Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi Street, Maitama District, Abuja. 09-4134317 www.nipc-

1. PRESENTATION BYEngr. Mustafa Bello, FNSE Executive SecretaryNIGERIAN 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 .

2. The Competitiveness of the Nigerian Investment Climate and the Opportunities Abound

3. 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.

4. 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

5. 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

6. 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

7. 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.

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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.

14. Transport Intercity road and rail mass transportation Ocean liner services Automobile, train and ship building Inland Container Depot Inland water transportation Solid Minerals Development Endowed with a range of economically viable minerals – kaolin, limestone, gypsum, silicon, coal etc Second world largest deposit of bitumen Investment Opportunities

15. 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 Investment Opportunities • 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

16. 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

17. 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.

18. 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

19. 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

20. Land –N7,000 - N15,000($50-$100) /sqm Labour – N90,000($643)per annum (minimum basic wage) Power Residential – N4 ($0.03)per unit 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 Basic Factor Cost • Telecommunications • Fixed – N4 ($0.03)per min • Mobile (GSM) • 70k per sec • N21 ($0.15) per min • Internet Connectivity • Accommodation • 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

21. 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

22. 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 ‘match-making’ meetings between investors • Facilitate/organise outbound and inbound investment missions

23. 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!