1. Private Limited Liability Company (LTD): This is the most common form of business set up by investors and it requires a minimum share capital of NGN 10, 000. A private limited liability company is a legal entity in its own right, separate from those who own it. The company requires a minimum of two (2) and a maximum of fifty (50) shareholders and directors. Such a company is restricted from transferring its shares freely and prohibited from inviting the public to subscribe to its shares, debentures and/or deposit money for fixed periods or payable at call, whether or not bearing interest.
2. Public Limited Liability Company (PLC): The minimum share capital for this type of company is NGN 500,000. A Public Limited Company required a memorandum of Understanding of two (2) shareholders. There is no restriction on the maximum number of shareholders or their right to transfer their shares freely. The public may be invited to subscribe to its capital and the shares may be traded on any securities Exchange.
3. Company Limited by Guarantee (GTE): Generally incorporated as a not-for-profit, this kind of company limits its members’ liability to the amount of their respective guarantees. 4. Unlimited Company: This type of company has no limit on the liability of its members.
Businesses can be registered online via the CAC Company Registration Portal. Through this site, investors – or their agents – can conduct name searches, complete the required forms, submit all relevant incorporation documents, and also pay associated fees. However, investors may also visit the CAC office or the One-Stop Investment Centre (OSIC) of the Nigerian Investment Promotion Commission (NIPC) to complete or submit paper applications.
The online registration process is laid out below:
See Link: Summary of CAC fees and forms
Foreign companies intending to do business in Nigeria may apply for exemption from the standard registration requirements if they are:
According to Section 54 of the Companies and Allied
Matters Act (CAMA) Act 1 of 1990, all foreign company are required to incorporates a local company in Nigeria before commencing business.
The Nigerian Investment Promotion Commission (NIPC) Act 16 of 1995 established the Nigerian Investment Promotion Commission to encourage, promote, and coordinate all investments in Nigeria. This act also regulates the participation of foreign businesses in the country.
The NIPC Act provides for foreign nationals to own up to 100%
equity and undertake any type of business in Nigeria except those related to
the production of arms, ammunition, narcotics and related substances and any items
indicated on the negative list as defined by section 31 of the Act.
Section 20 of the NIPC Act requires all enterprises in which foreign participation is permitted to apply to the Commission for business registration.
To process NIPC Business Registration, the following documents are required:
The One-Stop Investment Centre (OSIC) brings together relevant government agencies to one location to provide fast-tracked services to investors. The Centre is coordinated by the NIPC.
The objective of the Centre is to simplify business entry processes by removing
administrative and regulatory bottlenecks pertaining
to doing business in Nigeria.
The Centre presently has twenty-seven (27) participating agencies.
Specifically OSIC provides the following services:
|Corporate Affairs Commission (CAC)||Nigeria Customs Service (NCS)|
|Department of Petroleum Resources (DPR)||Nigerian Export Promotion Council (NEPC)|
|Federal Capital Territory Administration (FCTA)||Nigerian Electricity Regulatory Commission (NERC)|
|Federal Inland Revenue Service (FIRS)||Nigerian Export Processing Zones Authority|
|Federal Ministry of Budget and National Planning (FMB&NP)||Nigerian Investment Promotion Commission (NIPC)|
|Federal Ministry of Finance (FMF)||Nigeria Immigration Service (NIS)|
|Federal Ministry of Interior (FMI)||Nigerian Maritime Administration and Safety Agency (NIMASA)|
|Federal Ministry of Mines and Steel Development (MMSD)||New Nigeria Development Company (NNDC)|
|Infrastructure Concession Regulatory Commission (ICRC)||National Office for Technology Acquisition & Promotion (NOTAP)|
|Manufacturers Association of Nigeria (MAN)||Odu'a Investment Company Limited|
|Ministry of Foreign Affairs (MFA)||Oil & Gas Free Trade Zones Authority (OGTZ)|
|National Agency for Food and Drug Administration and Control (NAFDAC)||Pharmacists Council of Nigeria (PCN)|
|National Bureau of Statistics (NBS)||Standards Organisation of Nigeria (SON)|
|Nigerian Copyright Commission (NCC)|
The Environmental Impact Assessment (EIA) is used to evaluate the probable positive and negative environmental, health and social impacts of a proposed project. The process provides the Federal Ministry of Environment and National Environmental Standards Regulatory and Enforcement Agency (NESREA) with information to determine the appropriate permit status of a project.
The procedures for obtaining EIA Certificate are outlined below:
Africa’s most populous country has an estimated population of 193 million, with more than half of its people under 30 years of age. Adult literacy rate is 59.6%.
There are four levels of education in Nigeria:
After obtaining the Basic Education Certificate, students can opt for 3 years of vocational education to obtain either the National Technical Certificate (NTC) or the National Business Certificate (NBC), both of which prepare their graduates to enter the labour market. The National Business and Technical Examination Board (NABTEB) conducts the examinations and issues the certificates.
On the other hand, students may choose to
complete 3 years of senior secondary school, to obtain the Senior School
Certificate, issued by either the West African Examinations Council (WAEC) or
the National Examinations Council (NECO). This certificate is required
alongside a successful completion of the University Tertiary Matriculation
Examination (UTME) to access higher education.
Higher Education in Nigeria is provided by public and private sector-owned universities, polytechnics, monotechnics, colleges of education and professional institutions.
Nigeria has the largest university system in Sub-Saharan Africa; its 154 universities offer several graduate programs and produce most of its skilled professionals. A Joint Admissions and Matriculation Board administers a national university entrance examination and informs universities of applicant scores.
There are 113 polytechnics in Nigeria. These run 2-year programmes leading to the National Diploma and Higher National Diploma (HND). 1 year of practical experience is required before admission into the HND programme.
85 colleges of education offer Teacher Training Programmes, leading to the award of the Nigeria Certificate in Education (NCE), the minimum teaching qualification, obtainable after 3 years of study.
The National Youth Service Corp (NYSC) is a mandatory one-year of service by Nigerian graduates. The service year includes a three-week camp with paramilitary training followed by formal sector work for the rest of the year while engaging in community developments. The NYSC certificate is a requirement for obtaining subsequent employment in the country.
Several professional Institutions regulate different occupational fields, most of them administering certification examinations to members according to their charter. Passing these exams is considered a professional accomplishment which validates the competence of individuals in their respective fields.
The 1999 Constitution of the Federal Republic of Nigeria provides for “equal pay for equal work without discrimination on account of sex, or any other grounds whatsoever”. An employer is required to give to each employee; a written contract within 3 months of engagement stating the particulars of the employer and the employee, the position and job description/functions, terms and conditions of the contract, confidentiality clauses, intellectual property rights, hours of work, remuneration, holiday and holiday pay, etc.
A typical workday comprises 8 hours from Mondays to Fridays, except on public holidays; however some businesses work on Saturdays.
An employment may be terminated if the parties to the contract jointly agree to do so. Generally, however, for an employment to be unilaterally terminated, a notice of termination (based on the terms of the contract of employment and/or the circumstances surrounding the employment) must be given or salary paid in lieu of such notice.
An employer may dismiss an employee where there is a fundamental breach of the employment contract. Employers are encouraged to itemise examples of cases that could lead to dismissal and inform the employees through their employment contract. No compensation is usually payable upon a valid dismissal.
The Federal Ministry of Labour and Employment (FMLE) is responsible for industrial relations in general, including conciliation in labour disputes, technical training (through the Industrial Training Fund), manpower development, safety and welfare in the workplace, and supervision of trade union activities.
Every person who occupies or intends to occupy a factory is mandated to apply for registration to the Director of Factories who shall issue a certificate of registration if the proposed factory is suitable. Employers are compelled under the Factories Act to protect workers against industrial hazards and display an extract of the Act in their factory premises.
The National Minimum Wage is N18,000 per month.
An employer is mandated to keep proper records of the wages and conditions of
employment and to retain such records for three (3) years.
Employees are entitled to annual leave with full pay of at least twelve (12) working days (for persons under the age of 16 years, including apprentices) and 6 working days for older employees.
Other paid holidays and vacations include public holidays and maternity leave - which are normally fully paid. Maternity leave is typically three (3) months paid leave while paternity leave (though not common) is usually 2 to 5 days of paid leave. Nursing mothers are allowed half an hour twice a day to attend to their babies.
