Transcript THE REGULATORY ENVIRONMENT AND FOREIGN PRIVATE INVESTMENT

THE ROLE AND ACHIEVEMENTS OF
NIGERIAN INVESTMENT
PROMOTION COMMISSION
BY
ENGR. MUSTAFA BELLO, FNSE
EXECUTIVE SECRETARY/CEO
NIGERIAN INVESTMENT PROMOTION
COMMISSION
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INTRODUCTION
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Overview of investment Promotion Agencies.
Benefits of FDI.
History of NIPC.
Objectives of the Commission.
Functions of NIPC.
What we are.
Provisions relating to investments.
Investment Protection Agency.
Achievements.
Challenges.
Conclusion.
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Overview of Investment
Promotion Agencies
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FDI has been known to facilitate technology
transfer, contribute to expanding and modernizing
the production base, improve managerial capacity
and improve efficiency, productivity and value
addition in the relevant sectors.
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Nigerian Investment Promotion Commission is a
member of the World Association of Investment
Promotion Agencies (WAIPA). It is an umbrella
body for all the investment agencies world over with
over 100 members.
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Benefits of FDI
•Transfer of technology to individual firms and technological
spill-over to the wider economy;
•Increased productive efficiency due to competition from
multinational subsidiaries;
•Improvement in the quality of the factors of production
including management in other firms and not just the host firm;
•A healthy balance of payments through the inflow of investment
funds;
•Increases in exports
•Increases in savings and investment;
•Faster growth of output and employment; and
•Welfare improvement due to lower prices of goods and the
introduction of new or better quality goods.
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History of NIPC
The Nigerian Investment Promotion Commission (NIPC) was
established by NIPC Act No.16 of 1995. This legislation repealed
the Industrial Development Coordination Committee (IDCC) Act
No.36 of 1988.
The IDCC itself was established as part of the institutional
reforms necessary for the implementation of the Structural
Adjustment Programme (SAP).
However, the IDCC was bedeviled by daunting problems which
militated against its optimal performance. They include; lack of
quorums at meetings, inadequate funding and intrusion into its
statutory functions by other ministries.
It was on the basis of this , that the Government , in 1995 came
out with the NIPC Act No. 16 of 1995, and inaugurated its first
Governing Council on the 30th September, 1997. The Commission
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eventually commenced operation in 1999.
Objectives of the Commission
•To project Nigeria as a safe country to invest in and prosper
•To highlight investment opportunities in Nigeria by sector.
•To identify Nigerians who will invest in these opportunities.
•To empower Nigerians to invest.
•To identify and encourage target countries and groups
outside Nigeria to invest in the economy.
•To portray Nigeria as objectively combating corruption,
advanced fee fraud, and improving infrastructure.
•To position itself to effectively facilitate investment promotion
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in Nigeria.
Functions of NIPC
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The Commission is mandated to encourage, promote
and coordinate investment in the Nigeria Economy.
The enabling law empowers the Commission to grant
approvals on fiscal concessions on industry related
incentives such as:
 Pioneer industries;
 Local raw material utilization;
 Export oriented industry;
 Implant training;
 Investment on infrastructural facilities;
 Research and development;
 Investment in economically disadvantaged areas;
provided that the fiscal incentives for which
approvals are given shall be for tax concessions.
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Functions of NIPC Cont’d
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Attract investments in and outside Nigeria through
promotional means;
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Register and keep records of all enterprises as
applicable;
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Advice the Federal Government on policy matters
including fiscal measures designed to promote the
industrialization of Nigeria.
To serve as a coordinating and approval centre at the
Federal level, for all governmental approvals with
respect to the establishment and operation of
industries or business undertakings, and with respect
to the operation of governmental measures and
schemes aimed at promoting industrialization of the
Country.
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WHAT WE ARE
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The NIPC is the only legally empowered Federal
Government agency in Nigeria established by an act
of parliament (i.e. NIPC Act 1995) to promote,
coordinate and monitor all investment in Nigeria.
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We attract, co-ordinate and monitor all investment in
Nigeria.
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We report to and are supervised by the Presidency.
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We maintain vertical and horizontal relationships with
other Agencies of Government and the private sector
for the purpose of investment facilitation in Nigeria.
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WHAT WE ARE CONT’D
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We provide a range of investment related services that
span through Investment Promotion, Investors
Relation, Investment friendly Policy Advocacy and
Post Investment after-care services.
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We work in collaboration with agencies like UNIDO,
MIGA, and FIAS, to facilitate the implementation of
new Institutional Strategy for investment promotion.
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We are equipped with staff that have requisite
competencies and skills in the art of best practices on
investment facilitation.
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Provisions Relating to Investments
A non-Nigerian may invest and participate in the operation of
any enterprise in Nigeria;
An enterprise, in which foreign participation is permitted,
shall after its incorporation or registration, be registered with
the NIPC;
A foreign enterprise may buy the shares of any Nigerian
enterprise in any convertible foreign currency.
Foreign Investors could also repatriate dividends or profit
(net of taxes) attributable to the investment or capital in case
of relocation.
Remittance of proceeds (net of taxes) and other obligations in
the event of sale or liquidation of the enterprise or any
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interest attributable to the investment.
