Nigeria: A Preferred Destination for Foreign Direct Investment in Sub-Saharan Africa
Nigeria: A Preferred Destination for Foreign Direct Investment in Sub-Saharan Africa
Nigeria, proclaimed as Africa’s largest economy in 2014 after recalculating its Gross Domestic Product (GDP), is an attractive destination for investors. This recalculation included previously undervalued sectors such as its flourishing entertainment industry (Nollywood and Nigerian music) and Information and Communications Technology (ICT). With a GDP exceeding $510 billion and an annual growth rate surpassing 6%, Nigeria offers vast investment opportunities.Nigeria’s appeal to investors goes beyond its diverse natural resources. The country boasts a vast pool of human capital, with highly trained professionals available at competitive costs. Investors can take advantage of numerous incentives across various sectors, making Nigeria a high-return investment market. Additionally, Nigeria’s investment environment is supported by robust financial institutions and government agencies, ensuring a conducive atmosphere for business growth.
Nigerian Investment Promotion Commission (NIPC)
The Nigerian Investment Promotion Commission (NIPC) is a federal agency tasked with coordinating, monitoring, and assisting with the establishment and operation of enterprises in Nigeria. Serving as the gateway to investment in Nigeria, the NIPC offers a window to the international investment world. The Commission collects, analyzes, and disseminates information on investment opportunities and sources of capital. It also advises on business partnerships and identifies specific projects in which potential investors can participate.The NIPC is responsible for registering companies that fall under the NIPC Act and facilitating interactions between investors and government ministries, departments, agencies, and financial institutions. It also manages the One-Stop Investment Centre (OSIC), which assists with company incorporation and registration matters. Visit www.nipc.gov.ng for more information.
One-Stop Investment Centre (OSIC)
Established in 2006 within the framework of the NIPC, the One-Stop Investment Centre (OSIC) facilitates investment in all sectors of Nigeria’s economy. It serves as a single portal for sourcing information and completing necessary formalities to obtain required approvals for business operations. OSIC consolidates the services provided by various government agencies involved in company registration and operational formalities, ensuring a coordinated and streamlined approach.Services Offered by OSIC:
- Providing information and data on Nigeria’s economy, including advisory services on investment opportunities.
- Granting business entry approvals, permits, and authorizations.
- Assisting with company incorporation and registration.
- Facilitating post-entry approvals, licenses, and other sector-specific permits.
- Assisting with tax registration and clearance.
- Helping with work permits, expatriate quotas, and other immigration formalities.
- Facilitating customs clearance for investment projects.
Business Incorporation and Registration: A Mandatory Requirement
- All businesses in Nigeria must be registered with the Corporate Affairs Commission (CAC) before commencing formal operations. Registration can take various forms, depending on the type of business:Private Limited Liability Company (Ltd)
- Public Limited Company (PLC)
- Unlimited Company
- Company Limited by Guarantee
- Subsidiary or Branch of a Foreign Company
- Partnership or Joint Venture
- Sole Proprietorship
- Incorporated Trustees (religious, charitable, philanthropic, or cultural)
- Representative Office (in special cases)
A minimum share capital of 10,000 Naira is required to set up a private company (Ltd), while a public company (PLC) requires a minimum share capital of 500,000 Naira. Additionally, a minimum subscription of 25% of the authorized capital is required at the point of incorporation.
Company Registration Process:
The company registration process in Nigeria has been streamlined and simplified through the OSIC to enhance efficiency and speed. Companies can now be registered in a matter of days. The main steps in the process are:
- Prepare the Memorandum and Articles of Association for the proposed company.
- Conduct a name availability search at the Corporate Affairs Commission (CAC) for the proposed company name. Once approved, purchase and complete the incorporation forms. The registration fee is 10,000 Naira.
- Submit the documents to the Federal Inland Revenue Service (FIRS) for payment of stamp duties and stamping.
- Submit the completed documents, along with the relevant permits, to the CAC for verification and final approval.
- Upon approval, the Certificate of Incorporation is issued, along with Certified True Copies of relevant documents. Post-registration processes are completed at the CAC Head Office.
Incorporating and Operating a Foreign Company
Foreign companies seeking to establish and operate in Nigeria must complete the required formalities for local incorporation of a Nigerian branch, subsidiary, or autonomous business entity. A local incorporation must be completed before any business activity begins. Investors may give power of attorney to a solicitor during the incorporation process. However, the solicitor’s role ceases upon completion of the registration formalities.After incorporation, the company must register with the NIPC before starting formal operations. It can also apply to the NIPC for other investment approvals, such as expatriate quotas and incentives like Pioneer Status.