Sick Leave: An employee is entitled to a maximum of twelve (12) working days of paid sick leave in any calendar year, provided this sickness is certified by a registered medical practitioner.
|Benefits||Number of days||Wages|
|Annual||Minimum of 6 days (for employees above 16 years old) 12 days for persons below 16 years (including apprentices)||Full Pay|
|Sick Leave||Maximum of 12 days (certified by a registered medical practitioner||Full Pay|
|Maternity Leave||12 weeks (comprising 6 weeks immediately before and after childbirth)||Usually fully paid, but legally not less than 50% of wages, if the woman had been employed for at least 6 months.|
The Employee Compensation Act (ECA) provides for adequate compensation for employees or their dependants in the event of death, injury, disease or disability arising out of, or in the course of employment. The Act is also intended to provide for safer working conditions for employees, by ensuring that all relevant stakeholders contribute to the prevention of occupational hazards and disabilities. To this end, employers are required to contribute 1% of their payroll costs to the National Social Insurance Trust Fund (NSITF) to cover employees from work-related accidents and death.
|Relevant documents||Employee Compensation Act|
The NHF seeks to facilitate the provision of houses to Nigerians at affordable prices. Employers are required to deduct 2.5% of employee’s basic salary and remit same to the Federal Mortgage Bank of Nigeria within one month of such deduction.
|Relevant documents||National Housing Fund Act|
The National Health Insurance Scheme (NHIS) provides all employees access to affordable health care. Companies with a minimum of ten (10) staff are expected to provide health insurance for their staff and their dependants.
The ITF was established to promote the acquisition of skills in industry and commerce with a view to generating a pool of indigenous trained manpower sufficient to meet the needs of the economy. Employers are required to contribute 1% of annual payroll costs to the ITF, if they
However, the ITF Governing Council may refund
of up to 50% of an employer’s contributions if he submits evidence of providing
relevant training to his employees.
Contribution ||10% of
employee’s salary ||8% of
of basic salary|
Health Insurance Scheme ||10% of
employee’s basic salary||5% of
Training Fund||1% of
Compensation Scheme||1% of
|Relevant documents||Immigration Act 2015|
The Immigration Act, 2015 precludes any person other than a Nigerian citizen from accepting employment (not being employment by the Federal or State Government) without the consent in writing of the Minister of Interior. This consent is issued in the form of an Expatriate Quota (EQ) which permits companies to employ expatriates to specific job designations, and also specifies the duration of such employment.
An Expatriate Quota is granted for an initial period of three (3) years. It can however be renewed for further periods of two (2) years each subject to a maximum of ten (10) years. Limited quota positions are granted as Permanent until Reviewed (PUR) for senior executive positions such as the Chief Executive, Managing Director, or General Manager.The Citizenship and Business Department of the Federal Ministry of Interior (FMI) is responsible for handling Expatriate Quota applications. The process may also be facilitated by the FMI desk at the One Stop Investment Centre (OSIC).
The procedure and fees for obtaining the EQ (through NIPC) are outlined below:
|Online Registration fee||51,000|
|Each approved EQ slot||30,000|
|Renewal of each EQ slot||20,000|
All the above documents are required for processing. Failure to submit any of the documents may lead to delays.
Once an EQ approval is granted, the expatriate concerned must obtain a Subject to Regularization (STR) visa from the Nigerian Mission in his country of residence. The STR is issued to expatriates coming to work in Nigeria based on the EQ approval. The process for applying for the STR is listed below:
An STR application is processed within seven (7) days. Visa fees are not fixed, however the Immigration Facilities Handbook 2017 contains the schedule of visa fees per country.
Within ninety (90) days of arrival in Nigeria, the expatriate is expected to apply to the Nigerian Immigration Service (NIS) – through his employer – for a Combined Expatriate Resident Permit and Aliens Card (CERPAC). The employer must undertake to bear full immigration responsibility on behalf of the expatriate. The NIS assesses each application on its merit in line with the applicant’s qualifications, and takes a decision on the application. The CERPAC is valid for two years but can be renewed annually provided the Expatriate Quota is still valid and there are vacant positions.
The following permits are also available to foreigners coming into Nigeria for business or work:Business Visa
An expatriate is liable to tax in Nigeria if his employment costs are recharged to a Nigerian company; or he is in Nigeria for up to 183 days in a year (including leave and temporary absence); or where he is not liable to tax in another country which has a double tax agreement with Nigeria.
Investors are optimistic about the quality of labour in Nigeria. They describe Nigerians as highly productive, fast learners, who can match anyone anywhere in the world. They however observed that in some instances, especially highly technical fields, they have to invest extensively in training new staff before they can get the desired quality of work from such staff.
The Nigerian Electricity Regulatory Commission (NERC) regulates the business of electricity generation, transmission, distribution and marketing in Nigeria.
Electricity is supplied directly to customers by the distribution companies (popularly called DisCos) which cover specific geographical areas as shown in the table below. There is also provision for licensing Independent Electricity Distribution Networks (IEDN) in addition to the DisCos.
The Multi-Year Tariff Order (MYTO) is the methodology adopted by NERC for setting electricity tariffs in Nigeria. It provides a 15-year tariff path with annual minor reviews, and major reviews every 5 years.
Customers are classified into any of the following tariff classes:Residential (R)
|Distribution Company ||Coverage Area||Average Tariff (Kilowatt per hour)|
Nassarawa, Niger, Kogi||NGN 33|
Delta, Ondo, Ekiti ||NGN 33|
South & Agbara (Ogun) ||NGN 28|
Enugu, Abia, Imo, Ebonyi ||NGN 35|
Ogun, Osun, Kwara ||NGN 31|
North ||NGN 27|
Bauchi, Gombe, Benue ||NGN 34|
Kebbi, Sokoto, Zamfara ||NGN 33|
Jigawa, Katsina||NGN 30|
Harcourt ||Cross River, Akwa Ibom, Rivers, Bayelsa ||NGN 34|
Yobe, Borno, Taraba||NGN 27|
In order to improve power supply, NERC has developed a regulation on
embedded generation which allows for power generation plants (including
renewable energy) to be directly connected to and evacuated through a
distribution network. It provides a window for investors, communities, state
and local governments to generate and sell/utilize power without going through
the transmission grid. In addition, the commission developed a mini-grid
regulation which seeks to provide an improved power supply in un-served and
under-served locations in the country, especially the rural communities.
Rural Electrification Agency (REA)
REA is a Federal Government Agency saddled with the responsibility of
providing electricity to rural communities in Nigeria. Here, you will
find information on the Agency’s activities, event line up and rural
The Rural Electrification Goal of the Federal Government of Nigeria is
to increase access to electricity to 75% and 90% by 2020 and 2030
respectively and at least 10% of renewable energy mix by 2025, fully
utilizing the Rural Electrification Policy (2005) & National
Electric Power Policy (2001). Rural Electricity Users Cooperative
Societies (REUCS) are expected to own, operate, and maintain Rural
Electricity Systems mainly in Cooperation with DisCos and other
professional private sector companies providing the know-how required to
operate such systems. It is REA’s sustainability platform.
The procedure for obtaining electricity is as laid out below:
The customer does not pay meter or installation costs as these are already covered by the electricity tariff.
See Link: Disco Tariffs
Responsibility for water supply is shared between the Federal, State and Local Governments. The Federal Ministry of Water Resources provides policy advice, monitoring and coordination of water resources development, while the State Water Agencies (SWA) are responsible for actual urban, semi-urban and rural water supply.In Abuja, the source of urban water supply is not boreholes but surface water treatment system (River Usuma) then to our dam and treated for supply into our networks for customers. There are two types of water billing in Nigeria. Flat rate billing is allocated to the property type based on the estimated consumption per billing cycle. Meter rates on the other hand, help the government measure the actual consumption of water, and bill on that basis.
Water rates vary from state to state.
$0.41 per m3
$0.97 per m3
$0.22 per m3
$0.70 per m3
Generally, especially in urban areas, boreholes are a major source of water for commercial and residential properties. However, the policy of the Lagos State Water Corporation (LSWC) is to meter all properties even where water comes from boreholes installed by the property owner, starting with commercial/industrial ones and this is being done gradually.
There are four major GSM (Global System for Mobile communication) operators in Nigeria: Airtel, Globacom, MTN and 9mobile with a combined subscriber base of about 150 million. The launching of GSM in the country has significantly improved the country’s domestic and international telecommunication services. Fixed Wired and Wireless services are provided by Visafone, Multilinks, MTN, Glo, Ntel, ipNX and 21st Century.
