Investing in NigeriaA Strategy Guide

Country Snapshot• Official Name:

Federal Republic of Nigeria

• Capital and Seat of Government: Abuja (approx. 2.2m residents)

• Form of Government: Federal Republic. Presidential Democracy

• Area: Approx. 923.800 sq km

• Population: 2012, approx. 166.2 million (annual growth rate of 7.46%)

• Religious Groups: Muslims (50%). Christians (40%), indigenous religions (10%)

• Languages: English (official), Hausa. Yoruba, Igbo, Fulani

• Currency Naira: NGN = 100 Kobo: 159.4 NGN = 1USD: 217.87 NGN = 1 EUR (Jan 2014)

• Ranked 30th in terms of GDP in the world ($522.18 bn as 2014 estimate)

Major Cities

Lagos Kano Abuja Port Harcourt

Manufacturing

•Contributes to 6.3% of GDP

•Most suffering industry due to lack of power supply

•Govt. investing heavily now, in 2012 invested US$ 4.2 bn

•53% of demand is met by imports from China, France, US, UK

Solid Minerals

•Less than 2% of GDP•Major Solid minerals inlude coal, lead, zinc

•Heavily ignored sector due to Oil mining

•100 % FDI•Now reforms are made under Nigeria’s Minerals and Mining Act, 2007

Construction

•Fastest growing market in the world, around 6.2%

•Accounts for 4.3% of GDP

•Heavy Govt expenditure on Infrastructure is boosting its growth

•Much more investment is expected in the future

Agriculture

•Contribute 36% of GDP•Employs 60% of the workforce

•Major goods are yams, cassava, peanuts, millets and rice

•Major importers are UK, US, Canada, Germany, France

Nigeria: Industry Overview

Energy

•9 bn tons oil reserves•5.2 tn cubic meters of Natural Gas

•Accounts for 72% of revenue

•95% of Foreign Exchange

•10% of world’s LNG production

•NNPC, Total, Elf, ExxonMobil are the major players

Banking & Finance

•Regulated by CBN•Operates under Banking Ordinance Act, Nigeria 1952

•However, effectively controlled after 2009

•Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank are some major players

Telecoms

•8th fastest growing market in world

•Attracted $26 bn since 2001

•Teledensity reached to 67.2 % in 2012

•Regulated by Nigerian Communications Commission

Transportation

•Controlled by Infrastructure Concession and Regulatory Commission (ICRC)

•Air traffic increased by 21% in 2012

•Cargo movement grew by 62.3%

•Air France, BA, Emirates are the major players

Major Industries

Major Industries

A sea of Solid Minerals• Large Amount of Minerals are yet to be fully explored.

• Pro-mining reforms

• 100% FDI

• The new national solid mineral policy.

• Year 2007 - “Mining Year”(Enacted Minerals & mines act)

• Reforms in Power Sector

• A large community of skilled geoscientists and engineers

• The World Bank is supporting the government by providing finance for the Sustainable Management of Mineral Resources (SMMR) project.

• The exchange control regulations have been liberalised to ensure a free flow of international finance.

TALC Estimated reserve of over 100

mn tones of talc obtained in Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.

IRON ORE Over 3 billion tones of iron ore

found in Kogi, Enugu, Niger, Zamfara & Kaduna States are yet to be fully explored.

BITUMEN About 42 billion tones – almost

twice the amount of existing reserves of crude petroleum.

Solid Minerals

ROCK SALT Salt springs at Awe (Plateau

State), Abakaliki (Enugu State) and Uburu (Imo State), while rock salt is available in Benue State. Total reserve of 1.5 bn tones has been indicated

GYPSUM About one billion tones of

gypsum deposits are spread over many states in Nigeria.

LEAD/ZINCEstimated 10 mn tons of

lead/zinc veins spread over eight States in Nigeria

KAOLINAn estimated reserve of 3

billion tonnes of good kaolinitic clays has been identified.

COAL There are nearly 4.00 billion

tonnes of indicated reserves in 17 identified coalfields.

•Formulated in 1995

•Instrumental in setting Nigeria’s investment policy

•Main aim is to encourage ,promote investment in Nigeria

NIPC

•Policy adopted by Nigerian government in 1998

•40% will be retained by government,40% for strategic investors and 20% will be sold to the Nigerian public

Privatization

•Deals with enforcement of laws to combat economical and financial crimes

•Pivotal for attaining corporate governance in Nigeria

EFCC

•Platform for investors to verify contract

•Can be accessed through www.efccnigeria.org

TCP

•Single Window Clearance mechanism

•Any business can be started in maximum 28 days

OSIC

•Formed by president Mr. Jonathan

•Aim is to safe-guard investments in Nigeria

•Improve Nigeria’s global competitiveness ranking

NCCN

Characteristic Measures Taken By Nigerian Government

Major Challenges

Project Funding

• However, the progress made in the regulatory reform, so far, is expected to stimulate activities

Administrative Delays

• Though under the mining Act. Of the country 28 days one-stop concept is introduced.

Infrastructure

• The ongoing privatization of the national utility & reform of the power sector are stimuli for private

Security

• The Niger Delta area of the country is now a peaceful region following the success of the on-going amnesty programme.

Political Interference

• However, the political situation in the country is stabilizing & good fiscal and tax incentives are being put in place to promote mining

Illegal Mining

• However, with the enactment of the Mining Act, foreign investors are guaranteed unfettered operation of their legitimate business in the country.

Thank You!!