Promoting Value Addition in Agribusiness - ERGP Summit 2019 Nigeria

1. Promoting value addition in agribusiness 2nd agricbusiness summit NIGERIAN INVESTMENT PROMOTION COMMISSION abuja| 28 august 2019

2. Nigeria’s economy

3. Economic Recovery and Growth Plan (ERGP) Restoring Growth • Macroeconomic stability • Economic diversification 2017 - 2020 Investing in Our People • Social Inclusion • Improved human capital • Job creation and youth empowerment Building a Globally Competitive Economy • Investing in infrastructure • Improving the business environment • Promoting digital-led growth Broad Policy Objectives • Double manufacturing’s share of GDP • Maintain a competitive exchange rate • Reduce inflation from 18.6% to 9.9% • Increase tax/GDP ratio from 6% to 15% • Improve budget preparation and execution process • FDI target of $10bn • Create 15m new jobs • Grow GDP at average of 4.62% • Top 100 ease of doing business ranking by 2020 • Rebalance domestic/foreign debt from 84:16 to 60:40 Source: ERGP document

4. ERGP Investment Requirement Sources: NBS

5. ERGP: Priority sector objectives and private sector investment requirements

6. Recovery has been driven by non-oil sectors 2018 (N trillion) Contribution to GDP (%) Sector 2017 2018 2020E Agriculture 25.08 25.13 27.7 Industries 22.26 22.25 21.8 52.66 Services 52.62 50.6 Growth Rate (%) Sector 2017 2018 2020E Agriculture 8.37 3.45 2.12 8.02 Industries 2.19 1.94 (0.91) 1.83 5.82 Services Total 7.0 0.83 1.93 Source: National Bureau of Statistics • FBT – Food, Beverages & Tobacco; TAF – Textile, Apparel & Footwear; Tel. & Inf. Ser. – Telecommunications & Information Services; PSTS – Professional, Scientific and Technical Services; Fin & .. – Financial and Insurance

7. Cautious economic recovery Real growth rate… Quarterly growth rate, % Recession Period Sectoral growth rate Recovery driven by oil sector Sources: Central Bank of Nigeria, National Bureau of Statistics

8. Improving Nigeria’s Agricbusiness Competitiveness

9. Investor feedback (no particular order) “corruption: can’t get anything done without paying a bribe” “difficult operating conditions: no power, no roads, no public utilities” “harassment of existing investors” “tariff measures never work, borders too porous” “high cost of doing business” “poor private sector engagement in policy formulation” “painful, long, unpredictable government approval process” “difficulty with getting access to FX” “government not doing enough” “terrifying herdsmen attacks” “road to the ports” “meeting with senior government officials cancelled after investor’s arrival” “corrupt judiciary; too many sacred cows” “easier to import than to invest” “difficulty with getting visas” “poor work ethic, lack of skilled labour” “government policy flip flop, changing rules without notice” “announced tariffs not enforced” “insufficient investment incentives”

10. Investor feedback (no particular order) “poor entrepreneurial skills and ethics” “poor project designs” “too cautious approach to business” “undermining of government economic policies” “poor preparation of business proposals” “unpreparedness to participate in policy formulation ” “unpreparedness to follow due process ” “over reliance on government patronage” “lack of knowledge of global market” “poor access of government facilitation systems” “lack of knowledge on changing global practices”

11. Agricultural sector National policy Contribution to 2018 national GDP 25% • Accounts for about 50% of the national workforce • Contributes an annual average of 24% to the national GDP • Accounts for about 1% of total export and 10% of total import • Accounts for 75% of the non-oil exports earnings of the country crop production livestock fisheries forestry 23% 02% 0.5% 0.3% Contribution to national development N70 billion

12. Nigeria Agricultural Sector Global arable land holdings (land size in Km2 ) • The Nigerian Investment Promotion Commission Act allows 100% ownership of companies by foreigners, while the Foreign Exchange Miscellaneous Act, guarantees 100% Repatriation of Capital, Profit, & Dividends through authorized means • All agricultural and agro-industrial machines and equipment enjoy zero percent (0%) duty • All agro-allied business do not have their capital allowance restricted • Processing of agricultural produce is a pioneer industry; consequently, there is 100% tax-free period for 5years • Up to 75% guarantee for all loans granted by commercial banks for agricultural production and processing under the Agricultural Credit Guarantee Scheme Fund (ACGSF) administered by the Central Bank of Nigeria • Expatriate quota and resident permits in respect of expatriate personnel engaged by agro-allied companies India size: 156,463,000 Main export: Rice USA size: 152,262,500 Main export: Soybean Russia size: 123,121,820 Main export: Wheat China size: 118,900,000 Main export: Tea Brazil size: 80,976,000 Main export: Sugarcane Ukraine size: 32,776,000 Main export: Sunflower Australia size: 46,048,000 Main export: Beef Canada size: 43,766,000 Main export: Wheat Argentina size: 39,200,000 Main export Soybeans: Nigeria size: 34,000,000 Main export: Cashew DiscussionDraft Opportunities in Nigeria Agric Economic contribution Economic contribution 90% Crop production Rice Wheat 7% Livestock Incentives Tomato Soybean 25% contributions to 2018 GDP & 48% contribution to employment Q3 2017 Livestock Sesame Fish Cashew 2% Fisheries Oil Palm Cassava Yam 1% forestry Maize • Source: NBS, NIPC, World Bank, FAO