Under the current unified licensing regime, which was introduced by the Nigerian Communications Commission in 2006, there is no more segmentation of wireless licences into mobile and fixed service categories. On allocation of a spectrum, all licensees are free to offer voice, data or multimedia services as they deem fit. This harmonised platform has led to increased competition from all the telecommunication service operators in the country.
Each telecoms provider has an array of voice and data plans for customers to choose from. The number of internet users in Nigeria is about 90 million (or 53% of the population), which is the highest in Africa. Data services are provided by the afore-mentioned GSM operators, as well as several Internet Service Providers (ISP). Many of these offer fibre-optic services across the country, with 4G LTE available in Lagos, Ibadan, Abuja and Port Harcourt. Data plans vary by ISP, city, duration and choice of plan but monthly subscriptions start around $5.60 (excluding the cost of the modem).
|On-net calls||USD||0.0003||2018||per second|
|Off-net calls||USD||0.0003||2018||per second|
|Local SMS||USD||0.0111||2018||per unit|
|International SMS||USD||0.0416||2018||per unit|
|Relevant institutions||Nigerian Copyright Commission (NCC)|
With 195,000 km of roads, Nigeria has the largest road network in West Africa, and second largest South of the Sahara. About 32,000 km of these are federal roads; 31,000 km are state roads, while the rest are local government roads.
The road transport system remains the most widely used transportation system in the county, accounting for 90 percent of commodity movements to and from the seaports, and other internal movements of goods and persons. The federal road network accounts for about 70 percent of the national vehicular and freight traffic.
Ministry of Works is currently working to improve various sections of the
Federal Highway network and has given top priority to the North-South,
East-West routes used for the distribution of goods and services across the
country and major bridges. Also prioritised are roads which link major routes,
factories, agricultural producing hubs, mining depots, major ports and mineral
The Trans-Africa Highway is a network of nine (9) highways being developed to connect all regions of Africa. It aims to give every African country access to markets and ports and alleviate poverty through the development of highway infrastructure and management of road-based trade corridors. When completed, the total length of the highways will be over 56, 000km.
Nigeria is strategically located along four routes of the highway:
Nigeria's railway system has 3,505 route kilometres and 4332 track kilometres, most of which is Cape gauge. The country has two major rail lines: a western line connecting Lagos to Nguru in Yobe state, and an eastern line connecting Port Harcourt to Maiduguri.
The Lagos–Kano Standard Gauge Railway is being built in segments to replace the Western Cape gauge line. The Abuja-Kaduna line (186km) has been completed and commissioned; the Ajaokuta to Warri Line (277km) is nearing completion, while work has commenced on the Lagos – Ibadan line (180km).
10 new standard gauge rail lines are currently being planned, and these will cover a travelling distance of 3,421 km when completed. The Abuja – Kaduna rail is Nigeria’s first high speed rail, travelling at 150km/h.
Several metro systems – such as the Abuja Light Rail, Lagos Rail Mass Transit and Rivers Mono Rail - are under construction, while the Calabar Mono rail was commissioned in 2017.
|Abuja to Kaduna||Naira||900||2017||First Class (Adult)|
|Abuja to Kaduna||Naira||450||2017||First Class (Children)|
|Abuja to Kaduna||Naira||600||2017||Second Class (Adult)|
|Abuja to Kaduna||Naira||300||2017||Second Class (Children)|
The Federal Airports Authority of Nigeria operates five (5) international airports, located in Abuja, Lagos, Kano, Port Harcourt and Enugu as well as eighteen (18) domestic ones. Passenger traffic at these airports in 2016 alone was 15 million.
Nigeria has bilateral air services agreement with eighty-eight (88) countries, with direct flights to North America, several European and African countries as well as connecting flights to the rest of the world.
The existing airport infrastructure is being expanded, and eleven (11) airports are currently being upgraded to international standards.
|Port Harcourt||Naira||25,200||2018||Economy Class|
|Port Harcourt||Naira||45,000||2018||Business Class|
Nigeria has 8,600 km of inland waterways. The longest are the Niger River and its tributary, the Benue River but the most used, especially by larger powered boats and for commerce, are in the Niger Delta and along the coast from Lagos Lagoon to Cross River. Major transportation routes link the six major sea ports - Apapa, Tincan, Warri, Port Harcourt, Onne and Calabar – and other river ports and jetties.
There are 10 crude oil terminals. Nigeria records about 2,000 petroleum vessels, 35,000 vessels (excluding tankers) and cargo (excluding crude) averaging 80 million tons annually.
Twenty eight (28) of the nation’s thirty-six (36) states can be accessed through water. Nigeria can also link five neighbouring countries – Benin Republic (Port Novo), Equatorial Guinea, Cameroon, Chad and Niger Republic by water.
Current initiatives in the maritime sector include capital and infrastructure improvement, channel dredging and maintenance and installation of safety facilities aimed at increasing the share of water transportation. Nigeria is currently expanding existing ports and building 5 deep sea ports in Lagos, Ogun, Delta, Bayelsa and Akwa Ibom states, one of which is expected to be the largest in Africa.
Thus, emerging opportunities in the Nigerian maritime sector include the following:
1. Manpower and Human Capacity Development:
The maritime industry is highly labour and capital-intensive, and as such requires adequate funding, government support and policy consistencies to solve the manpower challenges it currently faces in Nigeria. One of the areas of Focus of the Federal Ministry of Transportation is ensuring adequate human capital development in the sector with special intervention for seafarers development to close up the existing gap in the industry. Recently NIMASA sponsored a total of 289 cadets for sea time (on board training) in Europe and Egypt under the Nigeria Seafarers Development Programme NSDP. Recent government efforts to fund the establishment of maritime institutions across the country are welcome developments that are worthy of commendation. Interventions such as this will definitely boost manpower development in the industry. Equally, collaboration between the various agencies in the industry, in carrying out their responsibilities, will raise the operational performance and efficiency of the sector.
2. Maritime Infrastructural Development:
A number of factors are responsible for the development of seaports and the supportive logistics infrastructure in Nigeria. This emphasises that maritime infrastructural development is a function of reaction to economic dynamics and global changes, which currently requires the urgent need to restructure and reposition for efficiency and functionality. In Nigeria, maritime infrastructural development, especially seaports, is often determined by:
3. Globalisation and the Application of New Technology:
The application of innovative technology is possibly the strongest determinant of development in any maritime industry. From operational re-engineering to the architectural design of vessels, and dredging in an attempt to increase water draft levels within complex international trade development, there is indeed heavy reliance on technological interventions, as they affect virtually every aspect of maritime transportation. There is need for a constant response to the dynamics of technology and the globalisation tendency by the Nigerian government, all in an attempt to pursue sustainable maritime industry growth that could support international trade.
4. Maritime Research and Development:
There are numerous areas of research need associated with the maritime industry. NIMASA has established various maritime institutions designed to provide maritime education and research support to the industry. However, the absence of training vessels for practical application of theoretical knowledge remains a major setback, as this is imperative for professional qualification in the industry. The establishment of national fleets is suggested to provide onboard experience to prospective seafarers. Also, industry operators/stakeholders should be incentivised to conduct research that would benefit the industry, while more joint venture partnerships with foreign companies should be entered into, to facilitate the exchange of research ideas.
5. Maritime Security:
The International Maritime Bureau reports that in 2016, the Nigerian waters were largely unsafe due to the persistence of kidnapping incidents, as a direct result of the presence of pirates on these waters. While some progress has been made in boosting security in this area so far, there is still the need for greater focus in the efforts of security agencies in curtailing the occurrence of these incidents. There has been the renewed push for the naval police and Maritime Patrol Aircraft to be adequately equipped with modern arms and vehicles for the effective containment of criminal elements in our waters.
There is an equally the intensified drive for continuous investment in maritime security, as well as the creation of an enabling environment for the attraction of investors through maritime tourism and marine agriculture, towards sustainable development.
6. Marine Agriculture:
The increasing demand for food and water creates an opportunity for mariculture as a result of Nigeria‘s growing population, without an increasing pressure on terrestrial and marine habitats. Aquaculture, done well, offers a huge potential not just for producing food, but also providing livelihoods to coastal communities and in the effort to recover lost ecosystem services. The development of marine agriculture would be enhanced by improved security, the ratification and implementation of Port State Management Agreement (PSMA) and the formulation of a protectionist policy for investors-all presently being considered by the relevant authorities.