Exemption from Incorporation:
Exemption from local incorporation may be granted under specific conditions in accordance with Section 56 of the Companies and Allied Matters Act. Applications for exemption must be addressed to the National Council of Ministers, through the Secretary to the Government of the Federation (SGF). Exemptions may apply to:- Foreign companies executing specific loan projects on behalf of donor countries or international organizations.
- Foreign government-owned companies engaged solely in export promotion activities.
- Engineering consultants and technical experts on specialist projects under contract with Nigerian governments or approved bodies.
Corporate Affairs Commission (CAC)
The Corporate Affairs Commission (CAC), established under the Companies and Allied Matters Act of 1990, is an autonomous body regulating the formation and management of companies in Nigeria. The CAC provides a wide range of services before, during, and after incorporation and registration of businesses.Functions and Services of CAC:
- Registration of business names and incorporation of companies.
- Registration of Incorporated Trustees.
- “Same Day Incorporation Services” for companies that meet certain conditions.
- Issuance of True Certified Copies of filed company documents.
- Registration of share capital increases, mortgages, etc.
- Processing statutory filings of annual returns, changes in the memorandum and articles, addresses, etc.
- Management and winding-up of companies.
The CAC has branches in all 36 states of Nigeria and is ISO 9001 accredited for its services. Visit www.cac.gov.ng for more information.
Representative Offices
Foreign companies may set up representative offices in Nigeria. However, such offices can only serve as promotional and liaison offices. Local expenses must be covered by the foreign company, and the representative office cannot engage in business activities, conclude contracts, or open/negotiate letters of credit.Legislation on Investment
Two principal laws govern investment in Nigeria, with a focus on foreign investment:- Nigerian Investment Promotion Act No. 16 of 1995
- Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No. 17 of 1995
The NIPC Act outlines the roles of the NIPC in coordinating, monitoring, and encouraging investment in Nigeria. Key highlights of these acts include:
- Foreigners may invest and participate in enterprises in Nigeria.
- Enterprises with foreign participation must be registered with the NIPC.
- Foreign enterprises can purchase shares in Nigerian enterprises in any convertible currency.
- Foreign investors in registered enterprises are guaranteed the unconditional transferability of funds through authorized dealers in any convertible currency.
Investment Protection:
Nigerian legislation provides strong assurances for investment protection, guarding against nationalization or expropriation without prompt and adequate compensation. Investors are also guaranteed access to the courts to determine their rights and compensation in the event of government acquisition for public purposes.
Investment Promotion and Protection Agreements
Countries interested in investing in Nigeria can enter into bilateral Investment Promotion and Protection Agreements (IPPAs) with the Nigerian government.Deregulation of Equity Structure in Nigerian Enterprises
The Nigerian Investment Promotion Commission (NIPC) Act No. 16 of 1995 has removed restrictions on foreign shareholding in enterprises registered in Nigeria. However, specific categories of businesses require authorization for foreign participation:Production of arms and ammunitionProduction and distribution of narcotics and psychotropic substances
Manufacture of military and paramilitary uniforms and equipment
Participation in coastal and inland shipping
Role of the Financial System
The Federal Ministry of Finance (FMF) and the Central Bank of Nigeria (CBN) are the main regulators of the Nigerian financial system. The system includes bank and non-bank institutions. Other regulatory bodies are the Nigerian Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM), Federal Mortgage Bank of Nigeria (FMBN), and the National Board for Community Banks.
Federal Ministry of Finance
The FMF is the central regulatory authority of the Nigerian financial system. It advises the government on fiscal policies, monetary matters, and overall financial management in conjunction with the CBN. WebsiteCentral Bank of Nigeria
The Central Bank of Nigeria (CBN), established in 1958, is the apex regulatory authority of the financial system. It promotes monetary stability and a sound financial system, regulates the banking sector, and licenses banks and financial companies. WebsiteNigerian Deposit Insurance Corporation
The Nigerian Deposit Insurance Corporation (NDIC) provides deposit insurance to banks, promotes confidence in the banking industry, and examines the books of insured banks and financial institutions. It guarantees a certain amount to depositors in case of bank failure and complements the regulatory role of the CBN.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) is the main regulator of the capital market. It ensures market efficiency, enforces discipline, and approves mergers and acquisitions.National Insurance Commission
The National Insurance Commission (NAICOM) supervises and regulates the insurance business in Nigeria. It protects policyholders and addresses complaints against insurance companies.
