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The Nigerian Investment Climate and Opportunities Engr. Mustafa Bello, FNSE Executive Secretary/CEO NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC)

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Presentation on theme: "The Nigerian Investment Climate and Opportunities Engr. Mustafa Bello, FNSE Executive Secretary/CEO NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC)"— Presentation transcript:

1 The Nigerian Investment Climate and Opportunities Engr. Mustafa Bello, FNSE Executive Secretary/CEO NIGERIAN INVESTMENT PROMOTION COMMISSION (NIPC)

2 Presentation Outline The Nigerian Economy Global Competitiveness Prevailing Business and Investment Climate Investment Opportunities in the Economy Incentives NIPC and the Investor Conclusion Nigerian Investment Promotion Commission 2

3 Nigeria’s Economic Blueprint: The Vision 20:2020 Making the Nigerian economy one of the top 20 by the year 2020 with a GDP of USD900bn per Capita Attracting US$130billion private capital over the next 10 years Optimising key sources of economic growth by enhancing production for real sector’s competitiveness and for exports Guaranteeing productivity by strengthening linkages between key sectors of the economy Fostering sustainable social and economic development by ensuring national security and enhancing infrastructure. Nigerian Investment Promotion Commission 3

4 Nigeria’s Economic Performance Nigerian Investment Promotion Commission 4 Sources: CBN, DMO,NBS

5 Nigeria’s Economic Performance cont’d Nigerian Investment Promotion Commission 5 Sources: CBN, DMO,NBS

6 Nigeria’s Economic Performance cont’d The External Reserve as at 10th of May 2012 stood at US$36.76 billion External Debt Profile with ample fiscal space – US$5.91 billion – March 2012 Industrial Capacity Utilisation – 56.98% (1 st Half 2011) Nigerian Investment Promotion Commission 6 Sources: CBN, DMO,NBS

7 Nigeria’s Real GDP Growth Nigeria’s Real GDP Growth is robust despite challenges in the area of Infrastructure and the recent global economic recession 7 Nigerian Investment Promotion Commission Source: NBS

8 Global Real GDP Growth – 2011 & 2012 Source: World Economic Outlook 2012 BRICs High Income 8 Nigerian Investment Promotion Commission Nigeria has maintained an average growth of about 7% in the last three years While World GDP continues to shrink, Nigeria is expected to sustain its growth at about 7%

9 World’s Fastest Growing Economies - 1 Nigerian Investment Promotion Commission 9 Source: National Bureau for Statistics (NBS)

10 World’s Fastest Growing Economies - 2 Nigeria’s economy is rated as the world’s topmost ‘global growth generator’ (3G) of the next 40 years........ CIRA Citi Investment Research and Analysis 10 Nigerian Investment Promotion Commission

11 Nigeria’s Economy: ‘too large to ignore ’ 8 th largest population in the world – over 167 million people – 4 th largest population under the age of 20 10 th world largest reserves of oil and gas – 36.2 billion barrels of oil – 184 trillion Cubic Feet of natural gas 4 th largest equity market in the MSCI Frontier Market index – Largest outside of the Gulf Cooperation Council (GCC) 5 th fastest growing economy in 2010 covered by Citi Investment Research and Analysis (CIRA) economists – China, Taiwan, Singapore & Qatar 1 st among the N-11 leading ‘global growth generators’ (3G) over the next 40 years – Prospects of growing its global GDP share to 2.5% in 2050, overtaking Italy, France, and UK Home to emerging world’s largest cement companies - The DANGOTE GROUP 11 Nigerian Investment Promotion Commission

12 Drivers of Nigeria’s Economy Rule of law – anchored on good governance, transparency, accountability, zero tolerance on corruption Robust Private Sector – Public Private Partnership (PPP) initiatives Commitment to creating Enabling Business Environment – Stable Democratic System – Infrastructure re-engineering and expansion – Strong and virile Financial and Insurance sector – Business Entry procedures – simplified and streamlined – The Public Service reform – removal of bureaucratic huddles – Improved International Image Low External Debt ($5.00+ exposure currently) – Debt position with a lot of fiscal space Nigerian Investment Promotion Commission 12

13 13 Government Policy Thrust On Investment Emphasis on FDI to fund Transformation Agenda – On a Win-Win Basis Promote and attract value-added industrialization Make FDI work for local economy; i.e. job creation, value-chain, out-sourcing etc – SMEs must benefit from the activities of TNC’s in the economy Promotion of non-oil sector prioritized Target and attract FDI into key priority sectors – Power, Infrastructure, Agriculture, Solid Minerals, & Non-extractive Oil & Gas activities Commitment to Privatisation, Commercialisation and Liberalisation Programme Promotion of export oriented activities Nigerian Investment Promotion Commission 13

14 Nigeria’s Business Climate: Challenges High Rate of Unemployment Dependence on Oil Revenue Overdependence on Imports Huge Infrastructure deficit Security Concerns Low Capacity in PPP management Lack of access to Long-term fund Incidences of Corruption Nigerian Investment Promotion Commission 14

15 Nigeria’s Business Climate: Strengths Stable Macroeconomic and Political environment Predictable Public Fiscal Framework Favourable Credit Rating Improved International Image Predictable Investment Legal and Regulatory Frameworks Political Will to implement Reforms Growing Private Sector Supportive Investment Facilitation Mechanism Strong and Virile Local Financial and Development Institutions Huge Internal Market Nigerian Investment Promotion Commission 15

