NIGERIA AS AN ATTRACTIVE INVESTMENT DESTINATION · Budget (2018) N1.9trn /$6.5bn Household Consumption (2017) 10 of 37 12 of 37 7 of 37 5 of 37 Starting a Business Sources: National

Yewande SadikuExecutive Secretary/CEO

London | 06 November 2019

NIGERIA AS AN ATTRACTIVE INVESTMENT DESTINATION

NIGERIA Investment Showcase

What investors tell us

3

Investor feedback (no particular order)

“poor private sector engagement in policy formulation”

“painful, long, unpredictable government approval process”

“corruption: you can’t get anything done without paying a bribe”

“difficult operating conditions: erratic power, bad roads, poor public utilities”

“lack of skilled labour, poor work ethic”

“government policy flip flop, changing rules without notice”

“government is anti-big business”

“corrupt judiciary; too many sacred cows”

“meeting with senior government officials cancelled after investor’s arrival”

“everything is smuggled in; borders are too porous, so tariff measures never work”

“multiple taxes by federal and state agents”

“announced tariffs not enforced”

“road to Apapa port costs us millions per day”

“difficulty with getting visas”

“insufficient investment incentives”

“access to long term capital is challenging”

Government harasses existing investors”

“high cost of doing business”

4

Africa’s investment attractiveness

Source: EY’s 2015 Africa Attractiveness Survey

Biggest draws: natural resources, high growth rates

and large domestic markets…

…yet concerns about business

environment persist

Nigeria has 4 of the 5 key factors investors look for in its favour

5

Africa’s perceived barriers to investment…

Source: EY’s 2015 Africa Attractiveness Survey

Business environment is most important barrier…

… incentives are least important barrier

Nigeria in context

7

Nigeria in context

Sources: National Bureau of Statistics (2018 estimates), http://www.data.worldbank.org

Top

5To

p 5

Smallest

Smal

lest

Population (m)

Total: 192.4m

Botswana 2.3

Rwanda 12 .2

Israel 8.7

Sierra Leone 7.5

Land size (km2)

Total: 910,710 km2

Panama 74, 340

Luxembourg 2,590

Croatia 55,960

Dominican Republic 48,310

Ireland 68,890

Bayelsa2.3

Kano 13.0

Oyo 7.7

Katsina7.7

Kaduna 8.2

Lagos 12.4

Lagos 3,671

Borno72,609

Niger 68,925

Bauchi49,119

Taraba56,282

Yobe46,609

Most populated regionNorth-West 48.7m

Largest regionNorth-East: 280,419 km2

Smallest regionSouth-East: 28,987 km2

Least populated regionSouth-East: 20.6m

Denmark 42, 262

Spain 46.6m Italy 294,140 km2

Sri Lanka 21.4m Rwanda 26,338 km2

Business environment reforms

9

Business case for improving business operating conditions

Strong correlation between economic prosperity and ease of doing business

R² = 0.4918

100

1,000

10,000

100,000

020406080100120140160180200

Income per capita (log scale) USD per person per year

# of Objs = 185

Nigeria

Brazil

South Africa

USA

Singapore

Norway

Doing Business Rank (2020)

Source: World Bank Doing Business Report 2020

10

Many governments committed to business environment improvements

Latin America & the Caribbean

40 reforms

Middle East &North Africa57 reforms

Europe & Central Asia56 reforms

Sub-Saharan Africa

73 reforms

South Asia17 reforms

East Asia &the Pacific33 reforms


115 economies implemented 294 regulatory reforms across 10 areas

Most improved economies:Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan,

Kuwait, China, India and Nigeria

11

Correlation of entrepreneurship growth to ease of doing business


12

Correlation of GDP growth to ease of doing business

Source: EY Africa Attractiveness Report, September 2019

Ranked 13 in EoDB

globally. #1 in AfricaRanked 38 in EoDB

globally. #2 in Africa

Ranked 131 in EoDB


Ranked 56 in EoDB


13

Relatively strong correlation between FDI and growth

Source: EY Africa Attractiveness Report, September 2019

14

In Nigeria, highest level commitment to ease of doing business reforms

Launch

No of announced reforms

No of initiativesParticipating

agenciesSuccess rate

February 2017 8 22 12 72%

October 2017 11 22 29 52%

February 2018 9 28 26 68%

Presidential Enabling Business Environment Council (PEBEC) inaugurated in July 2016