7. Marine Insurance:
In spite of the rapid growth of Nigeria‘s maritime sector, existing marine insurance products available in the country are considered to be primarily simple in structure and may not suit the needs of the fast-changing global market. In this respect, marine insurance companies could offer innovative products to provide comprehensive insurance solutions and innovative marine insurance products in order to serve Nigerian interests in overseas markets better. In this respect, any insurance company in Nigeria with the experience of insuring infrastructural projects, such as ports and related infrastructure development, should find a wealth of opportunities in offering tailor-made and advanced insurance products suitable for serving the needs of the shipping community.
8. Marine Tourism:
Tourism demand is increasing worldwide, and there are opportunities for investors and the government to exploit Nigeria‘s coastal and maritime resorts for revenue generation and job creation. These opportunities include the creation of a marine mall, cruise ships and the fostering of marine sports. With the enabling government policies, improved security, and enhanced safety operations driving the growth of marine tourism, this can be a huge area of opportunity going forward. .
9. Waste Management:
Control of the negative environmental impacts of a construction project in a marine environment, ensuring the pro-activity of the infrastructures and seizing the benefits associated with their presence at sea, in order to enhance specific ecological functions and marine biodiversity is also an area of opportunity in the maritime industry in Nigeria. These services include the design, construction, and supply of solutions for the restoration and enhancement of marine biodiversity, ecological integration of maritime infrastructures, support of fisheries and leisure activities, ecological restoration of damaged marine areas and coastal adaptation to climate change. These opportunities would be driven by improved policy development in terms of remediation for safety and management. Till date any discussion of the Nigerian ocean economy is narrowed down to the traditional domain of shipping, fishing and offshore oil and gas. Critical issues for the next three years in this regard, include:
ii. Mapping and Development of Marine Ecosystems
iii. Mapping and Development of Ocean Economy Intermediaries
The table below shows indicative freight rates of laden containers to and from major trading routes.
SIZE OF CONTAINER 10FT 15FT 20FT 40FT
|TRADE ROUTES ||IMPORT ||EXPORT ||IMPORT ||EXPORT ||IMPORT ||EXPORT ||IMPORT ||EXPORT |
|East/South Africa||$1,200 ||$409||$2,439 ||$817 ||$2,439 ||$817 ||$3,642 ||$1,581 |
|North/West Africa||$392||$413||$782||$817||$782||$817||$2,202||$ 1,595|
|South America/ Mexico||$1,203||$903||$2,405||$1,805||2,405||$1,805||$3,805||$ 2,380|
|North America/ Canada||$1,405||$988||$2,810||$1,975||2,810||$1,975||$4,135||$3,263|
|Far East/ China, Japan||$1,544||$282||$3,088||$1,657||3,088||$1,657||$4,736||$2,829|
|Far East/ India, Australia||$1,916||$3,835||$3,835||$1,760||3,835||$1,760||$6,086||$3,300|
The Cost of Living in Nigeria varies from city to city, with Lagos, Abuja and Port Harcourt being the most expensive. Prices in the table below would generally apply to these cities, and are accurate as at November 2017.
|Eggs||USD||1.68||2018||Pack of 12 eggs|
|Chicken Breasts||USD||3.54||2018||1 kg|
|Beef Round||USD||3.95||2018||1 kg|
|Bottled water||USD||0.45||2018||1.5 litres|
|Domestic beer||USD||0.84||2018||0.5 litre bottle|
|Imported beer||USD||1.77||2018||0.33 litre bottle|
|Coca Cola||USD||1.18||2018||2 litre bottle|
Investors expressed the desire for a more consistent and predictable government policy as regards to infrastructure development. They stressed the need for speedy improvement in the power generation and distribution to reduce operating costs and create competititve market.
The Land Use Act of 1978 vests ownership of all urban land within a state (except those vested in the Federal Government or its agent) in the State Governor who holds land in trust for the people and allocates same for residential, commercial, agricultural and other purposes. Similar powers with respect to rural (or non-urban) areas are vested in the Local Governments. This means the government becomes the lessor, responsible for granting leases.
There are two rights of occupancy: a statutory right of occupancy granted by the State Government and a customary right of occupancy granted by the Local Government. Leases are typically granted for 99 years, subject to review upon expiration. Title deeds/documents serve as documentary evidence of ownership and include:
Certificate of Occupancy (C of O)
This is a title document issued by the President, Governor or Local Government Chairperson which contain the terms of lease and grant rights of occupancy to the holder for the leasehold term stipulated therein.
Deed of assignment
This is a document of transfer of land from a seller to a buyer. It outlines the agreement between the person with the rights to a piece of land and the person to whom the rights are being transferred. It contains a detailed description of the land (including its ownership history), the agreed cost, and the date from which transfer takes effect.
This is a legal document authorising the transfer of land from one person to another. In the case of the Federal Capital Territory (FCT), it is called Minister’s consent.
A foreign investor cannot acquire land in Nigeria. He/she will need to partner with a Nigerian to establish a company before land can be allocated.
In states, land registration and administration procedures are undertaken by the Land Use and Allocation Committees (for urban land) and land allocation advisory committees (for non-urban land). In the FCT, the Department of Land Administration under the Federal Capital Territory Administration (FCTA) is responsible.
application and allocation procedures vary from State to State.
Below is the procedure for acquiring land in Abuja.
a. Photocopy of the receipt (from Step 3 above)
b. Two passport-sized photographs
b. Means of identification (national ID card, drivers’ license, passport)
d. Tax Clearance Certificate
Steps B – D above apply for land being acquired for residential purposes.
(For land being acquired for real estate development or commercial purposes),
e. Schematic design of the proposed building
f. Environmental Impact Assessment (EIA),
g. Evidence of Financial & Technical Capacity
h. Company registration certificates – CAC Form, Corporate Tax Clearance Certificates.
Due to the delays in acquiring government land, most people and institutions often purchase land from individual owners. However, the FCTA advises against this especially for foreign investors. NIPC can support investors with obtaining concessions and/or fast-tracking the acquisition of government land. Investors should however note that the FCTA does not sell land. The organisation only allocates and collects the processing fees, Certificate of Occupancy fees and annual ground rent.The Abuja Master Plan has designated different areas for Residential, Commercial, Religious, Recreational, Industrial, Educational, Health, Institutional and Agricultural purposes and the FCTA monitors all land allocation to ensure adherence to the plan.
Relevant Link: FCT LandAdministration Processes
|Type of property|| Description|| Indicative Cost |
|Land in Eko Atlantic City|| Purchase, per square meter || $1,700|
|Land in Victoria Island|| Purchase, per square meter|| $1,377|
|Land in Banana Island, Ikoyi|| Purchase, per square meter|| $1,326|
|Duplex in Ikoyi/Victoria Island|| Rent, per annum|| $47,244|
|Apartment in Ikoyi/Victoria Island|| Rent, per annum|| $25,197|
|4 -5 Bedroom house (Lagos Mainland) || Purchase|| $239,900|
|4 -5 Bedroom house (Lagos Island)|| Purchase|| $547,150|
A building plan approval is necessary before construction can commence. Each state has a ministry, department or agency responsible for issuing these permits.
In Abuja, building permits are processed by the FCTA’s Department of Development Control (DODC) which provides the following guidelines to aid the process:
- Evidence of rights over the land (Right of occupancy, Certificate of occupancy, Title Deed Plan and fulfillment of financial obligations).
- A site plan and detailed site analysis report certificate by a registered town planner.
- Environmental Impact Analysis (EIA) Report for commercial, industrial, public building, recreational, large scale residential development, change of use of plot or on existing buildings and any other land use as may be deemed necessary, prepared and authenticated by a registered town planner.
- All application in respect of Special Development such as Petrol Filling Station, Water Supply, drilling/Outlets, private health and educational facilities, child welfare related developments etc. shall be accompanied by letters/license of the relevant regulatory body
Free Trade Zones (FTZ) are designed to attract foreign direct investment, increase foreign exchange earnings, promote technology transfer and develop export-oriented industry in Nigeria.The Nigerian Export Processing Zone Authority (NEPZA) was established by the Nigeria Free Trade Zone Act 1992 to grant all approvals for operators within the FTZ to the exclusion of other government bodies and agencies.
