INVESTMENT
OPPORTUNITIES IN AGRICULTURE:
The agricultural potential of Nigeria is barely
being tapped and this explains the inability of the country to meet the ever
increasing demand for agricultural produce.
Although the agricultural sector remains a dominant employer of labour,
serious investment is needed across the board to enhance production and
increase the contribution of the sector to GDP.
Investment is required in the following priority activities:
(a)
Crop production to achieve food security and to provide industrial raw
materials. Potentials exist for
the following crops:
Cereals: Maize, rice,
sorghum, corn, millet, wheat.
Root crops: Cassava,
yam, ginger, potato, coco yam.
Legumes:
Soya beans, groundnuts, cowpeas.
Fruits:
Mango, banana,
oranges, guava, papaw, pineapple.
Vegetables:
Cabbage,
green pepper, carrots, lettuce, spice, onions,
melons.
Tree crops:
Oil palm,
cocoa, rubber, coconut, kola nut, coffee, she nuts, beniseed, cotton, cashew
nut, sugar cane.
Others:
Commercial growing of flowers and ornamentals and
experimental orchards for more temperate fruits-apples, grape vines and pears
have been successfully established in the high plateau regions.
(b)
Food processing and preservation involving industries that will use
agricultural produce as raw materials.
(c) Livestock and Fisheries production which possess great
potentials for development. Grazing
lands are abundant, facilities for animal feed production are plentiful, and
the in-land rivers, lakes and coastal creeks are sufficient to augment ocean
fishery resources.
(d)
Agricultural inputs supplies and machinery, water resources development
especially for flood control infrastructure and irrigation.
(e)
Commodity trading and transportation.
(f)
Development and fabrication of appropriate small-scale mechanized technologies for on-farm processing and secondary processing of agricultural
produce.
(g)
Exploitation of timber and wood processing activities.
A wide range of wood resources abound.
AVERAGE ANNUAL
(1990-1998) OUTPUT OF MAJOR AGRICULTURAL COMMODITIES IN NIGERIA, CROP
PRODUCTION (‘000 TONES)
A. |
Cereals |
|
|
Maize |
5954 |
|
Millet |
5134 |
|
Millet |
3048 |
|
Wheat |
205 |
|
Sorghum |
7096 |
|
B. |
Grain
legumes or Pulses |
|
|
Cowpea |
1644 |
|
Soybean |
248 |
|
C. |
Root Tubers
|
|
|
Yams
|
21100
|
|
Cassava
|
214 |
|
Coco yam |
1589
|
|
Irish
potato
|
85
|
|
Sweet
potato
|
812
|
|
D. |
In
Industrial Crops
|
|
|
Cotton
|
287
|
|
Groundnut |
1716
|
|
Cocoa
|
288
|
|
Coffee
|
346
|
|
Sugar Cane
|
755
|
|
Palm kernel
|
742
|
|
She nut |
265
|
|
Rubber
|
170
|
|
Ginger
|
49
|
|
Benniseed
|
58
|
|
Palm
Oil
|
784
|
|
Coconut
|
141
|
|
These
are widely used in food and beverage sub-sectors like flour mills, breweries,
chemical, pharmaceuticals, pulp and paper, wood products and industrial
starch.
OPPORTUNITIES IN THE
OIL AND GAS SECTOR
Foreign
and domestic investors are being encouraged through improved fiscal incentives
in the Nigeria oil and gas sector. In
the Upstream and Downstream sectors, the following are some of the areas where
there are pressing needs for investors.
(A) UPSTREAM ACTIVITIES
(i) Petroleum Exploration and
Exploitation.
(ii) Search for development of
local substitute for such items as Medium pressure valve, pumps, shallow drilling equipment,
Drilling mud, bits fittings, drilling cements etc.
(iii) Manufacturing of consumable
materials in exploration such as explosives, detonators, steel castings, magnetic tapes etc.
(iv) Other areas in the services
sector of the upstream are:
1.
Construction and Installation
2.
Maintenance
3.
Pipelining
4.
Well Services and
5.
Transportation Support Services.