13. Nigeria’s agricultural produce with international market potentials Products with high demands Priority products • Nigeria is implementing a Zero oil plan to effectively diversify its export base • Below is a snapshot of African imports of four out of the 11 priority products from the world for 2017:

14. Value chain development and benefits

15. Agricbusiness facilitation system

16. About NIPC

17. NIPC’s principal functions • Nigerian Investment Promotion Commission (NIPC) was established by the NIPC Act 16 of 1995 to encourage, promote and co-ordinate investments in Nigeria

18. Country-focused investment promotion strategy Objective Approach Result: Tier 1 strategic investment promotion countries United States China Netherlands Germany France United Kingdom Japan South Africa India Italy Russia United Arab Emirates Malaysia Spain South Korea Switzerland Singapore Canada Belgium Saudi Arabia

19. Compendium of Investment Incentives in Nigeria • Compilation of fiscal incentives in Nigerian tax laws and duly approved sector-specific incentives • 6 principal sections • Investment policies and protections • General tax-based incentives • Sector-specific incentives • Tariff-based incentives • Export incentives • Special Economic Zones • First step in understanding impact of incentives in achieving Government’s economic objectives and considering incentive reforms • Available at www.nipc.gov.ng Investment Promotion Investor Relations Policy Advocacy Project Attractive & Image Building

20. iGuide Nigeria • An easy-to-use online investment guide that provides investors with up-to-date and pertinent information on the processes, procedures and basic costs of doing business in Nigeria • It provides information on Starting Business, Labour, Production Factors, Land, Taxes, Investor Rights, Growth Sectors and Opportunities • The information will enable investors to make better informed decisions on Nigeria as a preferred investment destination • Available at: • www.theiguides.org/nigeria • www.nipc.gov.ng UNECA – United Nations Economic Commission for Africa UNCTAD – United Nations Conference on Trade and Development

21. Current initiative: Investment opportunity profiling • Profile investment opportunities across Nigeria • Existing opportunities • New projects (brownfield or greenfield) • Public Private Partnership projects • Prospective investors seeking opportunities • Standardised template • To be used by all IPAs in Nigeria • Supported by a Toolkit for Investment Profiling • Database of investment opportunities • Maintained by NIPC • Analysed, by economic impact, sector, region, state • Summarised, for presentations and matchmaking • Abridged, in deal books • In full, for serious investors

22. One-Stop Investment Centre (OSIC) at NIPC • Houses 27 agencies to facilitate investments and reduce time requiredto process regulatory approvals and permits • Provides assistance with information and requirements from incorporation to expansion • Also supports with business visa facilitation Type of Business Specific/Sector Agencies Generic Agencies Software development and creative industry Sample business entry scenarios Power Generation Drug Manufacturing for export

23. OSIC Lab Transparent platform for speedy resolution of investment related issues 3 weeks Investor advised of resolution Investor raises issue MDAs hear investor’s issues together Comprehensive all-of-government solution agreed Increase confidence in business environment Drive practical policy reforms OSIC Lab meeting called Members include… Encourage new and existing investors Encourage continued investment/protect existing jobs Protect existing investments/jobs and encourage new investments/jobs

24. Ownership Dispute Resolution Guarantees Registration Obligation • Nigerians and foreigners can invest in any sector, except for those on the negative list • No restriction on foreign percentage ownership • Amicable resolution by mutual discussion or arbitration of investor/government disputes • Provisions of any Bilateral Treaty with the investor’s country will apply • Right of recourse to international arbitration under ICSID Rules • Government will not nationalize or expropriate any enterprise • Right of access to courts and fair and adequate compensation if acquisition is in national interest/for public purpose • No restriction on repatriation by foreigners of investment returns or sale proceeds through an authorized dealer • Enterprises in which foreigners can participate are required to register with NIPC before commencing business Investor Obligation and Protections in the NIPC Act ICSID = International Centre for Settlement of Investment Disputes

25. For further details, please contact us Yewande SadikuExecutive Secretary/CEO infodesk@nipc.gov.ng osicinfodesk@nipc.gov.ng NIGERIAN INVESTMENT PROMOTION COMMISSIONPlot 1181 Aguiyi Ironsi Street Maitama District Abuja www.nipc.gov.ng