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Copyright © 2005 Nigeria Properties Network
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Business Opportunities
Investment Profile in Nigeria
PRINCIPAL LAWS ON FOREIGN INVESTMENT: The principal laws regulating foreign investments are, the Nigeria Investment Promotion Commission Decree No. 16 of 1995 and the Foreign Exchange (Monitoring and Miscellaneous Provisions) decree No. 17 of 1995.
DE-REGULATION OF EQUITY STRUCTURE IN NIGERIA ENTERPRISES: Effectively, the Nigerian Enterprises promotion (Repeal) Decree No.7 of 1995 has abolished any restrictions, in respect of the limits of foreign shareholding, in Nigeria registered/domiciled enterprises. The only enterprises that are still exempted from free and unrestricted foreign participation are those involved in:
- Production of arms, ammunition, etc
- Production of and dealing in narcotic drugs and psychotropic substances
THE NIGERIA INVESTMENT PROMOTION COMMISSION DECREE NO.16, ("NIPC DECREE"): This decree established the Nigerian Investment Promotion Commission ("NIPC") as the successor to Industrial Development Coordination Committee (IDCC).
Functions and Powers
The Nigeria Investment Promotion Commission (NIPC) is an Agency of the Federal Government with perpetual succession and a common seal, which is specially established, among other things, to:
- Co-ordinates, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria.
- Initiate and support measures, which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors.
- Promote investments in and outside Nigeria through effective promotional means.
- Collect, collate, analyze and disseminate information about investment opportunities and sources of investment capital and advise on request, the availability, chance or suitability of partners in joint-venture projects.
- Register and keep records of all enterprises to which the NIPC Decree legislation applies.
- Identify specific projects and invite interested investors for participation in those projects.
- Initiate, organize and participate in promotional activities such as exhibitions, conferences and seminars for the stimu-lation of investors.
- Maintain liaison between investor and Ministries, government department and agencies, institutional lenders and other authorities concerned with investments.
- Provide and disseminate up-to-date information on incentives available to investors.
- Assist incoming and existing investors by providing support services.
- Evaluate the impart of the Commission in investment in Nigeria and recommend appropriate remedies and additional incentives.
- Advise the Federal Government on policy matters, including fiscal measures designed to promote the industrialization of Nigeria or the general development of the economy.
- perform, such other functions as are supple mentary or incidental to the attainment of the objectives of NIPC Decree.
Provision Relating to Investment
Notable amongst the provisions relating to investments are the following:
- A non-Nigeria may invest and participate in the operation of any enterprises in Nigeria
- An enterprises in which foreign partici-pation is permitted, shall after its incorporation or registration, be registered with the NIPC.
- Foreign enterprises may buy the shares of any Nigerian enterprises in any convertible foreign currency.
A foreign investor in an approved enterprise is guaranteed unconditional transferability of funds through an authorized dealer, in freely convertible currency of:
- Dividends or profit (net of taxes) attributable to the investment.
- Payments in respect of loan servicing where a foreign loan has been obtained.
- The remittance of proceeds (net of all taxes) and other obligations in the events of sale or liquidation of the enterprises or any interest attributable to the investment.
Priority Areas of Investment
The NIPC issues guidelines and procedures, which specify priority areas of investment and prescribed incentives and benefits which are in conformity with government policy.
Incentives for Special Investment
For the purpose of promoting identified strategic or major investment, the NIPC may in consultation with appropriate Government agencies negotiate specific incentive packages for the promotion of investment.INVESTMENT PROTECTION ASSURANCE:
The NIPC Decree provides that:1. No enterprises shall be nationalized or expropriated by any Government of the Federation; and
2. No person who owns, whether wholly or in part, the capital of any enterprises shall be compelled by law to surrender his interest in capital to any other persons.
There will be no acquisition of enterprises by the Federal Government unless the acquisition is in the national interest or for a public purpose under a law which makes provision for:
1. Payment of fair and adequate compensation; and
2. A right of access to the courts for the determination of the investor's interest of right and the amount of compensation to which he is entitled.
Compensation shall be paid without undue delay, and authorization given for its repatriation in convertible currency where applicable.
Apart from the investment guarantee assurance of the NIPC Decree, countries are welcome to execute and enter into bilateral Investment Promotion and Protection Agreements ("IPP") with the Nigerian government.PRIVATISATION POLICY: The Federal and State governments has endeavored to play an active catalytic role in the economy by initiating and acting as sizeable stakeholders in a number of core industries. The 1997 Budget announced that all laws that inhibit competition in certain sectors of the Nigerian economy would be repealed. Accordingly, with effect from 1998, private sector investors are now free to join or compete with government-owned public utility corporations.
The Public Enterprises Promotion and Commercialization Act, is being prepared to authorize the partial privatization of government enterprises in the following sectors:
- Telecommunications.
- Electricity ( Generation and Distribution).
- Petroleum Refining.
- Coal Bitumen Production (mining, Processing and Export).
- Tourism generation (Tour and Travel, Hospitality, etc).
Within the context of the liberation policy, both foreigners and nationals are to participate and invest in the privatization of the public enterprises.
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