Remove critical bottlenecks

and bureaucratic constraints

to doing business in Nigeria

<70

Ranked 70th by 2023

NAP 1.0

NAP 3.0

NAP 2.0

EO 1 May 2017 transparency and improving the business environment

President Muhammadu Buhari, GCFR

Vice President Yemi OsinbajoSAN, GCON

Source: Enabling Business Environment Secretariat Reports

NAP: National Action Plan, EO: Executive Order

NAP 4.0 March 2019 deepen reforms and drive sustainability and institutionalization

Latest initiative

15

Starting a business

Dealing with construction permits

Getting electricity

Registering property

Getting credit

Paying taxes

Enforcing contracts

Protecting minority investors

Trading across borders

Resolving insolvency

105/ 190

55/ 190

169/ 190

183/ 190

15/ 190

28/ 190

159/ 190

179/ 190

73/ 190

148/ 190

+5

+94

+2

+1

-3

+10

+32018

2017

2016

145/ 190

169/ 190

170/ 189

+24

+1

0

Rank Difference

2020 DB Ranking

Rank Difference

DB Year

Source: World Bank, Doing Business 2020

Nigeria’s ease of doing business ranking improved by 15 steps and 4.01 points

2019 146/ 190 -1

*DTF

52.89

51.52

44.63

44.69

* 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

Difference

+1.37

+6.89

-0.06

+1.14

Improved ease of doing business ranking: Nigeria (131/190)

… positive national doing

business score …

-2

+20

+1

2020 131/ 190 56.9 +4.01+15

16

Subnational reforms equally important

… positive subnational

doing business scores

Lagos

BayelsaRivers

Imo Abia

AkwaIbom

Adamawa

Bauchi

GombeKaduna

FCT

Nassarawa

Plateau

Taraba

Benue

CrossRiver

Enu

gu

Ebonyi

An

amb

ra

Delta

Edo

Kogi

Oyo

Ogun

Osun Ekiti

Ondo

Kwara

Niger

Sokoto

KebbiZamfara

Katsina

Kano

YobeJigawa

Borno

Source: World Bank, Doing Business in Nigeria 2018

In the past 4 years, 29 Nigerian states implemented

43 reforms across the four areas benchmarked.

Kaduna, Enugu, Abia, Lagos and Anambra showed the

largest advance toward the global good practice frontier

Proactive investment promotion

18

Functions Reactive Proactive

1 Co-ordinate and monitor all investment promotion activities

2 Initiate and support measures to enhance the investment climate in Nigeria

3 Promote investments in and outside Nigeria through effective promotional means

4Analyse and disseminate information about investment opportunities and sources of investment capital

5 Register and keep records of all enterprises to which this Act applies

6 Identify specific projects and invite interested investors for participation in those projects

7 Participate in promotional activities for the stimulation of investments

8 Maintain liaison between investors and government agencies

9 Provide and disseminate up-to-date information on incentives available to investors

10 Assist incoming and existing investors by providing support services

11 Evaluate the impact of investments in Nigeria and make appropriate recommendations

12 Advise the Federal Government on policy matters designed to promote economic development

NIPC: moving from reactive to proactive mandate delivery

19

Targeted investment promotion

Improvements in subnational business

environment Strategic insights into States’ competitive

advantages

Sector-focused strategies

Strategic relationships with target countries

Coordinated investor engagements with

States

Proactive investment facilitation

Proactive investment promotion

20UNECA – United Nations Economic Commission for AfricaUNCTAD – United Nations Conference on Trade and Development

iGuide Nigeria

An easy-to-use online investment guide that provides investors with up-to-date and pertinent 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 and opportunities

The information will enable investors to make better informed decisions on Nigeria as a preferred investment destination

