the biggest economy in africa (taking nigeria beyond oil) · 2016. 6. 2. · nigerian investment...

A PRESENTATION

BY

LADI HAUWA KATAGUM

EXECUTIVE SECRETARY/CEO (Ag.)

NIGERIAN INVESTMENT PROMOTION COMMISSION

Cell/Mobile No: +234-8033110156

Email: [email protected] [email protected]

Website: www.nipc.gov.ng

at the 2nd African Investment Promotion Forum, Tokyo, Japan

on March 3rd, 2016

THE BIGGEST ECONOMY IN AFRICA (Taking Nigeria Beyond Oil)

mailto:[email protected]



http://www.nipc.gov.ng/

http://images.google.com/imgres?imgurl=http://images.vector-images.com/116/nigeria_coa_n4013.gif&imgrefurl=http://vector-images.com/image.php?epsid=4013&h=177&w=200&sz=15&tbnid=i3qfgDrBsQucMM:&tbnh=87&tbnw=99&hl=en&start=4&prev=/images?q=nigeria+coat

Presentation Outline

Nigerian Investment Promotion Commission

1. Where is Nigeria located?

2. Overview of Economic & Investment Environment

- Snap shot of Economic Environment

- Investment Environment

- Current Challenges

- Global Prospects

- FDI Hotspot in Africa

- Analysis of FDI inflow into Nigeria

3. Success Stories

- Investment Trends

- Investment Pipeline


Nigerian Investment Promotion

Commission

4. Why Nigeria?

- Strong Demographics

- Basic National Investment Legislation

5. Investment Opportunities

(Infrastructure Development Projects)

6. Investment Incentives

7. Conclusion

Presentation Outline (CONT’D)

Where is Nigeria Located?

Located in West Africa

Occupies 923,768 square kilometers of

land

Rich diverse culture with more than 250

ethnic groups

36 states with Abuja as the federal Capital

Territory

Third tier of government consists of 774

local government areas

Official language is English

Time zone is GMT +1

AFRICA




Commission 5

Nominal GDP $568.5 Billion (2014)

Economy now the biggest in Africa

GDP growth rate 6.22% (2014)

GDP projections for 2015 at about 6%

(IMF projects 7.3%)

GDP per Capital $2950 US Dollar (2014)

FDI Inflow $4.7 Billion (2014)

External Reserve $31.89 Billion (June, 2015)

Inflation Rate 9% (May 2015)

MPR 13% (June 2015)

Unemployment Rate 7.5% (2014)

Debt Stock $69.61 Billion (March, 2015)

Domestic: $60.09 billion, External:$9.52 billion

Debt to GDP ratio 11.17%

Overview of the Economic & Investment

Environment



Commission

Nigeria’s Investment

Environment

7. Political & economic stability with sound

macro-economic management

6. Competitive sectors/industries

4. Rule of Law anchored on good governance, transparency, accountability and zero tolerance for corruption

5. Trainable, resourceful and cost effective workforce with 60% as youths

3.. Very strong financial system

2. Policy Environment Supportive of Private Entrepreneurship

1. Abundant natural

resources

N I G E R I A T O D A Y I S O N E O F T H E M O S T A T T R A C T I V E A N D P R O M I S I N G

E M E R G I N G M A R K E T S G L O B A L L Y , M A I N L Y B E C A U S E O F I T ’ S …


Commission

Measures by Government to Address the Current

Challenges of the Investment Environment I. Corruption:

This is the main selling point of the present government as it has set in motion various measures to recover looted fund from the government treasury, as well as, ensure the prosecution of the offenders by the law court.

The anti-graft war will make for more accountability and commitment to government’s social charter

Government has demonstrated a strong will to fight corruption, and the crackdown on corruption will continue to be vigorously undertaken.

II. Insecurity:

On insecurity in the country, one area in which Nigerians, especially those

in the Northeast, have already begun to experience major ‘Change’ is in

the war on terror. (Boko Haram).

The Armed Forces have significantly curtailed the insurgency which has

ravaged the Northeast of Nigeria over the past few years.

Government will maintain, consolidate and build on their successes in the

war against Boko Haram / violent extremism, kidnapping, etc.


Commission 8

Measures by Government to Address the Challenges

(cont’d) III. Foreign Exchange Issue:

Government recognize the private sector as the engine of growth and a veritable partner in its Economic Agenda, and will therefore give the fullest possible support to foreign and domestic investors.

The current policy on foreign exchange is temporary measures put in place by the Central Bank of Nigeria (CBN) to achieve a stable exchange rate regime and ensure more flexibility for sustainable inclusive economic growth in the medium to long term.

The Bank is fine tuning the framework for foreign exchange management with a view to ensuring a more effective and liquid foreign exchange market, taking into account Nigeria’s strategic development priorities.