(B) DOWNSTREAM
ACTIVITIES:
(i)
Domestic Production and
marketing of Liquefied Petroleum Gas (LPG)
(ii)
Manufacturing of LPG
cylinders, valves and regulators, installation of filing plants, Retail distribution and development of simple, flexible and much less expensive gas
burner to encourage the use of gas instead of wood and other fuels.
(iii) Establishment of processing
plants and industries for:
- The production of refined mineral oil, petroleum jelly and
grease.
-
The manufacture of bituminous based water/damp-proof
building materials such as roofing sheets, floor tiles, rubber
products, tarpaulin. Building of asphalt
storage,
packaging and blending plants to handle the product for export.
(iv)
Establishment of chemical
industries such as distillation units for the production of
naphtha and other special boiling point
solvents used in plant and other food processing industries.
(v)
Establishment of industries
for processing Linear Alkyl Benzene, Carbon Black and Polypropylene.
(vi) Development of Phase II
(Phase III to join later) of Nigeria’s Petrochemical
Programmed.
(vii)
Participation in all phases
of the Nigeria Gas Industry development programmed from exploration, gathering,
production and processing to transmission.
(viii) Establishment of small
scale industries to produce chemicals and Solvents, for example Chlorinated methane,
Formaldehyde, Acetylene, etc., from natural gas.
(ix)
Refining: One condition for purchasing Nigerian Crude Oil is
the ownership of an efficient refinery.
The shelter which the domestic petroleum products market enjoys, almost completely
seals the prospects and viability of
privately financed refinery for locally consumed petroleum products.
However, opportunities exist for the construction of a refinery in bonded
premises with adequate export facilities for dedication to the export market.
Companies with the technological know-how can undertake turn-around
maintenance of refineries. Refineries
consume
a lot of chemicals and utilize a broad range of spare parts.
There is tremendous scope for small scale joint venture manufacturing concerns with foreign technical partners.
Such ventures can start warehousing arrangements that will ensure continuity of supply at competitive prices.
Other investment opportunities contingent upon refining and Ancillary activities
are the manufacture of
special products such as:
-
Industrial and food
grade solvents
-
Insecticides
-
Cosmetics
-
Mineral Oil, petroleum
jelly grease
-
Bituminous-based
water/damp-proof building materials such as floor tiles, rubber products, tarpaulin, etc., and
-
Asphalt storage,
packaging and blending plants to handle products for export and local use.
Export of refined products surplus also exists as an opportunity in refining.
(x)
Products Marketing:
Petroleum Product Marketing would seem sealed with hardly any opportunity except by way of
establishing an independent marketing outfit or aspiring to establish dealership with the marketers.
While
indeed those opportunities remain viable, far more challenging opportunities
may be explored in the areas of product transportation, by road and coastal
tankers.
Associated
with products distribution and marketing is a chain of manufacturing and
maintenance business such as lubricating oil reprocessing, LPG bottles and
accessories, oil cans reconditioning, etc.
The
nations pipeline and depot network consists of 3,001km of pipeline of varying
sizes as well as sixteen (16) storage depots.
These pipelines and networks traverse the length and breath of the
country. The system therefore
must be maintained in a healthy state for effective and efficient distribution
of products.
OPPORTUNITIES FOR
INVESTMENT IN THE SOLID MINERALS SECTOR
Nigeria
is endowed with numerous mineral resources.
Recent policy reforms have brought the solid minerals sector to the
fore. The emphasis is on
encouraging massive foreign investors’ participation in this sector.
PROFILE OF SOLID
MINERALS DEPOSITS IN NIGERIA
TALC
An
estimated reserve of over 100 million tones of talc has been obtained in
Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.
There are only two medium size talc processing plants currently
operating in Nigeria and both are located in Niger State.
The color of the Nigerian talc varies from white through milky-white
to gray. The talc industry
represents one of the most versatile sectors of the industrial minerals of the
world. The exploitation of the
vast talc deposits in Nigeria would therefore satisfy not only local demands
but also that of the international markets as well.
