Business and our Economy

Nigeria is a country endowed with arable land and abundant natural resources.

Government policy has been directed towards ensuring that what nature has provided is harnessed and utilized to the fullest, for the benefit of the citizenry. The thrust of the nation’s current economic development policy is as enunciated in the VISION 2010 Report which is: 
To make Nigeria a major industrial nation and economic power that continually strive for sustained economic growth and development towards the quality of life for all Nigerians.

This will be achieved through:

  • Development of a strong public and private sector partnership which fosters a strong economy that is private sector-driven with the government as the enabler;
  • Enhancement of exploitation of the nation’s hydrocarbon, agricultural and mineral resources, tourism and sporting talents;
  • Promotion of entrepreneurship and competition within the ambit of fair, equitable and enforceable laws;
  • Massive investment in education, health, technology and infrastructure;
  • Involvement of the community in projects from conceptualization through execution to maintenance;
  • Movement towards export-oriented production manufacturing and industrial sectors;
  • Promotion of indigenous entrepreneurship and building of a strong and viable indigenous private sector; and
  • Opening up the economy to participation by more indigenous and foreign investors.

The realization of these aspirations, had informed the radical and pragmatic economic reforms introduced since the mid 1980’s. The reforms were designed to increase the attractiveness of Nigeria's investment opportunities and foster the growing confidence in the economy. The reforms resulted in the adoption of liberal and market oriented economic policies, the stimulation of increased private sector participation and elimination of bureaucratic obstacles which hinder private sector investment and long term profitable business operations in Nigeria. Some of the significant legislation are as follows:

1. The Nigeria Industrial Revolution Plan (NIRP)
NIRP constitutes the nation’s first strategic, comprehensive, and integrated roadmap to industrialization. The plan focuses on developing sectors, where Nigeria has a natural comparative advantage, and creating an enabling environment through reducing the current major barriers to development. The sectors identified as priority are agribusiness, solid minerals, and oil & gas sectors, and the enablers targeted by NIRP are financing, skills development, innovation, infrastructure, business environment, enforcement of adherence to standards, and increased local patronage. The completed first phase of NIRP has focused on delivering an actionable plan specifically for six sub-sectors within the priority sectors: palm oil, textiles, basic metals, automotive, base petrochemicals, and plastics & rubber subsectors. Furthermore, a deep dive has been completed on financing and skills development as priority enablers. Read more

2. Nigerian Investment Promotion Decree No. 16 of 1995:
This decree completely eliminates all quantitative and qualitative and barriers to free investment in the the country particularly for foreign investor. The provisions of the Decree allows foreign investors to buy unlimited shares of the quoted companies through the Nigerian Stock Exchange in any convertible currency and also 100% equity ownership of business is allowed. The decree establishes the Commission as one-stop-agency which facilitates investment location and provides the investor access to profitable business ventures and granting of necessary pre-investment approvals. The Nigerian Investment Promotion Commission, NIPC Decree repealed the Industrial Development Coordination Committee (IDCC) Decree No. 36 of 1988 and the Nigerian Enterprises Promotion Decree (NEPD) of 1972 as amended in 1977 and 1989 which hitherto reserved for Nigerians the ownership of certain business.

3. Foreign Exchange (Monitoring and Miscellaneous Provision) Decree No. 17 of 1995:
This Decree abolishes all restrictions on importation of Foreign and repatriation of dividends. The operation of the Autonomous Foreign Exchange Market as provided for in the Decree, liberalized the FEM operations. The Decree repealed the Exchange Control Act No. 16 of 1962 in its entirety.

4. Securities and Exchange Commission Act of 1979:
This empowers only the commission to regulate the capital market and determine the price, amount and time which securities of all public companies and enterprises having alien interests are sold to the public whether by offer for sale or subscription. Foreign investors would be allowed to participate in quoted and bond transactions on the Nigerian Stock Exchange without any restriction.

5. Privatization and Commercialization Decree No. 25 of 1988 as amended in Decree No. 28 of 1999 (Government Notice no. 70):
The privatization and commercialization provided for the divestment of Government’s interest in some public enterprises which are best suited for private sector management. The law also stopped further injection of government funds into enterprises that could be better operated on commercial bases.

Exchange Control Regulations
 
Regulation of Capital, profit and dividends are allowed, while technical fees and royalties on imported technical services and technologies are payable. Repatriation of proceeds from disposal of assets is allowed. Foreign Exchange Transactions are carried out at the Autonomous Foreign Exchange Market.

The Nigerian Financial System
 
The Nigerian Financial System comprises the regulatory/supervisory authorities, banks and “other” financial institutions. The regulatory/ supervisory authorities are the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Federal Ministry of Finance (FMF), the Nigerian Insurance Supervisory Board (NISB) and the Federal Mortgage Bank of Nigeria (FMBN). There are several commercial and merchant banks in providing fast and efficient financial services to their clients.

Protection of Industrial Investment and International Trade Business
 
Nigeria’s membership of the World Bank’s Multi-lateral Investment Guarantee Agency (M.1. G. A) as well as the operation of the bilateral Investment Promotion and Protection Agreement (I.P.P.A) between Nigeria and any interested party country, make for adequate protection of foreign investment in Nigeria. The instrumentality of the Patents and Design Decree of 1970 affords protection and transfer-ability of shares of joint owners of a patent or design registered in Nigeria; while that of the Trade Mark Act of 1956 affords protection of the exclusive right of a proprietor of a trade mark.