IV. Infrastructure Rehabilitation and Expansion:

Roads, Rail, Water, Aviation, etc

Power:

Government recently handed over 6 Generation companies (GENCOs), & 11 Distribution companies (DISCOs) to private sectors in its bid to revamp the power sector.

Nigerian Ports Reforms/Concessioning, & private sector participation.


Commission

9

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nigeria south africa egypt angola ghana

Snapshot of the Economy

Nigeria’s economy is expected to grow steadily at about 6% over the

next five years

Nigeria, Africa’s biggest Economy

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2012 2013 2014

Nigeia

Ghana

Congo

South Africa

Egypt

Mozambique



Commission 10

Nigeria, Global Investors’ Delight

Global Prospects

Source: Wall Street Journal Frontier Market Index



Commission 11

Analysis of FDI inflow into Nigeria

US$10.94 Billion

US$3.74 Billion

US$0.95Billlion

US$0.81Billion

US$0.59Billion

US$0.55Billion

US$0.49Billion

US$0.34Billion

US$0.32Billion

US$0.29Billion

United Kingdom

United States of America

Belgium

Saudi Arabia

Qatar

Netherlands

Mauritius

Egypt

United Arab Emirates

Republic of South Africa



Commission 12

Success Stories: Investment Trends in Nigeria



Commission 13

• 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

– Compensation

– Alternative Dispute Resolution

– Free transfer of profits

• 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

Basic National Investment Legislation-



Commission 14

Nigeria: Investment Pipeline

Cement, Petrochemicals Fertilizers, Power

$16 Billion

$1.3 Billion in flour Manufacture of Flour, Sugar

$1.2 Billion in petrochemicals, fertilizers Petrochemicals, Fertilizers

$1.2 Billion in logistics, storage Logistics, Storage

$1 Billion in industrial manufacturing Industrial Manufacturing

$1 Billion in mining, oil & gas Mining , Oil & gas

Consumer Goods $250 Million in consumer goods

Cement $625 Million in cement



Commission 15

Why Nigeria? – Strong Demographics

-Large Market and Strong Work Force

Nigeria has a population of over 170 million people (x3 of South Africa) 7th highest populated country in the world with an average age of 18.6 years

By 2050 Nigeria will be the sixth highest populated country in the world

By 2070 Nigeria will have the 3rd highest population in the world after India and China (and above USA)

A growing middle income class which currently stands at 23% of the population

The population provides a ready market for Consumer Goods, Telecommunications, IT, Agriculture, Hospitality &

Entertainment, Automobile, Construction & Housing


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Why Nigeria? . . . Cont’d

Abundant Resources: Enormous resources, yet

to be fully exploited. which include 7 Strategic

minerals (Gold, Bitumen, Limestone, Barytes,

Lead, Zinc, Iron Ore), vast arable lands, and

agricultural products (cassava, cocoa, cotton,

palm oil, gum arabic, etc.).

Large Market: 7th most populous country in the

world with 170 million people which also

stretches into the growing West African sub-

region of over 350 million people.

Access to Finance: Well developed banking

and financial sector. made up of 22 deposit

money banks, 5 discount houses, over 700

microfinance banks, 101 primary mortgage

banks, 108 finance companies, 1,621 bureaux de

change operators and 5 development finance

institutions. Sufficient access to working

capital and other credit facilities.

Attractive Incentives: A comprehensive

package of incentives (e.g. 3-5years tax holiday

for pioneer activities) put in place to encourage

investment.

Free Market Economy: All Investors are allowed

100% ownership of investment in any sector (except

ones listed on the ‘negative list’) irrespective of

nationality. No nationalization or expropriation of

businesses by government of the federation.

Free Flow of Investment: Exchange control

regulations have been liberalized to ensure free

flow of international finance. Guarantee of

unconditional transferability/repatriation of profit

and dividends net taxes through an authorized

dealer, in freely convertible currency .

Robust Private Sector: Dynamic private sector,

which has assured greater responsibilities under

the new economic environment –privatization of

government owned enterprises. Presently, Return

on Investment (RoI) ranges from 35% - 45%

making it one of the most profitable investment

destinations in the world.

Skilled and Low Cost Labour: Abundance of

skilled labour at an economic cost, resulting in low

production costs, among the lowest in Africa.