The Money Market
The Money Market facilitates raising short-term funds from surplus sectors to deficit sectors, including public and private entities. The market’s scope has expanded with the introduction of the Open Market by the CBN, and participants now include Discount Houses, Commercial Banks, and Micro-Finance Banks.Discount Houses
Discount Houses are non-bank financial institutions that mobilize funds for investment in securities. They serve as intermediaries between the CBN, licensed banks, and other financial institutions. Some Discount Houses currently in operation are First Securities Discount House Ltd, Express Discount House Ltd, Associated Discount House Ltd, Kakawa Discount House Ltd, and Consolidated Discount House Ltd.Debt Management Office
The Debt Management Office (DMO) is an autonomous body that manages Nigeria’s debt. It centralizes debt management functions such as debt recording, debt service forecasts, debt negotiations, and borrowings. WebsiteFederal Inland Revenue Service
The Federal Inland Revenue Service (FIRS) handles all tax-related matters in Nigeria, including tax registration, collection, and issuance of tax clearance certificates.
Bank of Agriculture
The Bank of Agriculture (BOA), formerly known as the Nigerian Agricultural Cooperative and Rural Development Bank, was established in 2010. It is owned by the Federal Government (FMF 60% and CBN 40%). The BOA offers three loan schemes:Smallholder Loan Scheme: A subsidized credit scheme for small-scale farmers and enterprises.Large-scale or Investment Loan Scheme: For medium and large-scale enterprises, requiring an investment appraisal by the borrower.
On-lending Scheme: Wholesale credit provision to other lending agents such as cooperatives and government institutions.
Bank of Industry
The Bank of Industry (BOI), formed in 2001 from the restructuring of the Nigerian Industrial Development Bank, provides financial assistance for the establishment, expansion, diversification, and rehabilitation of industrial projects.Business Ethics, Conduct, and Product Control
Several institutions oversee business ethics, conduct, and product quality standards in Nigeria, including the Standards Organisation of Nigeria, National Agency for Food and Drug Administration and Control (NAFDAC), Economic and Financial Crimes Commission (EFCC), and Independent Corrupt Practices and Other Related Offences Commission (ICPC).Standards Organisation of Nigeria
The Standards Organisation of Nigeria (SON) enforces standards and quality control of products, metrology, and certification throughout Nigeria. It operates the Mandatory Conformity Assessment Programme (SONCAP) to ensure imported products comply with standards before shipment. WebsiteNational Agency for Food and Drug Administration and Control
The National Agency for Food and Drug Administration and Control (NAFDAC) ensures that food, drinks, and drugs in Nigeria meet quality standards and are safe for consumption. Products must be registered with NAFDAC, and registration numbers are displayed on packaging. NAFDAC also controls the import and export of narcotics and other controlled substances.
Nigerian Content Development and Monitoring Board
The Nigerian Content Development and Monitoring Board (NCDMB) was established in 2010 to enforce the Nigerian Content Policy. It aims to increase local participation in the oil and gas industry, build local capacities, create linkages to other sectors, and boost the industry’s contribution to GDP.Nigerian Drug Law Enforcement Agency
The Nigerian Drug Law Enforcement Agency (NDLEA), established in 1990, is responsible for eliminating the production, trafficking, and use of hard drugs. It aligns Nigerian drug policies with international conventions and combats money laundering related to drug trafficking.
Economic and Financial Crimes Commission and Independent Corrupt Practices Commission
The Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) are key agencies in the fight against corruption in Nigeria. The EFCC focuses on financial crimes like money laundering and fraud, while the ICPC handles corruption involving public officials.Stay Connected
For partnerships, event participation, or to learn more about the Made in Nigeria Project Office, visit:
🌐 www.madeinnigeriang.org
📩 Or send an email to madeinnigeriaapplication@gmail.com
Follow the movement:
Facebook: Made in Nigeria Project
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LinkedIn: https://www.linkedin.com/in/madeinnigeria-projects-44719632a/
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The "Made in Nigeria" Project Office in Abuja is led by George Buchi Nwabueze, who serves as the National Coordinator. The project operates under the International Organizations Department within the Office of the Secretary to the Government of the Federation (OSGF).
