TRAhl$FoRttlING   NLffi   ERIA: PPPORTUNIHES ANP  CHALLE,NGES.    A PAPER,PRESENTED,FY THEcpNsut -.fiENERAL OF THH FEPERAk...
lntroc,uction       Nigeria, located in the West Coast of Africa, is the most populatedcountry in the continent with over ...
AEriculture.S.    Agricultural production has suffered e setback in Nigeria as aresult of the emergence of crude oil as th...
l.ZSbillion) loan,   at   single digit interest   to large-scale farmers.lncentives in the agricultural sector include the...
are also embedded in the up-coming Petroleum lndustry Bill that willguide operations in the Oil and Gas industry.Iplid Min...
power         is being re-organized and restructured with a view toderegulating and creating companies, specializing in va...
also have funds been earmarked for the textile industry                andmanufacturing in general.Ulban Wa,pJeA3. With an...
therefore welcome for the provision of such services to stem the tide ofparticularly highly placed Nigerians seeking medic...
recreational fishing, lake and river fishing, provision        of   Hotelinfrastructure and surfing.NiBer Delta.;#13. The ...
viii) tiberalization of ownership structure of business;      ix)     reparation of Profits;      x)      guarantees again...
vii) security problems; and     viii) expectation for underserved reward.Bi   l?tgra I Economiq, Af,,fqeme nt39.  To stren...
Upcoming SlideShare
Loading in …5
×

TRANSFORMING NIGERIA: Opportunities and Challenges

700 views

Published on

A paper presented by the Consul-General of the Federal Republic of Nigeria, Atlanta to the forum of American-Nigerian International Chamber of Commerce, Atlanta.

Published in: Technology, Business, Travel
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
700
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
19
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