16 Nigeria’s Business Climate: Opportunities Cost effective human resources; agile and entrepreneurial youth population Huge potential in the non-oil sectors Policies support Import Substitution Projects Liberalized economy Investment Opportunity in all sectors of the economy Growing middle class population Nigerian Investment Promotion Commission 16

17 17 Basic National Investment legislations The Nigerian Investment Promotion Commission Act 16 of 1995 –Ownership –100% ownership assured except investment –listed under the ‘Negative ‘ lists –covered by the Nigerian Content and Cabotage Acts –Investment Protection Guarantees – Non-expropriation of Investment: The NIPC Act 16 of 1995 guarantees that ‘no enterprise shall be nationalized or expropriated by any government of the federation’ The Foreign Exchange (Monitoring & Miscellaneous Provisions) Act 17 of 1995 – Repatriation of Profit – Under the Act 17 of 1995, investors are free to repatriate their profits and dividends net of taxes through any authorized dealer in freely convertible currency There are other sector specific regulatory legislations. Nigerian Investment Promotion Commission17

18 18 Framework for Doing Business All business enterprises must be registered with the Corporate Affairs Commission. – 24 hrs delivery assured Investments with foreign equity must obtain a business permit from NIPC to operate. – 24 hrs delivery assured Investors are free to repatriate their profits and dividends net of taxes through any authorized dealer in freely convertible currency. – All capitals imported for investment purposes must be declared to obtain Certificate of Capital Importation for repatriation purposes Nigerian Investment Promotion Commission

19 Framework for Doing Business Companies in manufacturing activities must obtain SONCAP certification for it’s products from the Standards Organization of Nigeria (SON). Prevailing Corporate Income Tax is 30% per annum. Engagement of foreign professionals requires expatriate quota slots from relevant authorities – Facilitated at the One Stop Investment Centre (OSIC) Processing of incentives and negotiation of concessions is facilitated by NIPC 19 Nigerian Investment Promotion Commission

20 Investment Opportunities Investment Opportunities exist in all sectors of the economy, especially:  Infrastructure  Power – Generation, Transmission & Distribution  Transportation – Rail, Air, Road  Agriculture & Agro Allied  Services  Telecommunication, Postal Services  Health Care Services  Banking & Financial services  Tourism/Hospitality  Education  Waste Management & Treatment  Mineral Mining  Manufacturing  Pharmaceuticals, Textiles & Garments, Automobiles, Iron & Steel  Oil & Gas (up-and down-stream operations) Nigerian Investment Promotion Commission 20

21 Incentives Natural – Large internal market 140 million (As at 2006 Census) Nigerians and possible access to over 360 million ECOWAS and Economic and Monetary Community of Central Africa (CEMAC) market – Huge deposit of natural gas – 1.84 trillion cubic feet – Youthful population – about 60% of population – Robust and Virile Private Sector such as Dangote, Honeywell, Nestle,Unilever, etc. – 36 strategic mineral resource endowment Coal deposit is 2.6 billion tonnes ( OR ( Nigerian Investment Promotion Commission 21

22 Incentives Fiscal Incentives – Up to 5 years Income Tax Holiday under the Pioneer Status for qualified activities – Very low VAT regime – 5% – Income Tax of 30% – Investment in Infrastructure – 20% of cost per annum for 5 years – Research & Development – use of local inputs – 140% – Minimum local raw materials utilization – 20% for 5 years – Other Capital Allowance for Specific sectoral activities – Free market – easy entry and exit procedures – Transferability of profit, dividends, etc with ease. Nigerian Investment Promotion Commission 22

23 The NIPC NIPC Act No. 16 of 1995 confers on NIPC the responsibility to: – co-ordinate, promote and facilitate domestic and foreign investments into Nigeria – support and provide necessary assistance and guidance to foreign and domestic investors in Nigeria – develop and implement innovative, focused and effective Investment promotion strategies – target & attract investment into the economy – advise government on policy matters fiscal and non-fiscal measures designed to promote industrialization and sustain the enabling environment Nigerian Investment Promotion Commission 23

24 The One-Stop Investment Centre (OSIC) OSIC is government’s strategy at – streamlining the investment procedures remove all bottlenecks in business legalization procedures – provide prompt, efficient and transparent service – coordinate investment facilitating related agencies 26 government Ministries and Agencies Services at the Centre, includes and not limited to – Business Incorporation/ Registration, Grant of Approvals, Permits/License and Investment Information & Data More centers to be opened in Lagos, Port-Harcourt and Kano Nigerian Investment Promotion Commission24

25 NIPC & The Investors Arrange and facilitate meetings with relevant Government Agencies/State Governments in Nigeria Arrange and coordinate site visits as part of pre- investment activities and post-investment services Provide prompt assistance to investors through dedicated Account Officer/Team to projects Advise/advocate for policy changes that favorably affects and support investments Creation and management of Investment Fund to fund investment projects in critical sectors Nigerian Investment Promotion Commission25

26 Stimulating Private Sector Growth Proactive action towards enhancing business environment challenges – Inaugurated two Business Committees Doing Business Committee – To address policy issues inhibiting competitive business environment – To coordinate policy reforms that would stimulate private sector growth Competitiveness and Investor After-Care – To instil fair and transparent business operational procedures – To eliminate discretionary concessions and privileges – To enhance the image of the economy and build investors’ confidence 26 Nigerian Investment Promotion Commission

27 Thank You The Executive Secretary/CEO, Nigerian Investment Promotion Commission (NIPC) Plot 1181 Aguiyi Ironsi Street Maitama District, Abuja, Nigeria, Nigerian Investment Promotion Commission27

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