There are 33 FTZs with 15 operational and 18 under construction. Some of the operational FTZs are: Calabar Free Zone, Kano Free Zone, Lekki Free Zone, Tinapa Free Zone and Tourism Resort, Onne Oil and Gas Export Free Zone, Olokola Free Zone.
Foreign investors can set up businesses directly in FTZs without incorporating a company in the customs territory. Registered companies may also register separately and operate in an FTZ. Such registered FTZ entity would have a suffix FZE at the end of its name.
An FTZ entity enjoys several incentives:
There is land availability in Nigeria for investors including in the economic zones. However investors are concerned about the administration and procedure. Governments across the tiers are encouraged to further streamline the process to facilitate reliable access.
All businesses which operate in and derive income from Nigeria are liable to pay tax. The Nigerian tax system operates a self-assessment regime which allows taxpayers to assess, pay and file tax returns as prescribed in the extant tax laws.
Taxation in Nigeria is based on the three tiers of government as follows:
Nigeria has a body of laws that provide for the levying of taxes and tax administration in the country.
The following are the existing tax legislation in Nigeria, as at 2016:
Reviews, amendments and modifications to tax legislations are continuous, evolving with global best practices and in keeping with the local socio-economic realities. The review and amendment of tax legislation is in keeping with the formal tax amendment process as provided for in the Nigerian constitution.
This is a tax chargeable on all resident and non-resident companies (other than those engaged in petroleum operations) incorporated in Nigeria. Also known as corporate tax, the CIT rate is 30% of the profit earned in the year preceding assessment.
Resident companies are liable to CIT on their worldwide income (profits accruing in, derived from, brought into, or received in Nigeria) while non-residents are subject to CIT on the income derived from their Nigerian operations. A non-resident company with a fixed base in Nigeria is taxable on the profits attributable to that fixed based. Any WHT deducted at source from its Nigeria-source income is available as offset against the CIT liability.
Stamp Duties are basically taxes paid to the Federal or State Government on documents ( also
known as instruments for the purpose of the Stamp Duties Act) such as Conveyances on Sale,
Bills of Exchange, Promissory notes, Agreements, Contracts or even documents such as
Letters and Certificates of Admission, Instruments of Apprenticeship, Insurance Policies etc.
The payment of Stamp Duties is backed by legislation, the law being the Stamp Duties Act
1939 (as amended by numerous Acts and various resolutions and contained in Vol 22 Cap
411 LFN 1990). It also provides a list of documents in its Schedule and the duty payable
on each of them.
The Personal Income Tax is charged on the income of individuals, employees, partnerships and incorporated trustees on the basis of residency and payable to the State Government. The Act requires an employer to deduct and remit its employee income tax under the Pay-As-You-Earn (PAYE) scheme. As such, the employer is required to register with the respective State Board of Internal Revenue (SBIR) to which each employee’s taxes are payable.
Personal income tax rate is applied on a graduated scale on taxable annual income. A Consolidated Relief Allowance shall be granted at a flat rate of N200,000 plus 20% of gross income subject to a minimum tax of 1% of gross income whichever is higher.
Petroleum Profit Tax is levied on the income of companies engaged in upstream petroleum operations in lieu of CIT. The rates vary as follows:
All resident companies are required to contribute 2% of their assessable profits to the Tertiary Education Fund. This tax is usually filed alongside the relevant tax return (PPT or CIT).For companies subject to Petroleum Profit Tax,Tertiary Education Tax is treated as an allowable deduction.
Non-resident companies and unincorporated entities are exempt from Tertiary Education Tax.
VAT is a consumption tax charged at 5% on the supply of taxable goods and services. All taxable persons are expected to obtain a VAT registration certificate, and display their Tax Identification (TIN) on all invoices. Oil and gas companies and government agencies are required to remit VAT on their purchases directly to the FIRS rather than pay it over to their vendors. A non-resident company carrying on business in Nigeria only needs to register for VAT using the address of its local counter-party and include the tax on its invoice. A Nigerian company is expected to remit the VAT directly to the FIRS rather than pay it over to a non-resident company.
This is a 10% tax imposed on capital gains arising from a sale, exchange or other disposal of properties known as chargeable assets. Payable by corporate entities (including pioneer companies) and individuals, this tax is jointly administered by the FIRS and State Internal Revenue Services.
This is an advance payment of income tax which is made on account of the ultimate income tax liability of the taxpayers (individuals and companies). Withholding tax accruing from payments to companies is remitted to FIRS while payments from individuals should be remitted to SBIRs. The under-listed WHT rates are applicable to all resident and non-resident companies and individuals.
The first step to paying taxes for businesses in Nigeria is the registration of such a business. A free Taxpayer Identification Number (TIN) is automatically generated after registering the business, and this enables the business to start paying taxes.
A Tax Clearance Certificate (TCC) is a document that certifies that a company or individual has settled the income taxes due for the three preceding years of assessment. A TCC is a prerequisite for official transactions conducted by a company in the public sector, such as when tendering for government contracts, when remitting foreign exchange through the banks, etc.
Company TCCs are issued by the FIRS; while individual TCCs are issued by the relevant State Board Internal Revenue (SBIR). FIRS and Lagos SBIR issues TCC online (See link below).
Companies need to apply to the relevant FIRS tax office to obtain a TCC.
Nigeria has various tax incentives designed to encourage investment in key sectors of the economy and reduce the cost of doing business. Tax based incentives are covered under different laws and in different forms e.g. reliefs, credits, exemptions, allowances, breaks/holidays, drawbacks, etc. Government also provides fiscal concessions through the annual fiscal policy.
In order to facilitate access to these incentives, the Nigerian Investment Promotion Commission (NIPC) in collaboration with the Federal Inland Revenue Services (FIRS) worked with relevant Government Agencies to compile the fiscal incentives and sector-wide fiscal concessions duly approved by the Federal Government and supported by legal instruments. The first edition is based on the 2016 Fiscal Policy and covers 5 sectors, which was published in October 2017.
Under Industrial Development (Income Tax) Relieve Act (IDITRA), companies engaged in industries/products approved as ‘pioneer industries/products’ shall be
(a) granted income tax relief for a period of three years, which can be extended for a period of one year and thereafter another one year, or for one period of two years (Section 10(2)(a)(b) IDITRA);
(b) exempted from paying tax on dividends paid by the pioneer company during the pioneer period to the extent that they are paid out of income exempted from tax (Section 17(3) IDITRA); and
(c) any loss incurred during the tax relief period also deemed to be incurred on the first day following the expiration of the tax relief period and can be carried forward to offset profits after the tax-exempt period.
In addition to this, dividends paid out of pioneer profits are not subject to withholding tax.The updated list of industries /products which qualify for pioneer status can be obtained from the NIPC website www.nipc.gov.ng
|Relevant documents||Application Guidelines for Pioneer Status Incentives Updated List of Pioneer Industries/Products|
|Relevant institutions||NIPC FMITI FIRS|
Investors are positive about the tax incentives being offered by the government. However, they believe the implementation of the tax policy can be improved to ensure that more people and businesses pay their taxes.
The Nigerian legal system is composed of the English Common Law, Nigerian customary law, and Islamic Law. Business transactions are governed by the Common Law, as modified by statutes to meet local demands and conditions.
This Act established the NIPC as an investment promotion agency of the Government. NIPC is responsible for registering foreign investments in Nigeria, as well as liaising between investors and government, institutional lenders and other organisations concerned with investments.
The NIPC Act has removed the ceiling on foreign investment in Nigerian companies and introduced several positive changes such as:
The Investment and Securities Act 2007 contains comprehensive provisions on matters relating to securities and investments in Nigeria. The Act regulates mergers, acquisitions and other forms of business combination, securities transactions, including electronic transfer of registered shares, capital market operations in all their ramifications, borrowing by States, Local Government, other Government agencies and business entities, etc.
ISA provides for the establishment of:
The NIPC Act of 1995 forbids nationalization or expropriation of a business or assets unless the acquisition is in the national interest or for a public purpose. In such cases, investors are entitled to fair compensation and legal redress.
Specifically, Section 25 of the Act provides that:1. Subject to subsections (2) and (3) of this section-
2. There shall be no acquisition of an enterprise to which this Act applies by the Federal Government, unless the acquisition is in the national interest or for a public purpose and under a law which makes provision for-
- No enterprise shall be nationalized or expropriated by any Government of the Federation;
- No person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person.