Provisions Relating to Investment Cont’d
The NIPC Act also provides that:
No enterprise shall be nationalized or expropriated by any
government of the Federation, and
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 persons.
There will be no acquisition of an enterprise by the Federal
Government unless the acquisition is in the national interest or for
a public purpose under a law which makes provision for:
Payment of fair and adequate compensation
A right of access to the courts for the determination of the of the
investor’s interest of right and the amount of compensation to
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which he is entitled.
Provisions Relating to Investment Cont’d
Countries are also welcome to execute and enter into bilateral
Investment Promotion and Protection Agreements (IPPA) with
the Nigerian government.
NIPC’s Business Permit Registration confers permanent
authorization for the local operation of businesses with foreign
investments either as branch/subsidiary of a foreign company
or otherwise.
Expatriate Quota is the official permit to a company;
conveying permission for the company to employ individual
expatriates to separately approved job designations, and also
specifying the permissible duration of such employment.
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ACHIEVEMENTS
Tracking of FDI in Nigeria
YEARLY PERFOMANCE OF FDI INFLOW BETWEEN 1999-2004
NO OF
COMPANIE
S
RECORDED
FDI
INFLOW
(Million $)
LOCAL
INVESTMENT
(Million N)
EMPLOYMEN
T
GENERATIO
N
38
32.10
4,253.91
3,964
2000
58
47.19
21,166.70
3,683
2001
50
287.29
11,209.75
5,233
2002
117
389.71
25,941.46
19,349
2003
90
240.03
30,277.12
8,240
2004
109
97.65
26,430.32
7,814
TOTAL
462
1,093.97
119279.26
48,283
YEARS
1999
Source: NIPC Records
Reinvestment by major multinationals e.g. Nigerian
Breweries Limited, Guinness Nigeria Plc, Unilever Nigeria
Plc., West African Cement Company, Nestle Foods Plc.
British America Tobacco company, MTN, V-Mobile,
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Globacom , etc. amount to over US$4billion
ACHIEVEMENTS
•Wealthy Nigerians Initiative
Aimed at encouraging wealthy Nigerians at home and in the Diaspora to
invest in the country.
•National Council on Investment
To fashion out a national investment policy for the country and also
facilitate streamlining of investment promotion activities nation-wide.
•Inter-agency Collaboration/Embassies
Networked with government Agencies and Embassies to establish
working relationships with them
•Workshops on Market Fires
Organized two workshops in Abuja and Lagos to sensitize the traders of
the negative impact of fire disaster on investment and what could be
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done to reduce or minimize the menace.
ACHIEVEMENTS CONT’D
• Presidential
Advisory Council on Investment
Set up by Mr. President to advise on investment and members are people in
positions that can influence the investment decisions of their companies as
well as their government to invest in Nigeria.. NIPC serves as the Secretariat.
•Policy Advocacy
Effective Policy Advocacy mechanism designed to serve as an interventionist
system of addressing problems encountered by investors.
•Business and Investment Forums
Forums packaged to target identified potential investors and multinational
companies. Countries visited include: Canada, Malaysia, China, London etc
•Matchmaking Investment Meetings
Organized matchmaking meetings between Potential investors and
government agencies, private sector associations, consultants and private
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Image-building
ACHIEVEMENTS CONT,D
Embarks on image building activities to project Nigeria as the most
profitable investment destination in Africa through adverts in the local and
international media, meetings and courtesy call on foreign Embassies etc.
• Collaborations with other International Agencies
UNIDO- in which 75 projects were packaged and promoted abroad;
WAIPA and Association of the West African Investment promotion
Agencies AIPAWAS) and NIPC is Vice -Chairman of the Association.
• Incentive Package under presidential Cassava Initiative
Prepared appropriate incentive package designed to stimulate investment in
the sector.
•Role of NIPC in Micro, Small and Medium Enterprise (MSME)
project/World Bank
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NIPC/World Bank project to support SME development in the country.
Challenges
•Problems hindering investment into the country
•Inconsistent government policies
•Unfriendly Business laws
•Social vices such as corruption, drug trafficking,
insecurity, Financial and economic crimes
•Uncompetitive incentives
•Frequent Labour crises
•Poor state of infrastructure
•High cost of doing business
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Challenges Cont’d
Efforts of Governments
•Consolidation in the banking sector through the new
capitalization of a minimum of N25 billion;
•Enhancement of transparency and accountability in
government procurement through the establishment of Price
Monitoring and Budget Implementation Unit (Due Process) in
government procurements and contract awards;
•Continued deregulation and liberalization of the economy
• Empowerment of the private sector through the abrogation of
all obnoxious investment laws and the enactment (and constant
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review) of globally competitive investment law
Efforts of Governments Cont’d
•Concerted fight against corruption and economic crimes –
establishment of EFCC, ICPC etc
•Encouragement of a strong and independent judiciary
•Vigorous pursuit of stable macroeconomic environment
•Substantial public expenditure to improve physical and
social infrastructure.
NIPC has been accorded its proper place by its membership
of the Economic Management Team in the Presidency.
Mr. President also has special interest in investment and is
the Chief Investment promoter of the country.
Lastly, NIPC has been re-positioned to play its role in
ensuring and protecting the interest of investors in Nigeria.
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THANK YOU
FOR YOUR ATTENTION
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