ECONOMY

Major steps had been taken to reform both the investment environment and the act of doing business in the economy. Government is implementing a strategic shift of the economy from over-dependence on the capital intensive oil sector and the Agricultural sector is being rapidly empowered to engineer a swift shift to mechanical farming capable of sustaining export and local consumption. Government has shown great commitment to the implementation of a market-oriented economy and the private sector is being empowered to lead in the running of the economy. Read more at: Nigeria’s Federal Ministry of Finance

FINANCIAL SYSTEM

All monopoly sectors have been totally deregulated to allow for private investment. The Banking sector has been recapitalized creating modern and big institutions capable of sustaining long time investment. The Nigerian financial system has undergone some remarkable changes in recent times. Three Nigerian Banks, namely, First bank of Nigeria Plc, United Bank of Africa (UBA), and Intercontinental Bank Plc, made the Forbes list of 2000 world biggest companies. The three banks in Nigeria that made the 2009 list had emerged as industry leaders consistently since after the banking industry consolidation reforms introduced by the Central Bank of Nigeria (CBN) in 2004. Read more: CBN

NIGERIAN GDP INCIDATOR

Key Economic Indicators of Nigeria:

GDP of US$338.1 billion (2008 est),
GDP Real Growth Rate of 6.1%,
Labour Force by Occupation – Agriculture – 70%,
Industry – 10%,
Services – 20%,
Nigeria’s proven Oil Reserves: 36.22 billion barrels,
Nigeria’s proven Natural Gas Reserves: 5.21 trillion cubic metres.

Further reading: National Bureau of Statistics (NBS)

PRIVATE SECTOR

With effect from 1998, private sector investors can freely join or compete with government-owned utility corporations. The Public Enterprises Promotion and Commercialization Act, authorizes the partial privatization of government enterprises in the following sectors – telecommunications, electricity (generation, transmission and distribution); petroleum refining; coal and bitumen production (mining, processing and export); and tourism generation (tour and travels and hospitality). Within the context of the liberalization policy, both foreigners and nationals are free to participate and invest in the privatization of the public enterprises. See more at: Nigerian Investment Promotion Commission (NIPC)

BUSINESS OPPORTUNITIES IN NIGERIA

Opportunities and potentials that exist in Nigeria include investment in processing of agricultural products and storage facilities; investment in processing of agricultural input supply and distribution; agricultural mechanization e.g. adoption and use of farm equipment, including the provision of land clearing and land preparation services; agro-allied industries, livestock ranching; development of earth dams and construction of tubes wells; and development and fabrication of appropriate small-scale and mechanized technologies for both on-farm processing (e.g. threshing) and secondary processing of agricultural produce for consumption or storage; construction of small hydro power plants, solar energy development, cables and wire manufacturing, electrical metres and switches, transformers, etc.

There are tremendous opportunities in the Mining and Mineral Extraction (non-oil) sector. Outstanding among these are coal, gypsum, barites, kaolin, talc, diatomite, lignite, columbite, iron ore and tin. Nigeria has one of the best quality coal deposits in the world with the lowest sulphur content.

The Electric power in the country – Nigeria has 6,000MV of installed generating capacity, which is grossly inadequate. The country has proven gas reserves and around 8,000MV of hydro development has been planned. Nigeria has plans to increase access to electricity throughout the country to at least 85% by 2010. This would call for new power plants, new transmission lines, as well as distribution facilities. The Nigerian Electricity power sector is being reformed to attract investment, improve efficiency and encourage private sector participation. There was already an element of private participation in the operations of the electricity sector, such as the Independent Power Projects (IPP). The National Power Holding Company will be unbundled into 18 firms comprising generation, transmission and distribution companies, which will be privatized or given on concession as the case may be. Further reading: Corporate Affairs Commission, Nigeria

GOVERNMENT PRIVATE SECTOR INITIATIVES

The Government Policy thrust in revitalizing, modernizing the infrastructures through Public-Private Sector partnership. Government is seeking greater involvement of the private sector in management and financing of mass housing schemes and transportation infrastructure – air, railway, roads, ports and inland waterways. Foreign companies can invest in numerous projects in Nigeria.

The Nigerian Federal Government also encourages the private sector participation in Nigeria through the legal framework of:

Build-Own-Operate (BOO);
Build-Operate-Transfer (BOT);
Build- Transfer-Operate (BTO);
Rehabilitate-Operate-Transfer (ROT);

INVESTMENT INITIATIVES

The Nigeria Government has put in place a number of investment incentives for the stimulation of private sector investment from within and outside the country. The nature and application of these incentives have been considerably simplified.

In order to ensure foreign companies of transparency, open, fair and just engagement of all relevant stakeholders for all enterprises, including labour and environmental issues. There are guarantees of investment from the World Bank, multi-lateral investment guarantee agency and overseas private investment corporation. There is political will and commitment at the highest level of government to attract foreign investors into Nigeria.