Transcript www.nipc.gov.ng

PRESENTATION
BY
ENGR. MUSTAFA BELLO, FNSE
EXECUTIVE SECRETARY/CEO
NIGERIAN INVESTMENT PROMOTION COMMISSION
AT THE
DURING THE VISIT OF
TAIWANESE DELEGATION TO NIGERIA
MARCH 24, 2005
Nigerian Investment Promotion Commission Plot 1181, Aguiyi
Ironsi Street, Maitama District, Abuja. 09-4134317
www.nipc-nigeria.org .
‘VENTURE CAPITAL
SCHEME PROSPECTS
IN NIGERIA’
TABLE OF CONTENTS
1.
2.
3.
4.
5.
6.
5.
6.
7.
Country Profile
Nigeria – Now ; a preferred Destination
Strategic issues in improving the Investment Environment
Positive strides in improving the economy
Improved Infrastructure
Venture Capital Scheme
Generous Package of Investment Incentives
The NIPC’s Facilitative Role in servicing of the Scheme
Conclusion
NIGERIA – Country Profile
Population: Over 120 million
Major Ethnic Groups: Hausa, Igbo & Yoruba
Other Ethnic Groups: About 340
Religion: Christianity, Islam
Time: GMT + 1
Official Language: English
Currency: Naira (N): = 100 kobo
Exchange Rate: US$ = N134
Weights and measurements: Metric
Nigeria – Now, A preferred
Destination
Prime investment location in Africa with:
- an internal market of over 120 million people that
extends to other African markets especially the West Coast
-Sub-regional and regional integration, providing a
combined market of over 200 million people
- Strategic location along the West Africa sea routes with
well-developed harbours and airports
A good tourism destination – with a multi-cultural
life style
A relatively well-educated and easily trainable
labour pool
Strategic Issues in Improving the
Investment Environment
Infrastructure Rehabilitation/Development
Streamlining of Regulatory Agencies
-NIPC/Nigeria Immigration Service Cooperation
 Public Sector Reforms:
-Nigerian Ports Reforms, Aviation, NEEDS, etc
 Deregulation and Privatization Programme
Strengthening the institutional capacity of public
administration to pursue openness, transparency and
democratic ideals
Positive Strides in Improving the
Economy
Empowerment of the private sector:
- Abrogation of all laws inhibiting private sector
participation in some activities
Growing Public-Private Partnership (PPP)
SMEs development initiatives:
-Small & Medium Enterprise Dev. Agency of Nigeria
(SMEDAN)
Empowerment of Approving Agencies:
-Nigeria Bank of Industry (BOI)
- Nigeria Agricultural & Rural Development Bank
(SMIEIS) Scheme
-10% of PBT of Commercial banks for SME Equity Investment Scheme
(SMIEIS)
 Generous incentives, which can even be negotiated.
Improved Infrastructure
Telecommunication:
- from a teledensity of 0.4 per 100 in 1999 to over
3.92/100-June, 2004.
Road Transportation:
-from 108,000km of road network in the 90s, out of which
30,000 are paved while the rest are unpaved; now
60,000km of paved roads out of a total of 194,000km as at
Feb. 2003.
Electricity:
generation has improved from 2000mw in 1999 to over
4000mw currently.
PROPOSED VENTURE CAPITAL
SCHEME
 Nigeria in collaboration with the Taiwan will be setting
up a Venture Capital Scheme (VCS); which will promote,
finance and develop industries in small scale sectors.
 It intends to route its various forms of assistance
through the state-level institutions viz the banking
system in Nigeria
 As part of its on-going exercise to fill the gaps in the
existing schemes of assistance, the VCS will operate a
Venture Capital Scheme for which purpose it will
constitute a Venture Capital Fund.
OBJECTIVE
The objective of the scheme is to provide a
window within VCS by constituting a venture
capital fund of US$200 million
US$100 million will be contributed by both
countries each
For funding entrepreneurs who have conceived
ventures having special characteristics to be
innovative but at the same time may not qualify
for assistance through the conventional route
of term financing.
OBJECTIVE
Cont’
The scheme will give exclusive focus on
small scale projects qualifying for
assistance from VCS. Projects involving
new and untried/untested processes and
technologies which have scope for
commercial application with characteristics
of high risk and high return are one
example of the type of projects which VCS
will look for extension of support out of its
Venture Capital Fund.
NATURE OF ASSISTANCE
 The nature of assistance would primarily be in the
form of equity or equity type instruments, though,
in exceptional cases, assistance by way of loans
may also be considered
 In case of equity/ equity type instruments, it is
expected that the venture company would go in
for an IPO within a reasonable period of time to
offer an exit route for the equity investment or
be willing to go in for buy back of shares
Extent of Assistance
Extent of assistance shall be decided
on a case-to-case basis on detailed
assessment of the requirements. No
minimum/ maximum limits have been
fixed in respect of the quantum of
assistance.
CURRENT STATUS
The Nigerian Investment Promotion Commission,
Federal Ministry of Finance and The Central Bank
of Nigeria are presently talking on the modalities
on how to raise the funds.
They looking at two possibilities which are both
private sectors oriented:
CURRENT STATUS CONT’s
Small and Medium Enterprises Investment
Equity Scheme (SMEIEIS)
Selected Multinationals to invest in the
scheme.
Etc.
The NIPC’S Facilitative Role in
Servicing the scheme
 The Investment Promotion Agency of Government
 Established by Nigerian Investment Promotion
Commission Act 16 (Decree) 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

An enterprise, in which foreign participation is permitted, shall after its
incorporation with CAC, be registered by NIPC
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)
–
Advocates 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
NIPC is positioned to ‘facilitate’ rapid growth
of investments in Nigeria 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!