IRON ORE
There
are over 3 billion tones of iron ore found in kogi, Enugu, Niger, Zamfara and
Kaduna States. Iron is currently
being mined at Itakpe (Kogi State), which is more or less at the center of the
region of crystalline iron deposits. The
large deposit of oolitic iron ores of Kogi and Enugu States are yet to be
fully explored. Itakpe iron ore
is being beneficiated to 67% Fe. To
feed Aladja and Ajaokuta Steel complexes.
Besides there are three in-land rolling mills at Oshogbo, Jos and
Katsina in addition to some privately owned rolling mills in Lagos and Kano.
GOLD
There
are proven reserves of both alluvial and primary deposits of gold with proven
reserves in the shiest belt covering the western half of Nigeria.
At present exploitation of alluvial deposits is being carried out mostly
by artisan miners in a few places in the country.
A number of primary deposits, which are sufficiently big for large
scale mechanized mining, have been identified in the northwest and southwest
parts of the county. Private
investors are invited to stake concessions on these primary deposits.
It is interesting to note that the primary deposits are of relatively
high grade and at shallow depth. Production
costs will easily be as low as about $50 per ounce.
BITUMEN
The occurrence of Bitumen deposits in Nigeria is indicated at about 42 billion
tones almost as twice the amount of existing reserves of crude petroleum.
When fully developed, the industry will no doubt meet local requirements
for road construction and also become a foreign exchange earner for the
country.
ROCK SALT
The
national demand for table salt, caustic soda, chlorine, sodium bicarbonate,
sodium hypochloric acid and hydrogen peroxide exceeds one million tones.
A colossal amount of money is expended annually to import these
chemicals by various companies including tanneries, food beverages, paper and
pulp, bottling and other industries including the oil companies.
There are salt springs at Awe (Plateau State), Abakaliki (Enugu State)
and Uburu (Imo State), while rock salt is available in Benue State.
A total reserve of 1.5 billion tones has been indicated, and further
investigations are now being carried out by government to ascertain the
quantum of reserves.
GYPSUM
Gypsum
is an important imput for the production of cement. It is used for the production of Plaster of Paris (P.O.P) and
classroom chalk, etc. A strategy
for large-scale mining of gypsum used in the cement industries is urgently
required to sustain existing plants and meet future expansion. Current cement production is put at 8 million tones per
annum while the national requirement is 9.6 million tones. About one billion tones of gypsum deposits are spread over
many states in Nigeria.
LEAD/ZINC
An
estimated 10 million tons of lead/zinc veins are spread over eight States in
Nigeria. Joint venture partners
are encouraged to develop and exploit the various lead/zinc deposits all over
the country.
BENTONITE AND BARYTE
These
are the main constituents of the mud used in the drilling of all types of oil
wells. The Nigerian baryte had
specific gravity of about 4.3. Over
7.5 million tons of baryte have been identified in Taraba and Bauchi States.
Large bentonite reserves of 700 million tonnes are available in many
states of the Federation ready for massive development and exploitation.
COAL
Nigerian
Coal is one the most bituminous in the world owing to its low sulpur and ash
content and therefore the most enviroment friendly. There are nearly 3.00 billion tonnes of indicated reserves in
17 identified coalfields and over 600 million tonnes of proven reserves.
GEMSTONES
Gemstone
mining has boomed in various parts of Plateau, Kaduna and Bauchi States for
years. Some of these gemstones
include Sapphire, Ruby, Aguamarine, Emerald, Tourmaline, Topaz, Garnet,
Amethyst, Zircon and Flourspar which are among the world’s best.
Good prospects exists in this area for viable investments.
KAOLIN
An
estimated reserve of 3 billion tonnes of good kaolinitic clays has been
identified.
TANTALITE
Large
deposits of Tantalite are known to occur in Nasarawa, Gombe and Kogi tates as
well as the Federal Capital Territory. The
deposits ar both alluvial and primary in the numerous pegmatite bodies that
infest these ares. Grades of well
over 50% Ta2O5 are found. Private
investors are invited to stake concessions for the development and
exploitation of tantalite in these areas.
Pelletisation of Coal
for Domestic Use
Given
the large deposits of brown coal in the tertiary sediments east and west of
River Niger; Nigeria can cash in on foreign investors’ technology to produce
coal pellets for industrial use, coal briquettes for domestic use; that is, to
replace firewood.
