WHY INVEST IN NIGERIA?

Transcription

1 WHY INVEST IN NIGERIA? A KEYNOTE PRESENTATION BY WOFAI SAMUEL. At: West Africa Trade & Investment Trip - Nigeria Investment Meeting Eko Hotels and Suites, Victoria Island - Lagos. October 29th, 2018

2 CONTENT * Profile of Nigeria * Comparative Advantage of Nigeria in - terms of Investment * Analysis of Foreign Capital into Nigeria * Sectors to Invest in Nigeria Investment Opportunities * Success Stories - Investment Trends * Policy Trust of Government * Framework for doing business in Nigeria * Strategic Role of Business Policy Regulators in the Nigerian Economy * Investment Incentives * Risk for Investors * Conclusion / Reference

3 PROFILE OF NIGERIA. LOCATION OF NIGERIA IN AFRICA Nigeria is situated on the west coast of Africa, lies on latitudes 4 north of the Equator and latitudes 3 and 14 on the east of the Greenwich Meridian. Shares boundaries with The Republics of Benin and Niger in the west, Cameroon in the East, Niger and Chad in the north and the Gulf of Guinea in the South Area: 923,768.64sq. Kilometers Capital: Abuja Currency: Naira Time: GMT + 1Hour Political Structure: Three-tier structure: A Federal Government, Federal Capital Territory and 774 Local Governments Population: About Million People Consisting of 374 ethical groups with Hausa, Igbo Yoruba constituting the major languages Official Language: English

4 COMPARATIVE ADVANTAGE OF NIGERIA IN - TERMS OF INVESTMENT; NIGERIA TODAY, IS ONE OF THE MOST ATTRACTIVE AND PROMISING EMERGING MARKETS GLOBALLY MAINLY BECAUSE OF ITS : 1) Strategic Location - Hub of the West and Central African Markets. 2) Abundant Natural Resources 3) Commitment to enhancing favorable business environment 4) Policy Environment, Supportive of private entrepreneurship 5) Very strong financial system 6)Competitive sectors industries 7) Trainable & Cost Effective workforce with 60% as youths in Africa 8) High return on Investment (ROI) 35-45% 9) Political & Economic stability with sound macro - economic management 10)Rule of law anchored on good governance, transparency, accountability and zero tolerance for corruption.

5 ANALYSIS OF FOREIGN DIRECT INVESTMENT INTO NIGERIA; In the first quarter of 2018, the Investment inflow into Nigeria rose to $6.3bn according to records released by the National Bureau of Statistics. This increase in capital inflow in Q was driven mainly by portfolio investment, which grew from $3.47bn in the previous quarter to $4.56bn, accounting for 72.42%of the total capital importation during the quarter. Further analysis of the report showed that Foreign Direct Investment stood at $246.62m, dropping by 34.83% from the figure reported in the previous quarter, and growing by 16.67%on a year-on-year basis.

6 WHY NIGERIA? * The immediate past-recession period when the fundamentals of the economy are at the early stages of recovery is the best time to invest in Nigeria. * Latest data on the economy released by the statistics agency showed gross domestic product (GDP) growth improved consistently since the third quarter of 2016 from per cent to about 2.11 per cent. * Trade balance and balance of payments have remained positive, while exchange rates have been stable, with foreign reserves at about $48 billion as at May 18. * Capital importation in 2018 has maintained the increasing trend set in 2017 over 2016, with inflows at over 500 per cent higher than in the first quarter of this year. As these signs of recovery have emerged, foreign investment flows have started to return * In Q when the country s exit from recession was announced, significant portfolio investment inflow was immediately recorded

7 COMPETITIVE ADVANTAGE STRATEGIC LOCATION: * Nigeria is advantageously located in the Gulf of Guinea with direct flight access to America (North & South) and Europe * Easy access to the developed markets of North America and Europe, which have a combined GDP of over US$43 trillion * An extensive network of transport routes that links the country to neighbouring countries like Niger, Chad, Cameroun, and Benin Republic * A total of 54 airports (40 with paved runways, 14 with unpaved runways * Abundant Land and Water Resources * Competitive Labour Costs and Abundant Human Capital * Nigeria has a young and dynamic population of over 70 million persons within the ages of 15 to 35

8 STRATEGIC AND PRIORITY INVESTMENT OPPORTUNITIES. The past year has been one of economic progress for Nigeria, with Africa s largest economy managing to crawl back into growth territory in the second quarter of The Nigerian government has realized that they need to make the country as attractive and lucrative as possible for offshore investors to bring their capital, skills and business trade into the country, thus, provided tax holidays to pioneer companies, who are engaged in the production of export goods, establishing new industries, or expanding production in vital sectors of the economy.

