Transcript H.R.Mr. Wu Bangguo-Chairman Standing Committee

PRESENTATION
BY
Engr. Mustafa Bello, FNSE
Executive Secretary
NIGERIAN INVESTMENT PROMOTION COMMISSION
At the
Business Meeting in Honour of
H.E. Mr. Wu Bangguo
Chairman, Standing Committee
National People’s Congress of China
November 7, 2004
Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi
Street, Maitama District, Abuja. 09-4134317
www.nipc-nigeria.org .
The Competitiveness of
the Nigerian Investment
Climate and the
Opportunities Abound
Structure of the Nigerian
Economy
 market-oriented;
 private sector-led;
 highly competitive, internally and globally,
particularly in areas of comparative
advantage;
 technology-driven;
 broad-based;
 humane; and
 open.
The Nigerian Investment
Climate
 Deregulated & liberal investment regime –
(Market competition & policy coherence)
 Virile Private Sector
 Transparent, simple & stable application of tax
laws and administration
 Concerted fight against corruption and Economic
crimes
The Nigerian Investment
Climate
 Strong & independent legal institutions
 Strong & autonomous financial institutions
 Strict adherence to accounting standard
 An effective and well maintained institution for FDI
– NIPC (apex body for investment facilitation)
 Stable macroeconomic fundamentals
Foreign Investment Regulations
& Laws
There are two principal laws guiding investment
 Nigerian Investment Promotion Commission Act 16
of 1995
 Major Features
Liberalization of the economy
-100% ownership of investment in any sector (except ones
listed in the ‘negative’ list) irrespective of nationality
Guarantee against nationalization or expropriation by
government of the federation
Guarantee unconditional transferability/repatriation of funds
 Provision of the law
An enterprise, in which foreign participation is permitted,
shall after its incorporation with CAC, be registered with the
NIPC
Foreign Investment
Regulations & Laws (Cont’d)
 Foreign Exchange (Monitoring & Miscellaneous Provisions)
Act 17 of 1995
Major Features
Any person may invest in any enterprise or security with
foreign currency or capital imported into Nigeria through an
authorized dealer
Any person may open, maintain and operate a domiciliary
account designated in foreign currency with an authorized
dealer
A person whether
- Resident in or outside Nigeria
- A citizen of Nigeria or not
may deal in, invest in, acquire or dispose of, create or
transfer any interest in securities and other money market
instruments whether denominated in foreign currency in
Nigeria or not.
Other Major Legislations
Guiding Investment
 Immigration Act of 1963
 The Companies and Allied Matters Act of
1990 (as amended)
 The National Office of Technology
Acquisition and Promotion Act of 1979
 The Investment and Security Act of 1999
Major Sectoral Profile
 Agriculture/Agro-Allied
 Employs over 70% of national workforce
 Contributes about 40% to GDP annually
 Endowed with fair variation of climatic conditions and
vegetation for cultivation of varied economic crops
 Estimated farm loss – a minimum average of 10% of
harvest
 Developing agro-allied industry – processing of farm
produce into semi or finished goods
 Renewed commitment to extension services
Major Sectoral Profile
 Manufacturing
 Capacity utilization
averaged 40% annually
since 2001
 Improved GDP contribution
– between 6 – 10% within
the last three years
 Dominance of “light
assembly” type consumer
goods manufacture
 Increased private sector
investment
 Steady encouragement of
SME activities
 Oil & Gas
 Crude oil reserve is
about 30 billion barrels
 Gas reserve is about 170
trillion cubic meters
 Contributes over 70% to
GDP
 Nigeria has successfully
launched its 5th train of
the LNG project
 Downstream activities of
the sector has been
deregulated
Major Sectoral Profile
Infrastructure and Services
 Telecommunication
 Teledensity is over 1.5
 Deregulated
 Four fully functional
GSM operators and
sizeable number of
wireless private
operators
 Two operational
National carriers
 Financial and Capital
Market
 Autonomous regulatory
bodies – CBN & SEC
 An efficient trading
cycle
 Enhanced capitalization
of the banking sector
 Developing mortgage
banking system
 Fully information
technology driven
Major Sectoral Profile
Infrastructure and Services (cont’d)
 Power Generation & Distribution
Installed Gen Capacity:
6161 MW
Available Gen. Capacity:
4000 MW
Actual Ave. Daily Demand Met:3000 MW
Est. Actual Daily Demand:
5000 MW
Est. Daily unmet Demand:
2000 MW
Investment Opportunities
Agro Allied Industries