Incentives and
Strategies for Investment
Investment Incentives:
- 3-5 years Tax Holiday.
- Deferred royalty
payments.
- Posible capitalisation of expenditure on exploration and surveys.
- Extension of
infrastructure such as roads and electricity to mining sites, and provision
of 100% foreign ownership of mining concerns.
HOW TO OBTAIN A MINING
LEASE IN NIGERIA
There
are two options available to a company or an individual to enter into mining
industry in Nigeria.
Through
the acquisition of an existing mining property from the original owner.
Approval must be obtained from the Ministry of Solid Minerals
Development for such a purchase.
By
obtaining an application, either a Prospecting Right (PR), an Exclusive
Prospecting Licence (EPL), or a Special Exclusive Prospecting Licence (SEPL),
the application should state financial and technical capability qualifying the
applicant for entry into the mining sector.
PERMIT |
REQUIREMENTS |
DURATION
|
Entry permit into the mining sector
|
-Statement of financial capability
-Statement of technical capability
-Proof of statutory existence of company |
Life |
Prospecting
Right/Licence
|
-Certificate of entry into mining
-Prospecting
Licence |
1 Year renewals
Alluvial-Max. Of 2
Bassalt-Max.
Of 4
Lode-Max.
Of 5 |
Exclusive prospecting Renewals exceeding
20.72)
|
-Same as above
|
Duration of 1- 5 Right/Licence (for areas up
Years Depending on
Reserves
|
Mining Lease (gives right to mine specified land area
of 80 hectares)
|
-Possession of a Prospecting Right,
Exclusive Prospecting Licence or Special
Exclucive Prospecting Licence.
-Submission
of a plan of the prospecting done, a schedule of the mineral
value
found and a statement of ore
reserves.
-Submission of an enviromental impact assessment and production plan.
|
Not exceeding 21 years Renewal depending
on remaining reserves |
Special mining lease for an area larger than 80 hectares |
- Same as above. |
Metallic minerals not
More than 21 years.
More than 21 years.
not
exceeding 70 years. Renewals at minister’s descretion, for
not more than 21
years.
|
Entry into the mining
Industry
|
- Statement of financial capability
- Statement of technical competence
-
Proof of statutory existence of company.
-
Evidence of tax clearance
-
Payment of prescribed fee
|
Life
|
Prospecting Right
(P.R.)
|
- Certificate of entry into the mining
industry.
-
Payment of prescribed fee
|
1 year
(Renewable annually)
|
Exclusive Prospecting (E.P.L.)
(for areas up to, but not exceeding 20.72km2)
|
- Certificate of entry into the mining Industry
- Extant Prospecting Right (P.R.)
- Payment of prescribed fee
|
1 year renewable for:
Alluvial Deposits-
maximum of 2
renewals: Basslt:-
Max.
Of 4 renewals Max. Of 5 renewals |
Special Exclusive Prospecting Licence
(S.E.P.L.)
(For areas greater than 20. 72km2 & of difficult
terrain Mining Lease (M.L.) |
- Certificate of entry into Mining
Industry
- Extant Prospecting Right (P.R.)
- Payment of prescribed fee
- Certificate of entry into mining Industry
-
Extant Prospecting Right (P.R.)
-
EPL or SEPL
-
Prospecting plant of the area showing Ore reserve estimates.
-
Payment of prescribed fee.
|
1-5 Years.
Up to 21 years,
renewable depending on remaining on reserve
|
Special Mining Lease (SML)
(for areas greater than that of ML. With difficult terrain and large capital out-lay). |
- Certificate of entry into mining Industry.
- Extant prospecting Right (PR)
- EPL and SEPL
- Prospecting plan of the area showing on reserve estimates
-
Payment of prescribed fee.
|
Up to 21 years renewable depending
on the remaining on
reserve. |
INVESTMENT
OPPORTUNITIES IN THE POWER, STEEL AND ALUMINIUM SECTORS.