Available at:

www.theiguides.org/nigeria

www.nipc.gov.ng

http://www.theiguides.org/nigeria

http://www.nipc.gov.ng/

21

Compendium of Investment Incentives in Nigeria

Compilation of fiscal incentives in Nigerian tax laws and duly approved sector-specific incentives

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

http://www.nipc.gov.ng/

22

Objective

Result: Tier 1 strategic investment promotion countries

Investment sources (Global, Africa & Nigeria)

Countries that have trade relations (import and export) with Nigeria

Countries with capacity to support Nigeria with world class investments in the priority sectors

Countries that have strategically decided to make outward investments

Countries with which Nigeria has a strategic relationship, such as having signed a Bilateral Investment Agreement

Approach

WIP: Country-focused investment promotion strategy

China NetherlandsGermanyFrance

United Kingdom

Japan

South Africa

India Italy

SpainSouth Korea SwitzerlandSingapore United Arab Emirates

CanadaBelgium

Saudi Arabia

Malaysia

United StatesRussia

23

1 of 37 17 of 37

Investment Opportunities

Doing Business Ranking(2018)

Registering Property

Dealing with Construction

Permits

Enforcing Contracts

1 of 37

Kaduna StateC

en

tre

of

Lear

nin

g

Capital Kaduna

Land Area 42,481 km2 [6 of 37]

Population (2017E) 8,216,037 [3 of 37]

Demography

0-14: 3,791,172 [41%]

15-64: 4,191,018 [56%]

65+: 233,847 [3%]

Labour force 3,258,609 [6 of 37]

Climate Tropical savanna

Topography Shrubs and grasses, loamy, sandy and clay

Competitive AdvantagesN29.5bn/$96.5m

IGR (2018)

N216.6bn/$710mBudget (2018)

N1.9trn /$6.5bn

Household Consumption (2017)

10 of 37

12 of 37

7 of 37

5 of 37

Starting a Business

Sources: National Bureau of Statistics, World Bank Report on Doing Business in Nigeria 2018climate-data.org, Kaduna State GovernmentExchange rate= $1/N305 (Central Bank of Nigeria)

Transportation

Housing Ginger Agro alliedLogistics

MaizeRenewableenergy

Tourism Livestock

ICT

Domestic Airport Yes

International Airport Yes

Railway Station Yes

Dryport Yes

For further details

Abbreviations: NICPS: Nigerian Investment Certification Programme for States IGR: Internal Generated Revenue

• Major economic and industrial centre• Largest producer of ginger in Nigeria • Efficient transportation infrastructure (road, rail and

airport)• Efficient land management system (30 days processing

time)• High graphite deposits• 19+ deposits of solid minerals (Gold, Iron Ore,

Graphite, Granite, Gemstones

Did you know?NIGERIAN INVESTMENT PROMOTION [email protected]

KADUNA STATE INVESTMENT PROMOTION [email protected]

State Investment Certification

Process Ongoing

British James Bond actress FionaFullerton was born in AnguwanSarki, Kaduna

Sorghum

Tomato

Soyabean

mailto:[email protected]

mailto:[email protected]