Some Infrastructure Development Projects 4th Mainland Bridge Lagos, Nigeria

Port Harcourt Monorail Project Lagos Badagry Rail

Project

Enugu Monorail Lekki-Ikoyi Cable Stayed

Link Bridge

https://youtu.be/oxsBUxDTVV

o

State of the art Healthcare in Nigeria Specialist 1000 bed Hospital Port Harcourt

http://nidf.blogspot.com/2013/07/port-harcourt-monorail-project.html

http://nidf.blogspot.com/2011/11/enugu-monorail.html

http://nidf.blogspot.com/2011/02/lekki-ikoyi-cable-stayed-link-bridge.html




http://www.skyscrapercity.com/archive/index.php/t-763788.html


Commission 18

Investment Opportunities

Areas of Competitive and Comparative Advantage

Agribusiness

and Agro-Industries

Solid Mineral

Processing and

Related Industries

Downstream Oil,

Industries, Petrochemicals and

Oil and Gas Services

Agriculture Mining Oil and Gas

Food processing

Sugar

Textiles and Garments

Leather and Leather

Products

Palm oil refinery

Iron and Steel Development

Aluminium

White products

Electronics (Tantalum)

Refineries

Petrochemicals

Pharmaceuticals

Gas transmission and Processing

Fertilizer Production Cement

Automobile



Commission 19

Power

Infrastructure

Rail, Roads, Aviation and Ports

Real Estates Development

Banking, Finance and Insurance

Healthcare and

Pharmaceuticals

Maritime and Shipping

Information and

Communication Technology

Free Trade Zones

Industrial Parks and Clusters

National Rail Network

Greenfield and Brownfield Airport Projects, Airline operation

Expressways, Toll roads and bridges

Development of New ports and refurbishment of

existing ports

Gas/Hydro/Coal Production

Power feedstock: Gas supply, coal supply

Expansion of Transmission network

Renewable Energy

Commercial Housing

Real Estate Investment Trust Schemes

Housing Infrastructure Development

Roofing sheets, woodwork, fittings and Paint

Industry

Entertainment

Other Key Investment Areas

Investment Opportunities . . . Cont’d



Commission 20

Investment Incentives

STATUTORY INCENTIVES:

Pioneer Status – 3- 5 years Tax Holiday

Repatriation of Profit (100%)

Capital Allowances:

• Research & Development - 140% of expenses incurred

• Investment in infrastructure 20% of costs incurred

• Minimum local raw materials utilization – 20% for 5 years

Very low Value Added Tax (VAT) regime of 5%

EXPORT INCENTIVES

Export Expansion Grant – up to 30% of Value.

FREE TRADE ZONES: e.g. Calabar Free Trade Zone, Onne Oil & Gas Free Trade Zone, Lekki Free Trade Zone, and others.

Sugar Production

• Machinery and Spare Parts for local sugar

manufacturing industries attracts 0% duty

• Sugar Cane to sugar value chain investors enjoy five

(5) years tax holiday:

Raw sugar attracts import duty rate of 10%

plus a levy of 50% while refined sugar

attracts import duty rate of 20% plus a levy

of 60%

Solid Minerals /Mining - Machinery and

Equipment imported for the development of the solid

minerals sector attracts import duty rate of 0% and

0% import VAT

Agriculture/ Agro -allied

• Tax Relief on Interest Income

• Machinery and equipment attract zero

percent (0%) duty

Power Generation and Distribution - Equipment and machinery attract zero percent (0%)

duty

SPECIAL FISCAL INCENTIVES

Aviation Sector – Commercial aircrafts and aircraft

spare parts imported for use in Nigeria attract import

duty rate of 0% and 0% import VAT


21

The NIPC

Nigerian Investment Promotion Commission (NIPC) as the

Federal Government Agency established by Act No. 16 of 1995 to

encourage, promote, and co-ordinate all Investments in the Nigerian

Economy.

NIPC’s general responsibilities are (but not limited to) to:

₋ co-ordinate and monitor all investment promotion activities in the

Nigerian Economy

₋ Promote investments in and outside Nigeria through effective

promotional means

₋ support and provide necessary assistance and guidance to foreign

and domestic investors in Nigeria



Commission 22

– develop and implement innovative, focused and effective Investment

promotion strategies

– Act as, and maintain liaison between Investors and Ministries,

Departments Agencies and institutions concerned with investments

– advise government on policy matters

• fiscal and non-fiscal measures designed to promote

industrialization or the general development of the economy.

The NIPC


Conclusion

With the economy being the largest in Africa, and consistently among the

top three investment destinations on the continent, Nigeria has been

confirmed as one the most-watched frontier market by American and

European companies, as indicated in the latest Wall Street Journal (WSJ)

Frontiers/FSG Frontier Market Sentiment Index (2014 & 2015).

As the country offers one of the most rewarding investment destinations,

not just in Africa but, in the World, it is time to invest in this profitable

economy.

The NIPC is ever positioned to give a hand-holding support to investors

that have decided to make Nigeria their preferred investment destination.



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the biggest economy in africa (taking nigeria beyond oil) · 2016. 6. 2. · nigerian investment...

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