POWER SECTOR:
Government has concluded plans towards revitalization of installations
of the National Electric Power Authority, NEPA to enable it meet its total
installed capacity of 6000MW. Sufficient
funds are being injected for the rehabilitation of ageing plants and
equipment. In order to allow full
private sector patricipation in power generation, transmission and
distribution, government has accepted to deregulate the secror by the year
2000. This will allow local and
foreign investors to build, own and operate and/or transfer independent
electricity. All laws that
inhibit private sector participation in the power sector are being reveiwed
with a view to amending them and encouraging investment.
This step will complement the de-consolidation of the industry as far
as the state-owend NEPA is concerned. The
hitherto largely over-centralised operations of this agency will be
decentralised.
Guidelines
and framework for Independent Power Products (IPP’s) are now being put
together folowing the interests and applications already put forward by
independent producers from all around the world.
Investment
Opportunities exist for hydro-power generation in Mambilla Fall, Adamawa State
and Agbokin fall in Cross-River State. NEPA
will readily negotiate a Memorandum of Understanding (MOU) with any foreign
energy company to cover the following areas:
(i) Development of energy
resources and infrastructures,
(ii) Management of energy infrastructure;
(iii) Commercialization of energy
(iv) Training; and
(v) Exchange of information and
experience.
It
is expected that further discussions will centre on:
(i)
Construction and management of power stations by private companies;
(ii) Production of Steam and gas turbine spare parts;
(iii) Repairs and testing of power transformers;
(iv) Development of wind turbines for generation of electricity;
(v) Manufacture of distribution transformers and line
hardware;
(vi) Technology transfer through joint erection of new power
plants;
(vii) Training of NEPA staff in computer based maintenance
system etc.
NEPA
and the foreign company will then set up a joint committee for the purpose of
achieving these objectives.
THE STEEL SECTOR:
Plans by the Ministry to revitalise the steel
sector are underway. As a first
step to reviving the sector, technical audit and cost estimate for completion
of Ajaokuta Steel Project are being contempleted.
The Ministry is also planning to rehabilitate the Delta Steel Company
and three in-land Steel Rolling Mills in the country with a view to making
them function effectively. Staff
training and development is also being given attention because local skilled
manpower availability can motivate an investor into the industry.
These are aimed at putting the sector in a state of readiness for
foreign investment.
In
consonance with the nation’s technical and economic co-operation policies
for this sector, some areas of joint co-operation have been identified, and
investors will be encouraged to invest in the sector. Discussions will centre on joint venture commercial operation
of the completed units of the Ajaokuta Steel Project. Investors will be encoureged inthe following areas:
(i) Iron Making Plant with capacity to produce
1.35 metric tonnes of billets;
(ii) Billet Mill with capacity to produce 795,000 tonnes
of billets per annum;
(iii) Light Section Mill with capacity to produce 400,000
tonnes of bars per annum;
(iv) Medium Section Mill with
capacity to produce 130,000 tonnes of wire coils per annum; and
(v) Engineering Workshops
comprising:
-
The Power Equipment Repair Shop
-
Forge Fabrication and
Rubberising Shop with capacity to produce 4,200 tonnes of fabricated structures.
THE ALUMINIUM SECTOR:
The Aluminium Smelter Company of Nigeria,
ALSCON, is a joint venture project in which Nigeria owns 70% of the equity
shares, while the remaining 30% is shared between AG Ferrostaal of Germany
with 20% shares and Reynolds Inc. Of US with 10% shares.
The present administration is making efforts to ensure that the
aluminium smelter plant is properly funded.
It has given invitation to private investors to invest in the company
and /or take part of Nigeria’s 70% shares.
The plant is one of the best and biggest in the world with the most
modern technology. A number of
countries have signed or are negotiating trade and economic cooperation
agreements with Nigeria. Since
the essence of these bilateral agreements is to foster unity: boost economic
growth and technological co-operation, foreign investors should take advantage
of existing bilateral ties and harken to the call to invest in the ALSCON
project as in other projects in the power and steel sectors.
COMMUNICATIONS SECTOR
The
deregulation of the telecommunications sector in 1992 through Decree 75 was to
allow for private sector participation in the sector and expand the nation’s
communication facilities. The Nigeria Communications Commission (NCC) was
established consequently to regulate the performance of the sector.
