WHY NIGERIA REMAINS AN ATTRACTIVEINVESTMENT DESTINATIONUNIDO-ITPO NIPC NIGERIA BUSINESS SEMINAR

Yewande Sadiku
Executive Secretary/CEO
Virtual | 16 September 2020

Why Nigeria

Biggest economy in Africa
Projected average real GDP growth p.a., 2016-2050

5%
4.2%

Nigeria could be the fastest growing African economy to 2050,
and could move up the GDP rankings, to 14th by 2050, if it candiversify its economy away from oil and strengthen its
institutions and infrastructure.

1.9%

4%

3%

2.3%

2%

1%

0%

Average pop growth p.a %Average real growth per capita p.a %Source: PWC Analysis, from “The long view: how will the global economic order change by2050?”

3

Average GDP prowth p.a. (in domestic currency)

Japan

Italy

Germany

Spain

FranceNetherlands

United States

South Korea

CanadaUnited Kingdom

RussiaPolandAustralia

BrazilThailand

Argentina

TurkeyIranChina

Saudi Arabia

MexicoColombia

Malaysia

South Africa

Indonesia

Egypt

Nigeria

Philippines

Pakistan

Bangladesh

India

Vietnam14-1%

Largest population in Africa
Most populous countries
China

China

India

India

India

China

USAUSARussia

Indonesia

USAJapanBrazilIndonesia

Germany

Pakistan

PakistanIndonesia

7Nigeria

3190.9m

Nigeria

BrazilBrazilBangladesh

Bangladesh

BritainRussia

Congo DR

Italy

MexicoEthiopia

FranceJapan

MexicoBangladesh

Ethiopia

Egypt

1950

2017

2050
Forecast

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

4410.6m

Favourable demography
By ageBy size, millions

Labour force
47% (92m)

3rd
globally

7th
globally

Under 5091% (178m)

65+
3%(6m)

Female49%

181
Female49%

196 million

0-14Male51%

42%(82m)

2015411Male
51%

2016

2017

2018

2020

2025

2030

2035

2040

2050

Median age

15-64

36.1

55%(108m)

30.9
24.8
19.8

22.4

18.1
Youth (15-35)
36% (73 m)
Source: UN Population Division, 2017Median age - 18.4 years

2015
55

2020

2025

2030

2035

2040

2045

2050

Ideal gateway economy for leveraging AfCFTA
Nigeria is more ready than most African
economies

3’05’ Tunis

1.Large domestic market makes Nigeria the ideal
gateway economy

5’45” Cairo

5’ Dakar

ECOWAS
5’20” Addis Abba

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

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

5.Many Nigerian companies, particularly in theservices sector, have long developed the capacity
to serve the rest of Africa5’40” Johannesburg

6.Complements Nigeria’s national development
agenda and can catalyse economic diversification
6Selected Nigerian companies and their networks in Africa
CompanySector

African operations

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

Manufacturing (Industrial,Food & Beverages)

12

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

Services (Banking)10

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

Telecommunications

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

Tech Ecosystem (Digitalpayments and Commerce)

3Kenya, Nigeria, Uganda

FinTech2Ethiopia, Nigeria

Services (Banking)7

What investors tellus

Africa’s investment attractiveness

Biggest draws:
natural resources,
high growth rates
and large
domestic
markets…

Nigeria has 4 of the 5 key factors investors
look for in its favour
Source: EY’s 2015 Africa Attractiveness Survey…yet concerns about businessenvironment persist

9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 Year

Rank

2020
2019

Difference*DTF

Difference

131/ 190

+15

56.9

+4.01

146/ 190

-1

52.89

+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+1Getting credit

15/ 190-3

Protecting minority investors

28/ 190+10Paying taxes

159/ 190-2

Trading across borders

179/ 190+3

2018

145/ 190+2451.52

+6.89

2017

169/ 190+144.63-0.06

Enforcing contracts

73/ 190+20

2016

170/ 189

044.69+1.14

Resolving insolvency

148/ 190+1

Source: World Bank, Doing Business 202010

* 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

CAMA 2020, changing the investment landscapeSigned into law on 7 August 2020
Single shareholder for privatecompanies
S.18(2) makes it possible to establish a privatecompany with only 1 shareholder.

E-filing and virtual meetings
S.176(1) and S.240(2) allow electronic
instruments of transfer and virtual meetings (forprivate companies)

Enhancement of minority
shareholder rights
S.265(6) restricts the chairman of a publiccompany from acting as its chief executive officer

Minimum Issued Share Capital
S.27(2) replaces ‘authorized share capital’ with‘minimum share capital’.

Limited Liability Partnerships(LLPs)
S.746 – 810 acknowledge LLPs as a businessstructure.

