BUSINESS AND INVESTMENT ENVIRONMENT IN
NIGERIAUNIDO-ITPO AND NIPC ONLINE DELEGATE PROGRAMME 2020

Mohammed Baba
Deputy Director, Investor Relations
Virtual Meeting| September 2020

Nigeria in the global
context

How the world will look in 2050
Most populous countries
China

China

India

India

India

China

USAUSA

RussiaIndonesia

USAJapanBrazilIndonesia

Germany

Pakistan

PakistanIndonesia

7Nigeria

3190.9m

Nigeria

BrazilBrazilBangladesh

Bangladesh

BritainRussiaCongo DR

Italy

MexicoEthiopia

FranceJapan

MexicoBangladesh

Ethiopia

Egypt1950

20172050
ForecastSource: United Nations World Population Prospects: the 2017 Revision, medium variants

3410.6m

What investors tellus

Africa’s perceived barriers to investment…

Business environment ismost important barrier…

… incentives are least
important barrier

Source: EY’s 2015 Africa Attractiveness Survey

5

Nigeria’s businessenvironment
improvement efforts

Improved ease of doing business ranking: Nigeria (131/190)
Nigeria’s ease of doing business ranking improved by 15 steps and 4.01 points… positive national doing
business score …

DB YearRank2020
2019

Difference*DTF

Difference

131/ 190+15

56.9+4.01

146/ 190-152.89+1.37

2020 DB Ranking
Rank

Difference

Starting a business

105/ 190+5

Dealing with construction
permits

55/ 190+94

Getting electricity

169/ 190+2

Registering property

183/ 190+1

Getting credit

15/ 190-3

Protecting minority investors

28/ 190+10

Paying taxes

159/ 190-2

Trading across borders

179/ 190+3

2018

145/ 190+24

51.52+6.89

2017169/ 190+144.63-0.06

Enforcing contracts

73/ 190+20

2016

170/ 189

044.69+1.14

Resolving insolvency

148/ 190+1Source: World Bank, Doing Business 20207

* The distance to frontier (DTF) score measures the distance of each economy to the “frontier”,
which represents the best performance observed on each of the indicators across all economies

Subnational reforms equally important
SokotoKatsina
Kebbi… positive subnational
doing business scores

JigawaYobe

Zamfara

Borno

Kano
BauchiKaduna

Gombe

Niger
Adamawa

Plateau
FCT

Kwara

Nassarawa

Oyo

TarabaOsun Ekiti

Edo

Enugu

Lagos

Ondo
Anambra

Ogun

Kogi

Benue
Ebonyi

CrossImo Abia RiverAkwa
BayelsaRivers
Ibom
Delta

In the past 4 years, 29 Nigerian states implemented43 reforms across the four areas benchmarked.
Kaduna, Enugu, Abia, Lagos and Anambra showed thelargest advance toward the global good practice frontier

Source: World Bank, Doing Business in Nigeria 20188Why Nigeria

Despite the challenges, there are very many reasons to invest in Nigeria…

₦Large growing
population

Sophisticated financialmarkets

Improving businessclimateStrategic location

Generous investor
protections

Abundant naturalresources

Large tech-savvy population

Young, energetic,
entrepreneurial population

Generous investment
incentives

Growing middle classResilient, hard-working“can-do” spirit

An essential component ofevery Africa strategy

Optimistic mobile population

Large population ofconsumers

Strategic time zone
GMT +1

14th
Fast growth
projections

Abundant economic
opportunities

3rd most populous
country by 2050

Largest economy
by 2050

Language:
EnglishPrivate sector-led
economyTwo decades of politicalstability

Huge unfilled demandHome to many large local
and international brands

Favourable weather

10

Ideal gateway economy for leveraging AfCFTA
Nigeria iseconomies

3’05’ Tunis

thanmostAfrican

2.Expanded market for Nigerian goods andservices, creating jobs and economic growth

ECOWAS

3.Nigeria’s manufacturing value addition is morethan 7x the average of the top 20 economies inAfrica