9 MANUFACTURING Nigeria s population is an estimated million people. This population suggests a massive potential workforce as well as a consumer base. For a manufacturer, this is an ideal scenario to have potential customers and consumers. The Nigerian government is eager to expand the manufacturing capability in the country, and to that end, they are offering incentives for manufacturers that are able to locally source their raw materials.

10 INFORMATION AND COMMUNICATION TECHNOLOGY Nigeria is one of the fastest growing countries with internet users in the world. According to The Nigerian Communications Commission, internet users increased marginally to 98.3million in November, This is an increase of nearly 50 percent from the 2013 figure of 51.8 million. By tapping into the underdeveloped skills of the Nigerian youth, there are countless opportunities for new economy companies to develop technology leaders of the future in Nigeria and in the rest of West Africa.

11 AGRICULTURE Nigeria has over 84 million hectares of arable land, of which only 40% is cultivated; Nigeria is the world s largest producer of Cassava and the fourth largest producer of groundnut. - Also, Nigeria is the fourth largest cocoa producer in the Agriculture presents a US$7.76 billion opportunity in import substitution (15 percent of total import. Nigeria is the second largest producer of citrus in the world, and the largest producer of pineapple, mangoes, and tomatoes in Africa. GDP from agriculture in Nigeria is expected to be 465, NGN million. Investment in agriculture is relatively a low-risk portfolio diversification;

12 MINERAL PROSPECTING AND MINING Although Nigeria is blessed with an abundant amount of diverse mineral resources, not all the minerals are available in commercial quantities. As part of the strategies to reform the sector, the Ministry of Solid Minerals Development (MSMD) has identified seven strategic minerals, namely: Coal, Bitumen, Limestone, Iron Ore, Barites, Gold and Lead/Zinc for priority development.

13 MINERAL ORE SALES There is a ready local and international market for mineral ores. The international market is mostly controlled by China, and can yield high profits for an investor

14 HEALTH CARE A myriad of investment opportunities exists across the healthcare value chain in Nigeria. Investors interested in taking advantage of these opportunities will benefit from taking a long-term view of the market and keeping in consideration the dynamics of healthcare investment in developing nations. Investment opportunities include: Specialist hospitals, Diagnostic and Trauma Centres, Ambulance Services, Mobile Clinics, Pharmaceutical manufacturing, Smallholder specialist clinics among others

15 POWER With a population of over 183 million people and a population growth rate of 2.7 percent per annum, the demand for power in Nigeria can only be expected to rise. Presently, Nigeria has an installed electricity generation capacity of 12,522 megawatts; 10,592 megawatts is gas fired and 1,930 megawatts is from hydro. Nigerians self-generate a significant portion of their electricity, at a cost that is greater than twice the cost of grid-based power. Power Generation: On-grid and Off-grid Power Distribution

16 BUSINESS REGISTRATION PROCEDURES 1. FORMS OF BUSINESS REGISTRATION The following vehicles of investment may be considered for establishing a business enterprise in Nigeria. i. SOLE PROPRIETORSHIP: ii. PARTNERSHIPS: iii. INCORPORATED COMPANIES 2. REQUIRED REGISTRATIONS, AUTHORISATIONS AND APPROVALS Some of these are; i. The Nigeria Investment Promotion Commission (NIPC) ii. The Corporate Affairs Commission (CAC) iii. The Nigeria Immigration Service (NIS) iv. The Nigeria Customs Service (NCS) v. The Federal Inland Revenue Service (FIRS) vi. The National Office for Technology Acquisition and Promotion (NOTAP) vii. The Federal Capital Territory (FCT) viii. The National Agency for Food, Drugs Administration and Control (NAFDAC) ix. The Central Bank of Nigeria (CBN) x. The Bureau of Statistics xi. The Federal Ministry of Solid Minerals Development xii. The Federal Ministry of Finance xiii. The Standard Organisation of Nigeria (SON)

17 Taxes And Levies Taxes in Nigeria are levied along the three tiers of government i.e. the Federal Government, the State Governments and the Local Governments Investment Incentives Pioneer Status (tax holiday) granted for 3 years and renewed for the next two years 100 percent repatriation of profit net of taxes Capital allowance not restricted. Granted in full - 100% Interest Drawback Program Fund:

18 RISKS FOR INVESTORS Reform delays Previous patterns of policymaking in the run-up to elections in Nigeria suggest that it is unlikely that the government will pass major reforms in the coming year. As politicians bunker down for typically contentious campaigns, analysts predict that political capital will be used to support election bids.

19 Wofai Samuel, International Media Personality & Pundit. LinkedIn & Facebook : Wofai Samuel Instagram &