Appointment of company
secretary
S.330(1) makes the appointment of a company
secretary optional for private companies

Disclosure of significant control
and beneficial ownership
S.119 and S.120 provide that significant control inany company be disclosed within a week ofacquisition
CAMA - Companies and Allied Matters Act, 2020

11

Exemption from appointing
auditors
S.402 exempts small companies or single
shareholder companies from appointing auditors
to audit the financial statements of the company.

Reduction of filing fees forregistration of chargesS.223(12) reduces the fees payable for filing to0.35% of the value of the charge, a 65%
reduction from the old law

Business rescue provisions forinsolvent companies
Frameworks for rescuing a company in distressand to keep it alive introduced in sections S.434
to S.442, S.443 to S.549, and S.718 to S.721

Despite the challenges, there are very many reasons to invest in Nigeria…
One of the mostentrepreneurial,
innovative andingenious economies…

Strategic location

Strategic time zone
GMT +1

Favourable weather

Language: English

Large growing population –3rd largest by 2050

Growing middle class
population

Young, energetic, tech-savvy
entrepreneurial population

Optimistic mobile
population

Resilient, hard-working “cando” spirit

Large population ofconsumers

Huge unfilled demand

Improving businessClimateAbundant naturalResources

Abundant economic
opportunities

Private sector-led
economyHome to many large local
and international brands₦
Generous investment
incentives

Sophisticated financial
markets

Generous investor
protections…scale of opportunities,
quality of talent, scale ofambition and aspirationof government…

Fast growth economic
projections – aspires to be
14th by 2050

Two decades of politicalstability

12

An essential component ofevery Africa strategy…adaptability andagility of the people

Accessing Nigeria

iGuide Nigeria

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

14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

Compendium of Investment Incentives in Nigeria
 Compilation of fiscal incentives in Nigerian
tax laws and duly approved sector-specificincentives
 6 principal sections
 Investment policies and protections
 General tax-based incentives
 Sector-specific incentives
 Tariff-based incentives
 Export incentives
 Special Economic Zones

 First step in understanding impact of
incentives in achieving Government’s
economic objectives and considering
incentive reforms
 Available at www.nipc.gov.ng
15

Select investment incentives in Nigeria
Pioneer status incentive• For companies in industries
recognised 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

Investment tax relief

Export expansion grant• Similar to rural investment
allowance, but only available for 3years max for companies who
have not enjoyed pioneer status• Post-shipment incentive for nonoil exports• Qualifying exports must fully
repatriate proceeds within 300days

Source: Compendium of Investment Incentives in Nigeria

16

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• Rates: 100%: no facilities; 50%: noelectricity; 30%: no water; 15%:
no tarred road

Export processing zones
incentives• 100% capital allowance• Rent-free land duringconstruction• Full holiday from federal, stateand local government taxes

Winners and losers from COVID-19, Q2 2020
Agriculture, (N3.9 trillion)+1.58%

Industries, (N3.5 trillion)

5.68

10.53

6.95

-12.05%

3.79
-3.01

-6.39

-6.63

-14.43-31.77

2.26
1.44

FishingLivestock

1.08

Crop Production-67.66

ForestryServices, (N8.5 trillion)
28.41

18.10

8.78

2.02

-6.78%
1.89-8.93

Source: NBS: Nigerian Gross Domestic Product Report (Q2 2020)-15.41-16.59-21.99-24.12-28.33-29.53-40.19-51.37-57.38-63.32

Coal – Coal Mining, MV&A – Motor Vehicle & Assembly, C&PP – Chemical & Pharmaceutical Products, FBT – Food, Beverage & Tobacco, Quarrying –17 Quarrying and Other Minerals, CP&NG – Crude Petroleum & Natural Gas, TAF – Textile, Apparel & Footwear, Const. – Construction, Refining – oil Refining,
Fin. Inst. – Financial Institutions, Tel. – Telecommunications, Public Adm. – Public Administration, HH&SS – Human Health & Social Services, AE&R – Arts,Entertainment & Recreation, PS&TS – Professional, Scientific & Technical Services, Water – Water Transport, Accom. – Accommodation & Food Services,
Road – Road Transportation, Air – Air Transportation, Rail – Rail Transportation

Sector reports

Sector reports available fordownload from NIPC’s website
18

Book of States: showcasing investment prospects across Nigeria

19

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

20

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

Success Story: Nigeria LNG Limited
Overview

Marketing, producing and shipping ofNigeria's gas resources

Subsidiaries

Head OfficePort Harcourt

Shareholders

Origin: Nigeria

Highlights

25.6%

49%

15%

10.4%

Plant
Bonny Island

Bonny Gas Transport
LimitedFinancial Summary: 2012 - 2017

Sector: Oil & Gas

US$2.35bn$’bn Turnover
201
7201
6201
5201
4201
3201
20Source: Nigeria LNG Limited