3. Any compensation payable under this section shall be paid without undue delay, and authorisation for its repatriation in convertible currency
- Payment of fair and adequate compensation; and
- A right of access to the courts for the determination of the investor's interest or right and the amount of compensation to which he is entitled.
shall where applicable, be issued.
Section 26 of the NIPC Act seeks to ensure the amicable settlement of disputes between investors and the government. However, where such is not successful, arbitration serves as the main alternative resolution mechanism.
The Arbitration and Conciliation Act of 1990 provides a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation. It also makes applicable the Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) to any award made in Nigeria arising out of international commercial arbitration. The Act allows parties to challenge arbitrators, provides that an arbitration tribunal shall ensure that the parties receive equal treatment, and ensures that each party has full opportunity to present its case.
Litigation is also a method of dispute resolution. Nigeria's civil courts handle disputes between foreign investors and the government as well as between foreign investors and Nigerian businesses. Nigerian law allows the enforcement of foreign judgments after proper hearings in Nigerian courts. However, where there is disagreement between the investor and the Federal Government as to the method of dispute settlement to be adopted, the International Centre for Settlement of Investment Dispute (ICSID) Rules shall apply.
Nigeria is a member of the United Nations
Commission on International Trade Law and a signatory to ICSID and the 1958
Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York
|Relevant documents||Arbitration and Conciliation Act 2004|
Nigeria has bilateral investment agreements with 31 countries; 15 of which are in force. The country also has Double Tax Treaties with 13 countries, and is a signatory to 21 Investment-related instruments.
Relevant Links Nigeria’s International Investment Treaties
The agreements make provisions for the elimination of double taxation with respect to taxes on income and capital gains. Section 41 CGTA provides that any arrangement set out in an order made under Section 38 PITA and Section 45 CITA so far as they provide (in whatever terms) for relief from tax chargeable in Nigeria on capital gains by virtue of this section, have effect in relation to CGT.
Partners: Belgium, Canada, China, Czech Republic, France, Italy (airline and shipping only), Pakistan, Phillipines, Romania, Slovak Republic, South Africa, The Netherlands, United Kingdom
An IPPA seeks reciprocal promotion and protection of investments by individuals and companies in the territories of participating States. An IPPA provides the baseline minimum protection for foreign investments.
Partners: China, Finland, France, Germany, Italy, Korea Republic, Netherlands, Romania, Singapore, South Africa, Spain, Sweden, Switzerland, United Kingdom.
ECOWAS Treaty is a multilateral agreement executed by 15 countries in West Africa to enhance and accelerate economic and social development in the region. Further to the Treaty, ECOWAS set up ETLS as an operational tool to promote and facilitate trade within the region.
This Scheme provides for:
(a) abolition of customs duties levied on imports and exports of goods produced and moving among member states; and
(b) abolition of non-tariff barriers among members states to facilitate free movement of goods and services across member states.
Partners: Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
The NIPC Act guarantees foreign investors the unrestricted transferability of proceeds from their investment in Nigeria and capital repatriation in the event of liquidation. Investments in form of share capital contribution or loans may be made in foreign currency but information on such transactions must be submitted to the CBN by the dealer (i.e. a Nigerian bank) within 24 hours in order to obtain a Certificate of Capital Importation (CCI).
Once the foreign investor has the CCI, the following can be repatriated without hindrance:
There is currently no ceiling on profits distributable as dividends, provided such distributions are from profits and not capital, and there are no reasonable grounds for believing that the company is or would be insolvent after the payment.
The Nigerian Legal system strives to protect intellectual property through the Trade Marks Act, the Patents and Designs Act, and the Copyright Act.
Trademarks distinguish the goods or services of one enterprise from those of another. They are registrable at the Trade Marks Registry, Abuja. Registration of a trademark confers on the person registering it, a right to the exclusive use of that trademark for a period of seven (7) years, which may be renewed. The common remedies for trademark infringement include an injunction, award of damages, delivery up or destruction of the infringing goods.
Patents and designs relate to inventions. An invention can be patented if it is new, is capable of industrial application, or constitutes an improvement upon a patented invention. This must also be registered to be protected. A patent expires after twenty (20) years from the date of registration, while a design is effective in the first instance for five (5) years but renewable for two (2) consecutive periods of five (5) years each.
Copyright automatically applies to original creative works (such as literary, musical and artistic works, cinematograph films, sound recordings, and broadcasts) as soon as they are created. Copyright is valid for fifty (50) years in the case of broadcasts, sound recordings and cinematography, and seventy (70) years for literary, musical and artistic works. The Nigerian system enables people with skill and enterprise to produce and market goods and services in the fairest possible conditions, thereby facilitating trade.
The Nigerian Copyright Commission is responsible for the administration of all copyright matters. The remedies for the breach or an infringement of copyright are damages, injunction, accounting for profits, delivery or destruction as well as the conversion of rights.
Relevant Institutions: Nigerian Copyright Commission
NOTAP regulates the transfer of foreign technology and technical expertise to Nigerian companies. Any agreements involving the transfer of foreign technology to a Nigerian company must be registered with NOTAP as a pre-condition for obtaining foreign currency. Non-registration will frustrate transfer of any payments to be made outside Nigeria under the respective Agreement. Fees payable under the agreement (such as royalties, management fees, software licenses, etc.) must not exceed limits prescribed by the NOTAP and the CBN. The agreement must clearly specify the services to be provided or the features of the process or product being licensed.
Relevant Links NOTAP Act
The Paris Convention for the Protection of Industrial Property (1883) establishes industrial property protection rules regarding patents, marks, industrial designs, trade names, geographical indications and the repression of unfair competition. Its provisions include regulations regarding the national treatment, the right of priority and a number of common rules.
|Relevant documents||WIPO Paris Convention|
|Relevant documents||WIPO Berne Convention|
The Nigerian House of Assembly recently passed the Federal Competition and Consumer Protection Bill 2017. The bill seeks to establish a Federal Competition and Consumer Protection Commission and Tribunal to promote fair, efficient and competitive markets in Nigeria. It will also facilitate access to safe products by all citizens and protect the rights of all consumers in Nigeria.
Now awaiting the assent of the President, the bill which will affect all sectors of Nigeria’s economy, will also establish a National Administrative Framework for consumer protection, remove regulatory overlaps, create regulatory harmony between the Commission and other agencies involved in consumer protection and create a strict liability offense for common unfair trade practices.
The Federal Government established the Presidential Enabling Business Environment Council (PEBEC) in July 2016 to work progressively towards removing bureaucratic constraints to doing business in Nigeria and make the country a easier place to start and grow a business.
The Council is an inter-governmental and inter-ministerial chaired by His Excellency, Vice President Yemi Osinbajo, SAN, and comprises ten ministers, the Head of the Civil Service of the Federation, the Governor of the Central Bank of Nigeria, representatives of the National Assembly, the Judiciary, and organized private sector.
The Council, in collaboration with the National Assembly, the Judiciary, the Ministries, Departments and Agencies (MDAs), and the private sector have implemented over 100 reform initiatives through accelerated national action plans focused on ten (10) indicators, these reforms are aimed at reducing the challenges faced by SMEs while doing business.
These reforms implemented across various sectors of the economy and Ministries, Departments, and Agencies (MDAs) of government have seen Nigeria move up 24 places in the World Bank’s Ease of Doing Business Index 2018, from the 169th position on the 2017 ranking and 170th position on the 2016 ranking to 145 in the World Bank’s 2018 report.
In July 2017, the Council kicked off the sub-national Ease of Doing Business project with all States and the Federal Capital Territory (FCT), with the primary aim of cascading the ease of doing business initiatives down to the sub-national level by engaging and collaborating with state governments to implement reform initiatives that would increasingly make their states more attractive to business.
The Enabling Business Environment Secretariat (EBES) assists the MDAs to implement the reform agenda of the Council.
Please visit www.pebec.gov.ng for more information.
Investors are happy about the government’s commitment to reducing the cost of doing business as they believe this is already creating a more enabling environment for existing businesses to thrive, and new ones to emerge, thereby improving competition in the economy.
Some expressed concerns about the regulatory environment. They believe there are too many regulators, resulting in overlaps of their functions. There is nee for government to harmonise agendas of these agencies in order to strengthen their oversight functions.