Rubber Products – tyres,

condoms

Wood Products –furniture

Palm Oil
Refining/Processing

Fruit Juice – current ban on
importation of juice
Fishing – deep sea/aqua
culture

Poultry Feeds
Production

Cassava Processing –
industrial starch, chips &
Flour etc.
Investment Opportunities
 Transport
 Solid Minerals
Development
Intercity road and rail
mass transportation
Ocean liner services
Automobile, train
and ship building
Inland Container
Depot
Inland water
transportation
Endowed with a
range of
economically viable
minerals – kaolin,
limestone, gypsum,
silicon, coal etc
Second world
largest deposit of
bitumen
Investment Opportunities
 Oil & Gas
Upstream
- Surveying
- Civil works
(slabbing/concreting jobs at rig
sites, preparation of drilling
locations)
- Seismic data acquisition &
interpretation
- Geological activities
- Drilling operations
- Exploration & production
 Downstream
- Refining
- Petrochemical industries
(industrial & food grade solvents,
insecticides, cosmetics, mineral
oils, petroleum jelly, fertilizers,
paints)
-
-
Bituminous-based
water/damp proof building
materials (tarpaulin,tiles etc)
Export of refined products
surplus
Investment Opportunities
 Oil & Gas (cont’d)
Gas Development and Conversion
- Natural Gas Pipeline Network
- Butanization Project (filling facilities,
manufacturing of cylinders, installation
of filling plants & retail distribution)
- Vehicular Fuel (compressed Natural
gas)
Support Services & Pollution control
Privatization &
Commercialization
 The program is now in its third phase
involving enterprises in the monopoly
enterprises such as:
Petroleum Refineries, National
Electric Power Authority (NEPA),
Nigerian Telecommunications
(NITEL), Sea ports, Vehicle
assembly plants etc.
Generous Package of
Investment Incentives
 Tax Holiday - Pioneer Status – 5 years for qualified
activities
 Enriched Capital Allowances - ranges from 50 – 90%
 Corporate Tax – 30%
 Withholding Tax on dividends, interest, and rent is 10%: for
Royalties 15% and on management and technical
agreement 10%
 Profits exempted from tax
 Profits derived from exports, and used to purchase raw
materials, plant, equipment and spare parts in Nigeria
 Profits of a company whose supplies are exclusively
imported for the manufacturing of products for export
 Profits/gains of a 100% export-oriented undertaking
established within and outside an export free zone for
the first three consecutive tax years
Generous Package of
Investment Incentives
 Export Incentives
 Manufacture-in-bond Scheme
 Duty Drawback Scheme
 Export Processing Zone (EPZ)
- Free customs duty on all imports in connection with an
approved activity
- Freedom from all taxes and foreign exchange regulations
- Unrestricted repatriation of foreign capital on investment
- 100% foreign or local ownership of investment allowable
- No import or export licenses required.
- Rent-free land at construction stage
Basic Factor Cost
 Land –N7,000 - N15,000($50-  Telecommunications
 Fixed – N4 ($0.03)per min
$100) /sqm
 Mobile (GSM)
 Labour – N90,000($643)per
 70k per sec
annum (minimum basic wage)
 N21 ($0.15) per min
 Internet Connectivity
 Power
 Residential – N4 ($0.03)per unit  Accommodation
 Commercial – N6($0.043) per
unit
 Transport
 Air (Local) – N9,000($64.3)
 Road
 Intercity – N300($2.14) per
60km
 Intracity - N400($2.86) per hr
 Residential
 Rent - (N10,000 –
N15,000) ($73$109)/sqm/yr
 Office
 Rent – (N10,000 –
N15,000) (73-$109)/sqm/yr
 Hotel
 N15,000 – N25,000($109$182) per night
NIPC & Investors
 Services
 Facilitate the procurement of all business approvals
- Business Registration
- Expatriate Quota
 Facilitate the administration and approval of investment
incentives
- Pioneer Status
 Negotiates specific incentives for the investor, in
consultation with appropriate government agencies
such as Federal Ministries of Finance and Industry
 Provides up-to-date information on investment
opportunities available in the country
- Brochures
- Investors’ Guide
NIPC & Investors
 Services (Cont’d)
Advocate for improved business environment
in the economy
Identifies difficulties and problems encountered
by investors, proffers solutions and renders
assistance
Initiates, organises and facilitates ‘matchmaking’ meetings between investors
Facilitate/organise outbound and inbound
investment missions
Conclusion
Nigeria offers one of the most rewarding
investment destination, not just in
Africa but, in the World.
And
Government, being aware of this,
continues to appraise its policies with
a view to consistently ensuring global
competitiveness of the investment
environment.
Thank you for your attention!