5’20” Addis Abba

4.Effective trade remedies will allow action against
injurious practices by foreign countries andcompanies▪ 4 International airports andmajor seaports in Lagos,
Calabar and Bonny island▪ 3,798 km of railway tracks
and 168,000 km roadnetwork▪ Land borders with Benin,
Cameroon, Chad and Niger
and a natural hub for thecontinent

ready1.Large domestic market makes Nigeria the ideal
gateway economy

5’45” Cairo

5’ Dakarmore

5.Many Nigerian companies, particularly in theservices sector, have long developed the capacity
to serve the rest of Africa
5’40” Johannesburg

6.Complements Nigeria’s national development
agenda and can catalyse economic diversification11

Selected Nigerian companies and their networks in Africa
African operations

Company

SectorUBA

Services (Banking)20

Benin, Burkina Faso, Cameroun, Chad, Cote d’Ivoire,
Congo Brazzaville, Gabon, Ghana, Guinea Conakry, Kenya,Liberia, Mali, Mozambique, Nigeria, RDC, Senegal, Sierra
Leone, Tanzania, Uganda, Zambia

Dangote Group

Manufacturing (Industrial,Food & Beverages)

12Cameroun, Cote D’Ivoire, Congo, Ethiopia, Ghana, Liberia,Nigeria, Senegal, Sierra Leone, South Africa, Tanzania,Zambia,

GTBankServices (Banking)10

Cote D’Ivoire, Gambia, Ghana, Kenya, Liberia, Nigeria,Rwanda, Sierra Leone, Tanzania, Uganda

Globacom

Telecommunications

5Benin, Cote d’Ivoire, Ghana, Nigeria, The Gambia

Interswitch

Tech Ecosystem (Digitalpayments and Commerce)

3Kenya, Nigeria, Uganda

Paga

FinTech2Ethiopia, Nigeria
12Potential winners and losers from COVID-19

TradeWinne
rsEntertainment& Tourism

Banking &Finance

Manufacturing
Real Estate

PotentialLosers

Mining &Quarrying

ICT

PotentialWinners

Education
Chemicals &Pharmaceuticals

Food &Beverages

Construction

Oil & Gas
Transportation& Storage

Source: NBS, Nigerian Gross Domestic Product Report (Q2 2020)

rses
Lo
13

Agriculture

Human Health &Social Services

Investment
promotion efforts

iGuide Nigeria

UNECA – United Nations Economic Commission for Africa
UNCTAD – United Nations Conference on Trade and Development

15§

An easy-to-use online investment guidethat provides investors with up-to-date andpertinent information on the processes,procedures and basic costs of doing
business in Nigeria§

It provides information on starting
business, labour, production factors, land,taxes, investor rights, growth sectors andopportunities§

The information will enable investors tomake better informed decisions on Nigeria
as a preferred investment destination§

Available at:§www.theiguides.org/nigeria§

www.nipc.gov.ng

Selection of investment incentives in Nigeria

Pioneer status incentive• For companies in industriesrecognised as “pioneer”• Allows a company income tax holiday
for 3-5 years• Dividends also exempt from tax

Deduction for research anddevelopment• For companies undertaking R&D
activities for commercialization• Allows 20% investment tax credit on
qualifying expenditures

Rural investment allowance• For companies >20km fromgovernment facilities who incur
capex for providing electricity, water,
tarred roads, etc for the purpose of a
trade or business• Allowance rates:•100%: no facilities, 50%: no electricity, 30%: nowater, 15%: no tarred road

Investment tax reliefExport expansion grant• Similar to rural investment
allowance, but only available for 3
years max for companies who havenot enjoyed pioneer status• Post-shipment incentive for non-oilexports• Qualifying exports must fully
repatriate proceeds within 300 days

Source: Compendium of Investment Incentives in Nigeria

16

Export processing zones
incentives• 100% capital allowance• Rent-free land during construction• Full holiday from federal, state andlocal government taxes

WIP: OSIC Lab
Currently in pilot phase
Transparent platform for speedy resolution of investment related issues