The liberalisation thrust was further strengthened by the Nigeria
Communications Commission (Amendment) Decree No. 30 of 1998 which deleted
those provisions in the first decree that inhibited competition in the sector
thus enhancing the expected role of private sector enterprises.
The
functions of Nigerian Communications Commission include:
*
Regulating the privatised sector of the telecommunications industry.
*
Facilitating entry into the telecommunications market by private enterpreneurs.
*
Creating a regulatory enviroment for the supply of telecommunications
equipment and facilities.
*
Issuing of telecommunications licences.
*
Promoting fair competition and efficient market conduct among all players in the
telecommunications industry.
*
Arbitrating disputes between participants in the telecommunications industry and protecting consumers
against unfair practices.
INVESTMENT
OPPORTUNITIES IN TELECOMMUNICATIONS INDUSTRY IN NIGERIA
1. LOCAL MANUFACTURE OF
EQUIPMENT
The
telecommunications industry in Nigeria is far from being developed.
There is a dearth infrastructural facilities and this has placed a
constraint on the provision of services to existing and potential customers.
There is therefore an urgent need to expand the infrastructures in this
sector if it is to effectively play its role in the economic, social, plotical,
cultural and in fact overall development of the Nigerian society and properly
integrate it into the international community.
Such desired expansion can not be achieved under the present
dispensation where the needed equipment are usually imported with attendant
problems of foreign exchange procurement, freighting cost, long delivery
period etc. There is therefore no
other realistic option thanthe local manufacture of these equipment and
spares.
SWITCHING AND
TRANSMISSION EQUIPMENT
Local
manufacture of switching and transmission equipment is requird since no single
company exists in Nigeria or even neighbouring countries for this purpose.
Hence any company that goes into the venture will have its market
beyond the frontiers of Nigeria.
CABLES
In
Nigeria, there are three companies engaged in the production of
telecommunication cables using imported copper and other local resources like
poly vinyl chloride materials for insulation.
There is no company that is cuurently producing fibre optic cables in
the country.
The
copper cable producing companies are producing only low pair capacity of 50,
100, 200 pairs. There is need for
a plant that will produce high pair capacity cables that will enhance massive
provision of lines to the teaming population.
2. FACILITIES AND
SERVICES PROVISION
With
Nigeria’s population that is over 108 million people, an installed telephone
capacity of about 700,000 lines and a telephone penetration of 0.65 lines to
100 persons, it is abundantly clear that telephone service to the populace is
grossly inadequate. Even with the
Government introduction of competition in the sector and the subsequent
licensing of Private Telecommunications Operatos. (PTOs), the market has not
experienced any noticeable chang. Although
some of the PTO’s have commenced operation for over two years, they have not
been able to collectively introduce up to 100,000 telephone lines into the
country’s telecommunictions network.
Hence,
the sector is still a virgin land for investors wishing to provide and operate
private network links employing cable, radio communications, data services,
INTERNET Business and Satellite communication, Payphone services and Cellular
radio phone services.
3. JOINT VENTURE FUNDING
OF INVESTMENTS
Apart
from the absence of local manufacture of equipment and inadequate services,
another major problem that has seriously affected the growth of the industry
is insufficient financial resources. The
industry is a capital intensive one and the banks in the country appear no to
have strong financial muscle to handle massive investment in the sector.
The industry has not also attracted individuals’ cooperative
initiative probably as a result of the low level of income per capita in the
economy. Hence joint venture
partnership between foreign investors and Nigerians will be a veritable source
of investment capital for the sector. At
present there is no joint venture enterprise in the sector.
The Nigeria-Turkey joint venture for the local manufacture of telecomms
equipment initiated over five years ago was not concluded as a result of the
plotical climate during this period. It
is hoped that with the return of democracy in Nigeria, negotiation will once
more commence on this issue.