24

WIP: OSIC Lab

Investor raises issue

Investor advised of resolution

Increase confidence in business

environment

Drive practical policy reforms

Encourage continued investment/protect

existing jobs

Encourage new and existing

investorsProtect existing

investments/jobs and encourage new

investments/jobs

Transparent platform for speedy resolution of investment related issues

3 weeks

Comprehensive all-of-government

solution agreed

OSIC Lab meeting called

MDAs hear investor’s issues

together

Members include…

Tracking investment announcements

26

Investment announcements, Q1 - Q3 2019

Q1 by source Q3 by sourceQ2 by source

Nigeria US$9.05bn 97.5%

USA US$0.13bn 1.4%

Malaysia US$0.1bn 1.1%

Multiple Sources

US$0.004bn 0.05%

Netherlands US$10.0bn 78.7%

Morocco US$1.5bn 11.8%

Malaysia US$0.9bn 7.1%


Others US$0.2bn 1.6%


Morocco US$0.6bn 24.6%

USA US$0.3bn 11.1%

Belgium US$0.2bn 6.2%


US$9.3bn in 13 Projects across 4 States + Offshore

US$12.7bn in 24 projects across 8 States + Offshore

US$2.4bn in 19 projects across 4 States + FCT & Offshore

27

Investment announcements, Q1 - Q3 2019

Q1 by destination Q3 by destinationQ2 by destination

Offshore US$8.15bn 87.7%

Lagos US$0.04bn 0.4%

Kaduna US$0.01bn 0.1%

Anambra US$0.001bn 0.01%


Offshore US$10.9bn 86%


Ogun US$0.01bn 0.1%

Kaduna US$0.01bn 0.1%

Others US$12.4bn 12%

Ondo US$1.1bn 45.2%

Offshore US$0.7bn 28.7%


Ogun US$0.2bn 6.2%


US$9.3bn in 13 Projects across 4 States + Offshore

US$12.7bn in 24 projects across 8 States + Offshore

US$2.4bn in 19 projects across 4 States + FCT & Offshore

28

Investment announcements, 2018 vs 2019

29.55 29.55 29.55 29.55

90.9

12.71 12.71 12.71

16.18 16.18 16.18 16.18

2.44 2.44

27.34

73.07

27.34

9.29

24.44

17.82

Q1 2018 Q2 2018 Q3 2018 Q1-3 2018 Q4 2018 Q1-Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q1-3 2019

US$ billion

56 Projects across 12 States + FCT & Offshore65 Projects across 16 States + FCT & Offshore

Nigeria-UK relations

30

Nigeria – United Kingdom relations

Sources: United Nations World Population Prospects; World Development Indicators, World Bank Doing Business (EoDB) Report 2018; Global Competitiveness Index (GCI) 2018-2019; CIA World Factbook, Trade Map

Comparative statistics

Population estimates (m)

GDP ($’ bn)

181

411

65 75

2015 2020 2025 2030 2035 2040 2045 2050

Nigeria United Kingdom

0.4%

Age 15-64

61%

57%

568 481 404 376 397

3,0352,896

2,659 2,6382,825

2014 2015 2016 2017 2018

Nigeria United Kingdom

Sources: United Nations World Population Prospects; World Development Indicators, World Bank Doing Business (EoDB) Report 2018; Global Competitiveness Index (GCI) 2018-2019; CIA World Factbook, Trade Map

NIGERIA UNITED KINGDOM

Capital Abuja London

Official Language English English

Land Area 910,770 km² 241,930 km²

People (2018)

Population (m) 196 67

Economically active pop. (15-64) 105m 42m

Population growth rate (%) 2.6 0.7

Median age 18.4 40.5

Economy (2018)

GDP nominal ($’ bn) 397 2,825

Agriculture (% GDP) 21.1 0.7

Industries (% GDP) 22.5 20.2

Services (% GDP) 56.4 79.2

GDP growth rate (%) 1.9 1.4

GDP per capital ($) 2,028 42,491

Inflation (%) 12.1 2.3

Labour (2018)

Labour force (% of pop.) 61m (31) 33m (49)

Trade (2018)

Import $’ bn, (% of GDP) 37 (11) 670 (24)

Export $’ bn, (% of GDP ) 53 (13) 487 (17)

Trade balance $’ bn (% of GDP) 17 (1) -183 (<0)

Investment Climate (2018)

EoDB 146 9

GCI 115 8

31

Why UK?