Investor raises
issue

3 weeks

OSIC Lab
meeting called

MDAs hearinvestor’s issues
togetherMembers include…

Protect existing
investments/jobs andencourage newinvestments/jobs

17

Comprehensive
all-of-government
solution agreed

Investor advisedof resolution

Drive practicalpolicy reforms

Increase confidence
in businessenvironment

Encourage newand existing
investors

Encourage continued
investment/protect
existing jobs

What NIPC can do for investors Assist investors to navigate challenges in investing in Nigeria
 Assist with connecting prospective foreign investors with domestic partners
 Facilitate discussions with government agencies and policy makers
 Assist investors with quality information to help them implement their investment plans inNigeria
 Facilitate investor input into the policy making process OSIC Lab provides a platform for resolving challenges faced by investors
 Work behind the scenes; easier for policy makers and regulators to change positions if
persuaded privately, not confronted in public This allows us to achieve the desired objective without compromising their independence However, we cannot compel any government agency to do what we advice
 The arguments we make need to be carefully thought through and driven by facts and data18

Nigeria-Japanrelations

Japan: Nigeria investment interests, 2014-2018
Investments by capex ($’m) & jobs
Capex

Top investment interests by sector
3% 4%

1,143

Jobs Created 1,073

Aut omotive OEM

9%Business services
Non-automotive transport
OEM
Software & IT services

10%218102014

2015

59

2016

81
2017

9%

28%

Source: fDi Markets

Consumer products
Other2018

Top investment interests$261 mProjects

Capex ($’m)

Employees

1CFAO Group

173.9

1,007

2Honda Automobile WesternAfrica

173.9

1,007

3SI-UK

246.4

66

4

Yamaha Motor

126.2

200

Rivers State

5NEC XON

117.8

212

Fede ral Capital Territory

6Miniso

17.2

136

7Canon

1

5.7

348

Trend Micro

1

5.2

189

Sony Music Entertainment

14.7

25

Lagos State

45%

56%

18

Investment destinations

9%
9%

18%

212

120

31

$261 mOgun State

Not Specified

2020

Why Japan?

Source: NIPC Intelligence#2
global investor#7
investor in Africa#5
investor in Nigeria

Top 10investor in services

Nigeria’s top 20
import partner

Nigeria’s top 20export partner

Top 10investor in solidminerals#5
investor in oil
refining#5
investor in realestate2121

Success stories

22

About NIPCNIPC’s principal functions
NIPC was established by the NIPC Act* in 1995 to encourage, promote and co-ordinate
investments in Nigeria
Project Attractive
Investment Image• Promote Nigeria as an attractive investment destination• Provide information on investment opportunities and capital sources

Investment
Promotion• Promote investments in Nigeria, by Nigerians and non-Nigerians• Co-ordinate all investment promotion activities in NigeriaInvestmentFacilitation• Provide support services to investors and register enterprises in Nigeria• Match-make investors with specific projects and advise on partners for JVs• Provide information on investment incentives and approve Pioneer Status
Incentive applications

Policy Advocacy• Initiate and support measures that enhance the investment climate• Evaluate the impact of investments and incentives in Nigeria and make appropriate
recommendations• Advise Government on policy matters to promote Nigeria’s economic development*Nigerian Investment Promotion Commission Act, Chapter N117, Laws of the Federation ofNigeria 2004

24

Investor Obligation and Protections in the NIPC Act
Registration
Obligation•Enterprises in which
foreigners canparticipate arerequired to registerwith NIPC before
commencing
business

ICSID = International Centre for Settlement of Investment Disputes

Ownership

Guarantees

Dispute Resolution•Nigerians andforeigners can invest
in any sector, except
for those on thenegative list
•No restriction on
foreign percentage
ownership•Government will notnationalize or
expropriate any
enterprise•Right of access tocourts and fair andadequate
compensation if
acquisition is innational interest/for
public purpose•No restriction on
repatriation byforeigners ofinvestment returns
or sale proceeds
through an
authorized dealer•Amicable resolution
by mutual discussion
or arbitration ofinvestor/government
disputes•Provisions of any
Bilateral Treaty with
the investor’scountry will apply•Right of recourse tointernational
arbitration under
ICSID Rules

25

For further details, pleasecontact us

Mohammed Baba
Deputy Director, Investor Relations
Subscribe to the NIPC Newsletter
http://eepurl.com/dkvoU1
Investment information
www.theiguides.org/nigeria

Plot 1181 Aguiyi Ironsi Street
Maitama District
Abujainfodesk@nipc.gov.ng
osicinfodesk@nipc.gov.ng
www.nipc.gov.ng