INVESTMENT PROCEDURES
WITHIN THE NIGERIA EXPORT PROCESSING ZONES (EPZ)
i) Any company, person or group of persons
wishing to carry out approved activity within a zone shell apply to the Nigerian
Export Processing Zones Authority NEPZA using the prescribed forms and shall submit such
documents and information in support of the applications. The
forms shall specify the application fees and such other details as the Authority may
stipulate from time to
time. A feasibility study in
respect of the investment project which the applicant wishes to undertake in the zone shall be attrached as an annex to the
application and shall contain the following among others:
-
Project description;
-
Market survey;
-
Funding proposals;
-
Financial projections;
-
Environmental impact statement and control measures.
ii) Application to undertake
approved activity in the zone duly received, shall be considered by the Authority within 30 days of
receipt and the Authority shall notify the applicant in writing og its decisions to grant the said approval or otherwise.
The approval shall be subject to such terms and conditions as may be
imposed by the Authority.
iii) If the application is approved the investor may
proceed to carry out the following:
(a)
Apply for company registration
(b)
If outright purchase of factory building is desired
-
Payment of 10% deposit of the selling price of the standard factory building within 3 months of
approval;
-
Payment of the balance 90%, 5 months after;
(c)
Renting of factory building
-
Down payment of one year rent required not exceeding 3 months after signing the rental contract.
Thereafter, rental charges shall be paid in the first quarter of every year.
(d)
Leasing the standard factory
-
Payment of 40% lease value on approval
-
Payment of 30% at the end of the 5th year
-
Payment of 30% balance at the end of the 10th year.
(e)
Leasing of serviced plots
-
Down payment of 40% on completion of factory building
-
30% at the end of the 5th year
-
30% at the end of the 10th year
Construction
must be completed within a period of one year which can be extended for
another 6 months.
A
plan of the building shall be submitted to the Authority for approval.
The land lease contract shall be signed within 2 months after allocation of land. The
area occupied by such building shall be between 60%-70% of the leased land and
construction shall start within 3 months after signing the lease contract.
iv) With condition(s) in (iii) fulfilled, the investor
may proceed to carry out the following:
Remittance
of Investment Capital through banks in the
zone and notify the Authority on arrival
v) When the factory building
is ready, investor(s) may bring in machinery for installation and workers employed.
Therefore, the Authority shall be required to carry out pre-inspection, and if
found satisfactory, a certificate to commence production will be
issued.
vi) Companies intending to sell
the permitted 25% of their total production in the domestic market, will be required to notify the
Authority for necessary documentation and payment of appropriate levies and charges as applicable.
vii) The company shall apply to the Authority for assessment
of invested
capital for later repatriation purposes.
This is applicable to comanies which are 100% foreign owned and those with part foregn equity participation only.
INVESTMENT REQUIREMENTS
1. Industries must be
guaranteed to be environmentally friendly.
2. At least 75% of total products to be
exported.
3. Maximum of 25% of products
can be exported to the customs. territory on payment of appropriate levies and duties.
4. Minimum investment capital
outlay is 500,000 US Dollars or its Naira equivalent.
TYPES OF INDUSTRIES
PERMISSABLE IN NIGERIA EXPORT PROCESSING ZONES
- Electrical and Electronic
Products
- Leather Products
- Plastic Products
- Petroleum Products
- Rubber Products
- Cosmetics
- Garments
- Chemical Products
- Metal Products
- Educational Materials and
Equipment
- Communication Equipment and
Materials
- Sports Equipment and
Materials
- Machinery
- Handicraft
- Optical Instuments and
Appliances
- Medical Kits and
Instruments
- Biscuits and
Confectionaries
- Printed Materials, Office
Equipment and Appliances
- Paper Materials
- Food processing
- Pharmaceutical Products.
INVESTMENT
OPPORTUNITIES IN THE TOURISM SECTOR
The
Federal Government of Nigeria in its determined efforts to develop and promote
tourism into an economically viabe industry had in 1991 evolved a touriam
policy. The main thrust of the
policy is to make Nigeria a prominent tourism destination in Africa, generate
foreign exchang, encourage even development, promote tourism-based rural
enterprises, generate employment, accelerate rural-urban integration and
foster socio-cultural unity among the various regions of the country through
the promotion of domestic and international tourism. It also aims at encouraging active private sector
participation in tourism development.