The Nigerian economy is the biggest economy in Sub-Saharan with a Gross Domestic Product (GDP) of US$405 billion in 2016; a year the economy contracted by 1.51%. The economy has since moved out of recession; and has expanded in the last three consecutive quarters of 2017; the third quarter growth rate of 1.4% was above the World Bank’s 1.2% projected growth rate for 2017. The economy ended the year with a growth rate of 0.86%.
Fiscal incentives in form of duty waivers, tax exemptions, tax holidays, rebate, accelerated capital allowances and many more are provided for companies that undertake manufacturing, agriculture, technology, innovation and export-related activities. The Naira (N) is used for day to day transactions with exchange transactions regulated by the Foreign Exchange Act 1995. Cross border transactions are allowed but with some level of restriction to protect the local currency, prevent funding of terrorism and curb money laundering.
Nigeria is a member of the World Trade Organisation, and has recently ratified the Trade Facilitation Agreement (TFA) – a move welcomed by trade experts given Nigeria’s position as Africa’s largest economy. The TFA sets forth a series of measures for expeditiously moving goods across borders inspired by the best practices from around the world.
Nigeria is a member of the following organisations and associations:
African Union: Nigeria is a founding member of the African Union (AU), formerly Organisation of African Unity (OAU), which was established in May 1963. The creation of the AU brings the dream of a common African currency, foreign policy, defence structure and economic programme closer to reality.African Union Website
New Partnership for Africa’s Department (NEPAD): Nigeria is an active member of NEPAD (established by the AU) whose main objective is to give impetus to Africa’s development, by bridging existing gaps between Africa and the developed world.
ECOWAS: Nigeria is a founding member of the Economic Community of West African States, an economic union of 15 West African States established in May 1975 to facilitate trade in the region and to promote regional joint development efforts. In January 1990, ECOWAS commenced a Trade Liberalisation Scheme (TLS) aimed at the total elimination of customs duties and taxes of equivalent effect, removal of non-tariff barriers and the establishment of a Common External Tariff (CET) to protect goods produced in Member States.
Commonwealth of Nations: Nigeria is a member of The Commonwealth, an intergovernmental association of 52 sovereign states that once made up the British Empire.
Organisation of Petroleum Exporting Countries: OPEC is a permanent, inter-governmental organisation of fourteen oil-producing nations including Nigeria, which joined in 1971. OPEC seeks to co-ordinate and unify the petroleum policies of Member Countries, ensure the stabilisation of oil prices in order to secure efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to investors in the petroleum industry. A very active member of OPEC, Nigeria is the 13th largest producer of petroleum in the world, the 5th largest exporter and has the 10th largest proven reserves.
Nigeria is also a member of the United Nations (UN) and plays an active role in its peace-keeping activities globally.
Nigeria has some of the richest natural resources for agricultural production in the world: over 80 million hectares of arable land, of which only 40% is cultivated; 230 billion cubic meters of water; abundant and reliable rainfall in over two-thirds of its territory. Nigeria is the world’s largest producer of cassava, yams and cowpeas (beans); fourth largest producer of groundnut and cocoa; and Africa’s largest producer of tomatoes, besides several other crops.
Agriculture is the country’s largest sector, contributing 22 percent of GDP. It is also the largest employer, providing livelihood for about 90 percent of the rural population. Despite the recent recession in the country, the agriculture sector sustained a positive momentum, eventually helping to lift the country out of recession. With its detachment from the negative effects of lower oil prices and illiquidity, agriculture is the most important and resilient sector in the Nigerian economy, attractive for the following reasons:
As part of the economic recovery plan, the Government prioritized the diversification of the country’s revenue base, and identified mining as one of the pivotal sectors. The MMSD issued a revised sector growth and development roadmap to address the key challenges and outline strategies for rapid development and utilization of key minerals and metals. One of the targets is to grow the sectors’ total contribution to Nigeria’s GDP to about 10% by 2026. The Government has launched a $83, 334, 000 (N30 billion) intervention fund to open up the sector to multinational companies. The fund will be used to promote exploration and research. Government is also open to negotiation with respect to the concession of the country’s railway infrastructure to boost evacuation.
The National Information and Communication Technology Policy was developed by the Ministry of Communication Technology, in 2012 to help facilitate the transformation of Nigeria into a knowledge-based economy. The need to growth the BPO segment in Nigeria features within this policy document: “It is important… especially as Government continues to stimulate the creation of jobs – to urgently promote a conducive environment that will enable … firms to invest in and participate in the global BPO economy.”
Key factors making the sector attractive include:
The Nigerian Power sector has undergone several reforms over the last decade yet it remains in need of significant investment as its utility-scale electricity generation capacity continues to fall short of meeting domestic demands. The goal is to increase power generation from fossil sources to 20,000MW by 2020 through private sector participation.
Electricity in Nigeria is generated either through gas or hydro (water) with gas contributing 75 percent of the country’s energy mix. While Nigeria is estimated to have over 160 trillion cubic feet in natural gas reserves, seventh largest in the world, the country produces less than 1 percent of its reserves – thus underscoring power generation’s dependency on the oil and gas sector given that gas supply and pricing remain key issues for industry operators… particularly generation companies.
To promote investor confidence, the World Bank, International Finance Corporation (IFC) and MIGA (Multilateral Investment Guarantee Agency) provided credit support to the industry in the form of partial risk guarantees (PRGs) and partial credit guarantees (PCGs). This included a PRG of $245 million to support the establishment of the Azura gas-fired power plant by Azura Power West Africa in Edo State synchronized with loans and hedging instruments up to $135 million with guarantees up to $659 million.
The Renewable Energy Programme
The Renewable Energy Programme is initiated by the Federal Ministry of Environment in fulfillment of the Federal Republic of Nigeria’s obligation to the United Nations Framework on Climate Change (UNFCC) and as part of African strategy on voluntary emission reduction. The programme is developed as mitigation tool by Nigeria in response to the UNFCCC Accord, which includes:
|Relevant documents||NATIONAL RENEWABLE ENERGY AND ENERGY EFFICIENCY POLICY (NREEEP)|
|Relevant institutions||FMPWH NERC NIPC|
Manufacturing grew by 10.32 percent in the third quarter of 2017, contributing 8.81 percent to Nigeria’s GDP. The largest manufacturing sub-sectors are agro-processing, comprising food, beverages and tobacco (45 per cent of total in 2015), light manufacturing, including textile and wood products (31 per cent), and resource processing, e.g., cement and basic metals (18 per cent). These sectors all enjoyed sustained growth in 2010-2015.
The government seeks to improve the performance and size of this sector by developing Special Economic Zones (SEZs) to provide dedicated infrastructure to support hub productivity and re-energize local industries.
Through the Nigerian Industrial Revolution Plan (NIRP) which is designed to accelerate the build-up of industrial capacity, the government plans to improve access to credit and financial services, infrastructure and power supply thus reducing the input costs of manufacturers and increasing their overall competitiveness and profitability.
Nigeria manufacturing sector operates at minimum investment risk guaranteeing
considerable return on investment. The industry is exposed to a huge local
resource of trainable and affordable workforce, vibrant small and medium enterprises
in various value chains, and most importantly, a large internal market with
considerable purchasing power. Other reasons why you should invest in Nigeria manufacturing
Investment opportunities abound in the following activities in the activities:
New industries are emerging everyday and the economy is acquiring necessary skills and capacity in these new areas.
With a crude oil production capacity of 2.5 million barrels per day, Nigeria ranks as Africa's largest producer of oil and the sixth largest oil producing country in the world.
The country equally has the largest natural gas reserves in Africa, and ranks seventh in the world. It is eager to capitalize on this important resource after many years of flaring from oil fields. The country has attained an annual average production of about 2,000 Billion Standard Cubic Feet (BSCF) of Natural Gas; of which about 70% is utilized while 30% is still being flared annually.
Nigeria continues to attract major international oil companies (IOC), most of which are presently represented in Nigeria: Total, Chevron, ExxonMobil, Elf, Shell, ConocoPhillips and Eni.
