for better business environment in the
economy
– Identifies difficulties and problems encountered by
investors, proffers solutions and renders assistance
– Initiates, organises and facilitates ‘match-making’
meetings between investors
– Facilitate/organise outbound and inbound
investment missions
Conclusion
With the bias for private sector development, the
Commission is more than ever equipped to ‘facilitate’
rapid growth of investment in the country by both
foreign and local investors.
Nigeria offers one of the most rewarding investment
destination, not just in Africa but, in the World.
Thank you for your attention!