The
following special investment potentials exist within the
country:
-
Overland Safaris
-
National Parks
-
Game and Gorilla viewing
-
Deep Sea Recreational Fishing
-
Lake and River Fishing
-
Archaeological Tours
-
Beach Resorts and Hotels
-
Transportation-Water, land and sea
-
Surfing and snorkeling
-
Theme Parks and Exposition Centres
PROCEDURES FOR
ESTABLISHING A BUSINESS ENTERPRISE BY A FOREIGNER IN NIGERIA
STEP 1
Incorporation
of the Business at the Corporate Affairs Commission (CAC) in accordance with the Companies and
Allied Matters Act, 1990.
STEP 2
Registration
of the company with Nigerian Investment Promotion Commission for the granting of Business Permit.
IPC also grnats approvals for expatriate quota positions and incentives.
a.
Requirements for Business Permit
i.
Perchase NIPC form I for N10,000.00.
Completed form submitted with original receipt.
ii.
Certificate of Incorporation.
iii.
A minimum share capital holding in the joint venture.
iv.
Details of share holding in the joint venture.
v.
Joint venture/partnership Agreement where applicable.
vi.
Memorandum and Articles of Association.
vii
CAC’s Form CO2 and CO7 duly certified.
viii. Evidence of capital importation for wholly foreign companies.
ix.
Approval from the appropriate professional bodies where applicable.
b.
Expariate Quota
In
addition to the requirements listed under Business Permit, the following additional requirements have to
be met for expatriate quota approvals.
i.
Evidence of acquisition of operational premises and operational machinery/equipment in the case of
industrial establishment.
ii.
Evidence of Foreign Capital Importation.
iii.
Management and Technical Services agreement (for service companies).
iv.
Tax Clearance Certificate.
v.
Minimum authorised share capital of N5million.
vi. Evidence that the personnel required is not likely to be available in Nigeria.
vii. Minimum share capital of N15 million (for two automatic expatriate quota positions) and of N30
million share capital (in case of four automatic
expatriate quota positions).
viii. Supply names, address, qualifications and positions to be occupied by the expatriates.
ix.
The company must produce its project implementation programme.
x.
The company must produce a training program for Nigerians in addition to management succession
schedule.
xi.
The company will furnish its feasibility report where applicable especially for new and prior industries.
c.
Incentives
These
include pioneer Status and Technical Agreement incentives:
PIONEER STATUS
The
benefit of a Pioneer Status Certificate is that the holder (i.e. the company)
is exempted from payment of tax for a specified number of years (5 years or 7
years for companies located in economically disadvantaged areas).
Requirements
I.
Certificate of Incorporation.
ii.
Memorandum and Articles of Association.
iii.
Feasibility study.
iv.
Tax Clearance Certificate.
v.
Joint Venture Agreement.
vi. Evidence of acquisition and installation.
vii. Evidence of development carried out at factory site.
viii. NIPC Form II (to be purchased from NIPC at N10,000 and should be returned with original
purchase receipt).
ix.
The company must not be more than one year old from its commencement date of production.
x. Evidence of physical development of the factory site.
xi.
Joint venture must attain a minimum expenditure of N5 million.
TECHNICAL SERVICE
AGREEMENT
This
is a form of technical co-operation agreement in which a party will agree to
offer technical services to a company for the payment of a fee.
Details
and terms of such agreements are normally worked out between the parties involved but such agreements should be
registered with the National Office for Technical Acquisition and Promotion (NOTAP).
d.
|
Fees Payable
|
|
|
Purchase of NIPC Form I or II
|
N10,000.00
|
|
Approval Fees
|
|
|
Business Permit
|
N5,000.00
|
|
Expatriate Quota
|
N5,000.00 per slot
|
|
Renewal or Redesignation of Quota
|
N5,000.00 per slot
|
|
Amendment of Business permit
|
N2,500.00
|
|
Permanent Until Reviewed (PUR)
|
$5,000 per slot
|
|
Pioneer Status
|
N10,000.00
|
e.
Technical Committee on Business Approvals
A
committee of NIPC has been constituted to consider and grant or reject
applications for business permit, pioneer status and expatriate quota within 14
days. The committee is headed by
the Executive Secretary.
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