Nigeria has proven to be among the most investment–friendly nations for IOCs, not only because of the geological configuration of its terrain but the relative security of investments in the economy. Also government is putting in place a regulatory framework that would promote competition and ensure transparency in the industry. Other reasons to invest include:
Investment opportunities in the Nigeria oil and gas industry had continued to grow steadily, and these opportunities are ranging from the upstream to downstream activities. These activities are:
The enactment of the Nigeria Local Content Act as enhanced synergies between the host community and the IOCs, thereby resulting in significant new opportunities in the development of marginal fields, engineering and support services for oil and gas operations.
The Nigeria's transportation network is one of the best in Africa; featuring an extensive system of paved highways, railroads, airports, waterways and seaports. The sector contributes about 3% to the gross domestic product (GDP) annually.
Towards facilitating private sector participation in infrastructure development and management in the economy, government established the Infrastructure Concession and Regulatory Commission (ICRC) to manage the selection, development, procurement, implementation and monitoring of Private Public Partnership (PPP) projects.
Nigeria’s road network is unarguable the largest in West Africa and the second largest south of the Sahara; the national road network is currently estimated to be 194,200km of which 34,120km (17.6%) are federal roads, 30,500km (15.7%) state roads and 129,580km (66.7%) local and rural roads. However a huge proportion of this network is buckling under the strain of carrying up to 80% of passenger and freight traffic.
Investment opportunities include:
The Nigerian railway
network covers an approximate distance of 3,500km of narrow gauge lines connecting the
south-western part of the country (Lagos) with the Northwest (Kano) and
Northeast (Maiduguri). The network has been extended by a narrow gauge line
between Onne and the Enugu-Port Harcourt line and a standard gauge line from
Ajaokuta to Warri.
The Nigerian Railway Corporation (NRC) owns and operates country’s rail and rolling stock. There is on-going reform to allow private sector participation in virtually all activities in the industry.
Investment Opportunities in the activity include
Nigeria’s sea ports handle 68% of West Africa’s maritime trade. The main seaports in Nigeria are at Calabar, Port Harcourt, Lagos, Sapele, Onne, and Warri. The Nigerian Port Authority (NPA) regulates activities in the Ports. A number of activities have been slated for privatisation or while some are already under concession.
The country has an inland navigable waterway of about 3000km which transverse 20 of the 36 states presenting huge investment potential. The coastline is about 852 km. The Nigerian Inland Waterways Authority (NIWA) serves as the regulator of the activity. The Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003 facilitate private participation in coastal and inland waterway transport services, and the construction and management of infrastructure to support the industry.
Airports and air navigational facilities constitute major infrastructure of the country’s transport sector; the country has a total of 19 airports and 62 airstrips distributed all over the country. Lagos, Abuja, Kano and Port Harcourt Airports are the four international airports and combined, they account for up to 90% of all passenger movements and aircraft movements.
The operation and management of most of the airport facilities are presently done through the Federal Airports Authority of Nigeria (FAAN). The National Airspace Management Agency (NAMA) is responsible for regulation, licensing, traffic control and navigational aids for aircrafts.
The active participation of the private sector in the industry as licensed operators, concessionaire or in PPP arrangement for the delivery and management of infrastructure and services continues to have huge impact in the transformation of the industry. A new National Aviation Policy has been approved to address safety issues in the industry.
Nigeria has developed an integrated master plan to transform the country’s aviation industry into air service hub of the West African region and creating agricultural products cargo terminals
Investment Opportunities: With the growing traffic numbers, significant investment is needed in:
NIIMP identifies investment required to bring infrastructure in Nigeria to desirable state. NIIMP’s key objective is to ensure coordinated approach to infrastructure development in Nigeria and help to integrate diverse infrastructure plans and projects across all sectors and regions in Nigeria.
In order to bridge the current infrastructure gap and reach desired optimal investment, NIIMP states that Nigeria must increase core infrastructure stock from 35-40% of GDP in 2012 to 70% by 2043. The NIIMP document indicates that about $127 billion is required over the next 5 years translating to an average of $25 billion per annum from 2014-2018 (“the 1st Operational Plan Period”).
Budgetary resources alone, currently standing at $9 -10 billion for capital expenditure per year, will be inadequate to meet Nigeria’s infrastructure requirements. At the Federal and States level, financing of infrastructure will also require private sector participation. During the 1st Operational Plan Period, Private sector investment requirement is projected to increase from 46% to 48% and Public Sector investment projected at 52% out of which only about 15% of public sector funding is projected to be from the government treasury leaving the balance of 85% to be sourced through the debt capital markets as well as the traditional lending market.National Integrated Infrastructure Masterplan
Investors are eager to see the government’s Economic Recovery and Growth Plan in action. They recognise the position of Nigeria as Africa’s largest market, and say that despite the challenges in the environment, Nigeria is still worth investing in, particularly because of its population, geographical location, and proximity to international markets. However, they stressed the need for significant infrastructural improvement, which they consider as critical to the success of sectors prioritized for investment.
The economy is endowed with great economic potentials and is expected to be one of the world’s top economies by 2050. A member of the MINT countries, and one of the next four largest emerging and developing economies after the BRIC countries. All these are clear attestation to the potentials inherent in the economy.
The economy possesses one of the largest internal markets in the world. With a growing population of over 193 million, the economy presents huge opportunity for market seeking investments. According to Global Retail Development Index, Nigeria’s retail sector made a national sale of over US$125 billion in 2016. This was made possible by a middle-class population that has grown by over 600% in the last few years, and now represents over 38% of the population of the country.
The Economic Recovery and Growth Plan (ERGP);
the national medium term economic plan for 2017 – 2020 has a vision
for sustained inclusive growth that is anchored on:
i. a stable macroeconomic environment
ii. agriculture and food security
iii. energy sufficiency (power and petroleum products)
iv. improved transportation infrastructure
v. industrialization focusing on small and medium scale enterprises
Overall, the Plan projects to grow the economy at an annual average of 4.62%. This is to be achieved by focusing on growth sectors - sectors that have consistently contributed significantly to the GDP and attracted investors interests, both domestic and foreign.
The commitment to improve the enabling
environment has seen an improved ranking of the economy by the World Bank in
the 2018 Doing Business Report. The economy achieved a 24 places upward
movement to being ranked 145 out of 190 countries in the process recording
positive change in seven out of the ten indicators. Efforts are on to ensure
this trend is sustained to ensure the country makes top 100 ease of doing
business ranking by 2020.
be assured that Nigeria is not just open for business, Nigeria is ready for
Nigeria has been rated one of the top 10 improved economies by the World Bank for advancing 24 places in the Doing Business Index 2018. Through its Presidential Enabling Business Environment Committee (PEBEC), the country is actively improving its business environment to attract investors.So far, Nigeria has streamlined the business incorporation, tax payment and Visa-on-Arrival processes, improved access to credit, fast-tracked export procedures and eliminated manual baggage searches at its airports. The most populous nation in Africa is open for business, offering the following to investors:
|Young and Skilled Workforce||Young and skilled workforce with 43% of the population under 15 years, improved labour productivity and over 1.8million new graduates every year|
|High urbanization rate & growing middle class||High urbanization rate with 48% of the population in urban areas and 168mn people forecasted to live in big cities by 2030. Rising consumer spend projected to increase by $94bn in 2025|
|Vibrant financial systems||Robust financial markets with 7 of the top 25 banks in Africa and the second largest Stock Exchange on the continent|
|Improving business conditions||Implementation of a strategic plan to tackle short term macro-economic challenges. Active anti-corruption campaign and decline in casualties from security incidents.|
|Abundant land & natural resources||84million hectares of arable land, 9th largest gas reserves and 44 exploitable minerals in proven commercial quantities|
|Largest market in Africa||Largest market in Africa with proximity to other west African markets. Land borders with Benin, Cameroon, Chad & Niger & 5 international airports|
|2nd biggest cluster of large companies||56 companies with revenues over $500mn and 2nd largest cluster of large companies in Africa|
|56 companies with revenues over $500mn and 2nd largest cluster of large companies in Africa||Investor friendly climate with strong appetite to encourage private sector investments. Generous statutory incentives with 14 Free Trade Zones|
|Official name||Federal Republic of Nigeria|
|Country area||923,768 square kilometres|
|Population||193 million||2016 estimate|
|Administrative structure||36 States and 1 Federal Capital Territory|
|Other national language(s)||Hausa, Igbo, Yoruba|
|GDP (USD)||457.13 billion||2016|
|GDP per capita (USD)||2,457.80||2016|
|Exchange rate (USD)||305.74||March 2018|