6.0
4.7
6.8
10.8

Expansion plans (3-5 years)•NLNG Ship
Management Limited

Capital Investment(2012 – 2017)• 6-train complex is Nigeria’s biggest gas plant and was the fastest growing LNG plant in the world
between 1999 and 2007.
• Liquefies c.28 bcm of gas annually (since 2008)• Capacity to produce 22 MTPA of LNG and 5 MTPA of NGLs
• Global delivery of LNG, Condensate and LPG around the world.
• Single largest supplier of LPG to the Nigerian market – (Over 50%)
• Total CSR spend of c. $200m and also supported FGN with N60 billion commitment to actualize
the Bonny-Bodo Road .
• Special incentive for investment expansion supported quick development of LNG trains“Our vision is to be a
global player; helping
to build a better
Nigeria! NLNG remains
the biggest
opportunity for
Nigeria to unlock her
full gas potential – It’stime for Gas!”
Tony Attah, MD/CEO
Nigeria LNG Limited

Addition of 7th train and a common liquefaction unit will increase LNG production capacity by36% from 22 MTPA to 30 MTPA
• Enabling expansion of domestic LNG and LPGValue addition to Nigeria’s economy
Employment

EconomyValue chain

Globalvisibility

Environment• > 1,000 staff• 100% NigerianManagementTeam• Has createdover 18,000
indirect jobs
for Nigerians• Empowered
localbusinesses•Contributes~1% ofNigeria’s GDP• Paid total
dividends of$16.5bn anddelivered$6.5bn, intaxes, toNigeria frominception to2017•Uses made in
Nigeria paints,
cables, anodes
and furniturein the design
andconstructionof its vessels•Introduced
Nigerian
suppliers toglobal vessel
manufacturers•Export of LNG
makes Nigeria
the 4th largest
LNG exporterin the world(2016)•Was thefastest
growing LNG
plant in theworld
between 1999
and 2007•Ensured
reduced gas
ﬂaring by
upstreamcompanies
from over 60%
to less than25%•Supporting
Nigeria’s
attainment of
Paris Accord
obligations

9.7
11.6

21

Japan-Nigeria
relations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 20
export partner

Top 10investor in solidminerals#5
investor in oilrefining#5investor in realestate23

Japan - Nigeria Business Facilitation CouncilBackground• Established on 29 August 2019

Objectives• speedy resolution of business challenges• foster sustained engagements between both governments and private sector• address critical issues hindering greater bilateral trade and investment• elevate dialogue among policymakers, business people, and investors

Participants• Co-chaired by H.E Ambassador of Japan and ES/CEO of NIPC
• Relevant MDAs, JETRO, JICA, Embassy of Japan, Japanese and Nigerian Business communities

Structure• Business-to-business (B2B)• Business-to-government (B2G)• Government-to-government (G2G)

Joint Implementation Committee/Secretariat• Embassy of Japan and JETRO office in Lagos• NIPC24

Japanese brands in Nigeria

JAPAN DESKCountry Desk Officer: Mohammed Baba
Email: mohammed.baba@nipc.gov.ng
25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

InvestmentPromotion• Promote investments in Nigeria, by Nigerians and non-Nigerians• Co-ordinate all investment promotion activities in Nigeria

Investment
Facilitation• 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 200427

Investor obligation and protections in the NIPC Act

Registration Obligation

Ownership

Guarantees

Dispute Resolution• Enterprises in which
foreigners canparticipate arerequired to registerwith NIPC before
commencing business• Nigerians andforeigners can invest in
any sector, except for
those on the negativelist• No restriction on
foreign percentage
ownership• Government will notnationalize or
expropriate anyenterprise• Right of access tocourts and fair andadequate
compensation if
acquisition is innational interest/for
public purpose• No restriction onrepatriation byforeigners ofinvestment returns orsale proceeds throughan authorized dealer• Amicable resolution bymutual discussion or
arbitration ofinvestor/government
disputes• Provisions of any
Bilateral Treaty with
the investor’s country
will apply• Right of recourse tointernational
arbitration under ICSID
Rules

ICSID = International Centre for Settlement of Investment Disputes

28

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 data29

For further details, pleasecontact us

Yewande Sadiku
Executive Secretary/CEOSubscribe to the NIPC Newsletter
http://eepurl.com/dkvoU1
Investment information
www.theiguides.org/nigeria

Plot 1181 Aguiyi Ironsi Street
Maitama DistrictAbuja
infodesk@nipc.gov.ng
osicinfodesk@nipc.gov.ng
www.nipc.gov.ng