ReplyDeleteThe "Made in Nigeria" project aims to promote locally produced goods and services, fostering national economic growth by encouraging Nigerians to support and take pride in Nigerian-made products.
Key points about the project:
Focus:
The project focuses on promoting locally made goods, supporting entrepreneurs, ensuring standardization and quality control, and facilitating product registration.
Leadership:
George Buchi Nwabueze leads the project as the National Coordinator.
Location:
The project office is situated in Abuja, under the International Organizations Department within the OSGF.
Objectives:
The initiative aims to stimulate economic self-reliance, create jobs, and diversify the Nigerian economy.
Formalization:
The project was formalized under the leadership of Ambassador Chike Alex Anigbo (MNI) and approved by the Federal Executive Council (FEC) in 2017, according to LinkedIn.
Public-Private Partnership:
The project was initially run as a public-private partnership with Trade Nigeria
"Made in Nigeria" refers to products and services that are produced or offered within Nigeria. It's both a campaign and a movement aimed at boosting the Nigerian economy by promoting local production and consumption of goods and services. This initiative encourages Nigerians to prioritize locally made items over imported ones, fostering economic growth and self-sufficiency.
ReplyDeleteKey Aspects of the "Made in Nigeria" Movement:
Economic Growth:
The initiative aims to stimulate economic growth by creating jobs, increasing local production, and reducing reliance on imports.
Boosting Local Businesses:
"Made in Nigeria" promotes the visibility and patronage of Nigerian businesses and entrepreneurs, encouraging them to expand their reach and impact.
Shifting Consumer Behavior:
The movement encourages a change in consumer preferences, urging Nigerians to choose locally made products and services over foreign alternatives.
Showcasing Nigerian Talent:
It highlights the creativity and innovation of Nigerian developers, artisans, and entrepreneurs, demonstrating the country's potential on a global stage.
National Pride:
"Made in Nigeria" is also a source of national pride, celebrating the unique identity and capabilities of Nigeria.
Challenges and Opportunities:
Perception of Quality:
One of the challenges is the perception that imported goods are of higher quality, which can hinder the adoption of local products.
Affordability:
Some locally produced goods, like rice, can be more expensive than their imported counterparts, impacting accessibility.
Standardization and Promotion:
There's a need for effective standardization and promotion of Made-in-Nigeria products to improve patronage both domestically and internationally.
Innovation and Collaboration:
Encouraging collaboration between businesses, government, and other stakeholders is crucial for driving innovation and growth within the "Made in Nigeria" movement.
Examples:
Nollywood:
Nigeria's film industry, also known as Nollywood, is a prime example of a thriving "Made in Nigeria" sector, contributing significantly to the economy and global entertainment.
Innoson Motors:
Innoson Motors is a Nigerian automobile manufacturer that produces vehicles locally.
Nord Automobile:
Another example of a Nigerian car manufacturer.
Various SMEs:
Many small and medium-sized enterprises (SMEs) across different sectors are also contributing to the "Made in Nigeria" movement.
In essence, "Made in Nigeria" is a multifaceted movement aimed at fostering economic development, national pride, and innovation within Nigeria through the promotion and adoption of locally produced goods and services
The Made in Nigeria Project Office in Abuja is a government initiative focused on promoting locally manufactured goods and services. It operates under the Office of the Secretary to the Government of the Federation (OSGF) and is led by the National Coordinator, George Buchi Nwabueze. The office's core mission is to foster economic growth, job creation, and diversification by encouraging the consumption of Nigerian-made products and supporting local businesses, particularly SMEs.
ReplyDeleteHere's a more detailed breakdown:
Key Aspects:
Government Initiative:
It's a government-led project designed to boost the Nigerian economy by promoting locally produced goods.
Focus on Local Content:
The project emphasizes the importance of supporting Nigerian businesses and entrepreneurs by encouraging the consumption of their products.
Under the OSGF:
The project office is located within the International Organisation Department of the Office of the Secretary to the Government of the Federation.
National Coordinator:
George Buchi Nwabueze serves as the National Coordinator, leading the project.
Promoting Economic Growth:
The project aims to drive economic growth by fostering innovation, entrepreneurship, and brand development for locally made products.
Events and Expos:
The Made in Nigeria Project Office organizes events like the Abuja Expo to showcase Nigerian products and facilitate networking opportunities for businesses.
Contact Us – Nigeria
In essence, the Made in Nigeria Project Office is a key driver in the government's efforts to promote local production, entrepreneurship, and ultimately, national economic development