#1

investor in services

#2

investor in solid

minerals

#2

investor in

manufacturing

#5

global investor

#6

investor in Agriculture#4

investor in Africa

Nigeria’s #9

import partner

Nigeria’s #9

export partner

Top 10

investor in Nigeria

About NIPC

33

NIPC was established by the NIPC Act* in 1995 to encourage, promote and co-ordinate investments in Nigeria

• Promote Nigeria as an attractive investment destination

• Provide information on investment opportunities and capital sourcesProject Attractive Investment Image

• Promote investments in Nigeria, by Nigerians and non-Nigerians

• Co-ordinate all investment promotion activities in Nigeria

Investment Promotion

• 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

Investment Facilitation

• 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

Policy Advocacy

NIPC’s principal functions

*Nigerian Investment Promotion Act, Chapter N117 Laws of the Federation of Nigeria 2004

(Decree No 16 of 1995)

34

Investor Obligation and Protections in the NIPC Act

ICSID = International Centre for Settlement of Investment Disputes

Registration Obligation

•Enterprises in which foreigners can participate are required to register with NIPC before commencing business

Ownership

•Nigerians and foreigners can invest in any sector, except for those on the negative list

•No restriction on foreign percentage ownership

Guarantees

•Government will not nationalize or expropriate any enterprise

•Right of access to courts and fair and adequate compensation if acquisition is in national interest/for public purpose

•No restriction on repatriation by foreigners of investment returns or sale proceeds through an authorized dealer

Dispute Resolution

•Amicable resolution by mutual discussion or arbitration of investor/government disputes

•Provisions of any Bilateral Treaty with the investor’s country will apply

•Right of recourse to international arbitration under ICSID Rules

35

One-Stop Investment Centre (OSIC) at NIPC

▪ Houses 27 agencies to facilitate investments and reduce time required to process regulatory approvals and permits

▪ Provides assistance with information and requirements from incorporation to expansion

▪ Also facilitates business visa issuance

Sample business

entry scenarios

Software development and creative industry

Drug Manufacturing for export

Type of Business Generic Agencies Specific/Sector Agencies

PowerGeneration

36

◼ The NIPC Act empowers NIPC 1995 to encourage, promote and co-ordinate investments in Nigeria

Accordingly, NIPC is happy to:

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 in Nigeria

Facilitate investor input into the policy making process

What NIPC can do for investors

37

Award for transparency and compliance: NIPC ranked 2nd in 2019

Disclosure of public records and information ranking

2018

2017

2016

Year

017/ 187

075/ 166

090/ 131

RankProactiveDisclosure

Responsiveness to request for information

Level of Disclosure

2016 – 2018 Ranking

Source: http://procurementmonitor.org/foi-ranking/Home/nationalDefinitions: Basic Right Watch (BRW), BudgIT, Connected Development (CODE), Media Rights Agenda

(MRA), Public & Private Development Centre (PPDC) and Right to Know (R2K)

Full/timely implementation Partial/delayed implementation No implementation

BRW

CODE

PPDC

BUDGIT

MRA

Responsiveness to request for information

Level of disclosure FOI training

Proactive Disclosure

FOI Desk Officers

FOI Annual Report

2019 Ranking: 2nd of 191 MDAs

2019 002/ 191

Rank

http://procurementmonitor.org/foi-ranking/Home/national

38

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

Large growingpopulation

Sophisticated financial markets

Improving businessclimate

Strategic location Generous investor protections

Abundant natural resources

Large tech-savvy population Young, energetic, entrepreneurial population

Generous investment incentives

Growing middle class

Resilient, hard-working “can-do” spirit

An essential component of every Africa strategy

Optimistic mobile population Large population of consumers

Strategic time zoneGMT +1

Fast growthprojections

Abundant economicopportunities

3rd most populous country by 2050

Largest economy by 2050

Language:English

Private sector-led economy

Two decades of political stability

Huge unfilled demand Home to many large localand international brands

Favourable weather

14th

₦

Plot 1181 Aguiyi Ironsi Street Maitama District

Abuja

[email protected]@nipc.gov.ng

www.nipc.gov.ng

For further details, please contact us

Yewande SadikuExecutive Secretary/CEO

Subscribe to the NIPC Newsletterhttp://eepurl.com/dkvoU1

Investment informationwww.theiguides.org/nigeria

NIGERIA AS AN ATTRACTIVE INVESTMENT DESTINATION · Budget (2018) N1.9trn /$6.5bn Household Consumption (2017) 10 of 37 12 of 37 7 of 37 5 of 37 Starting a Business Sources: National

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