TRANSFORMING NIGERIA: Opportunities and Challenges

  1. 1. TRAhl$FoRttlING NLffi ERIA: PPPORTUNIHES ANP CHALLE,NGES. A PAPER,PRESENTED,FY THEcpNsut -.fiENERAL OF THH FEPERAk REPUBLIS OF NIGERIA, RtUEtUtR TO THE F-qEUM qr AMEBICAN - NIGERI,AN TNTERNATTqNAL CHAI{IBER OF CgMMERCE ATIANTA" AU,G"UST 23 201,I
  2. 2. lntroc,uction Nigeria, located in the West Coast of Africa, is the most populatedcountry in the continent with over 150 million people, and a growingmiddle class. The large population is indicative of the market value ofthe country on the international scene. Nigeria is also the largestmarket in Africa and the znd largest economy after South Africa. ltsGross Domestic Product (CDP) is over $350 billion and the rate ofinfletion is single digit, et 9.4%. Nigeria has a credit rating of BB- byStandard & Poors, on the seme level with Brazil, Turkey and Ukraine2. The country practices the Presidential System of Governmentunder an Administrative structure of 36 States, a Federal CapitalTerritory and 744 Local Governments- The Government economicagenda is encapsulated in the Vision 2O2A Prograrnme and aTransformational Agenda aimed at making Nigeria one of the 20 biggesteconomies by the year ?020. Government lays emphasis on goodEovernance, accountability and the rule of law.3. Nigerias extant Foreign Policy is predicated on EconomicDiplomacy with focus on attraction of investment for nationaldevelopment. The U.S. is one of the Nigerias closest trading anddevelopment partners in the world.Business OpnprtunitjFq4, The following are some of the areas of foreign investment andbusiness opportunities: agriculture, power, manufacturing, solidminerals exploration, infrastructure, oil & E?s, urban wastemanagement, bonds and loans, tourisrn,/hospitality, healthcare,telecommunication, etc"
  3. 3. AEriculture.S. Agricultural production has suffered e setback in Nigeria as aresult of the emergence of crude oil as the mainstay of the Nigerianeconomy and foreign exchange earner.6. Eighty two million hectares, out of Nigerias total land area of 91.million hectares are arable. Of these, only about 34 million hectares,representing 42% have been cultivated. Unfortunately, today, Nigeriaspends about NL trillion on food import - 635billion ($ 3.9 billion) onwheat; 356 billion ($Z.Z billion) on rice; 2L7 billion ($f.+ billion) onsugar and 97 billion ($.6 billion) on fish.7. One of the priority arees of Government is food security and thedevelopment of the agricultural sector, for the creation of employment,rural development, poverty alleviation and youth empowerment. Thus,vast opportunities exists in the agricultural sector, particularly in theerea of rice production and milling; wheat and fruit juice production (asinvestors can take huge advantages of post-harvest losses of harvestedfruits) and in production of concentrates.8. Other areas for investment are dairy farming (for meat and milk),poultry , animal feeds, Jatropha for the production of bio-fuel, palmproduce; provision of storage facilities; Agro-Allied industries, as wellas the production of cofion, groundnut and rubber.9. lnvestors would have the encouragement of the Federal and StateGovernments as efforts ere on Lend Reforms with a view to providingland on liberal terms for large scale, mechanized agriculture as done fora set of farmers who relocated from Zinnbabwe to Kwara State.10. The Federal Government is also, as a deliberate policy, reviving 42dams and over LZ River Basin authorities in order to ensure all-yearirrigation farming. Equally, there is a provision of NZOO billion ($
  4. 4. l.ZSbillion) loan, at single digit interest to large-scale farmers.lncentives in the agricultural sector include the following:i) a zero duty on agricultural machinery;ii) pioneer status incentive (three years tax holiday) for agro- processing industrY;iii) several export incentives are also available for manufacturers in the agric sector; andiv) several food items have been prohibited from importation in order to encourage local productionOil & 6estt. Oil and gas resources are the mainstay of the Nigerian economy.The sector is the rnajor contrihutor of foreign exchange andgovernment revenue. Nigeria has 36.5 billion barrels of crude oilreserve including condensate, with a gas reserve of 186 trillion cubicfeet. The countny currently produces 2.6 million barrels per day andgas production of 5.8 billion cubic feet per day, 1.4 billion cubic feet ofwhich is flared per day. Nigeria is more of a gas country than an oilcountry.12. The countrys gas reserue is arnong the ten biggest in the worldbut because of lack of adequate infrastructure, the proportion notedabove is flared. The Government policy is to end gas flaring andconvert the product to revenue as well es end the adverseconsequences of the flare. Accordingly, the Government has createdthe new Gas Master Plen and welcomes foreign investors to conveftthe gas to liquid for export, for domestic/industrial use, into fertilizer,petrochemical products. etc.13. lnvestment could be undertaken in various forms including; 100%foreign ownership, by joint venture partnership, production sharingcontrol, Memorandum of Understanding, etc. Some of these provisions
  5. 5. are also embedded in the up-coming Petroleum lndustry Bill that willguide operations in the Oil and Gas industry.Iplid Minqralsi+. Nig*rir boosts several sold minerals resources with names asfollows: Barytes, Coal, Diatomite, Lignite, Columbite, lron Ore, Tin,Bitumen, gold, uranium, gem-stones, etc.15. Besides artisan exploration, these minerals remain largelyunexplored. However, the Government has created a new SolidMineral Policy to guide exploration in the solid mineral sub-sector.Under these guidelines, licenses could be issued to prospectiveinvestors.Power1.5. The current power output in Nigeria remains abysmally low,compared with the actual requirements of the economy. Output is lessthan 4,000 megawatts vis-i-vis a total requirement of nearly L0,0OO.Many effofts are being made in this area but investors are still welcometo add to Government efforts. Government intention is to increasepower output to over 6,000 megawatts by the end of this year and L5,000 megawatts by year 201"3.L7. The rehabilitation of existing power generation, distribution andtransmission assets, completion of all Netional lntegrated PowerProjects (NIPP) and lndependent Fower Projects (lPP), as well as theuse of alternative source of energy such as coal, wind and solar forpower generation is another area of priority for Government.18. A good number of National lndependent Power Projects (NIPP)through the combined efforts of the Federal and the stateGovernments are on-Hoing. The Power Holding Company of Nigeria(PHCNI, responsible for generation, transmission and distribution of
  6. 6. power is being re-organized and restructured with a view toderegulating and creating companies, specializing in various areas ofthe industry. Government also plans to increase electricity tariffs,through the instrumentality of the Electricity Regulatory Comrnission toa commerciatly viable level, and review the law granting monopoly toPHCN in the areas of transmission and distribution.19. Similarly, the Gas Master Plan which has reviewed upwards theprice of ges is aimed at encouraging the supply of gas to theindependent power generating companies- There is, therefore, hugeopportunity and prospects for investors who may wish to invest in theareas of power generation as it holds out unlimited potentials for suchinvestors.M a nu.fa ctu ri nF/l nd ustrieq20. Due to the inadequate supply of povlrer, Nigeria has beenwitnessing a decline in industrialization as power holds the key to thewell being of the sector. However, with the improving power supplysituation, several areas for prospective investors have come underfocus. They include the revival of the textile industry leather andrubber processing, tire manufacturing, beverage and food processing,motorbi kes man ufacturin g, pha rmaceutica ls.2L. Others are the manufacturing of building materials; agro-allied,cereal and milling, vegetable oil production, petrochemicals, processingof solid minerals into industrial raw materiels as manufacturingintermediaries, research and developrnent especially adaptive researchand localieation of local inventions.22- Again, there are also: foundry and forges, metel fabrication, shipand boat building, badge building for the oil and gas industrV, cementproduction, fertilizer plants, wood processing, etc. To this end, a $L00million intervention fund has been set aside for the leather industry. So
  7. 7. also have funds been earmarked for the textile industry andmanufacturing in general.Ulban Wa,pJeA3. With an increasing consciousness for cleaner, more clementenvironment, arises the need for the conversion of urban waste,(poorly maneged in Nigerian cities) to more productive uses, namely:compost fertilizer, Ers, electricity generation, air conditioning, amongothers.24, ln this respect, investors can take advantage of the situation, andin close partnership with the various State Governments and CityAuthorities forge productive partnerships to utilize the huge wastecommonly found.I Elrastructu rE .Con,Fessions25. To improve the provision of more infrastructure in line with theeconomic Vision and the Transformational Agenda of the NigerianGovernment, the lnfrastructure Concessioning Regulation Commission(ICRC) was established.25. The work of the Commission is to leverage on investors funds andexpertise for infrastructural developrnent under various terms andconditions, especially public/private sector joint partnerships such as;management contract, build and transfer contract, build, operate andtransfer, among others.Health Care27. Nigeria suffers from the dearth of adequate provision of lst classhealth facilities, with the state of the art equipment for the provision ofteniary medical cere. This has necessitated man% particularly high-heeled Nigerians, to seek medical treatment overseas. lnvestors are
  8. 8. therefore welcome for the provision of such services to stem the tide ofparticularly highly placed Nigerians seeking medical attention overseas.Feal Estate28" Real estate is yet another viable sector for investors, especially inthe faster grCIwing urban cities of Abuja, Port Harcourt, Lagos, Kano,Kaduna, etc. With a fast growing population, a middle class withsophisticated taste, investors in this sector could only es we Nigerianssay smile to the banks, particularly if required amenities are alsoprovided.Bond hFtruments29. Nigeria made history in April 2006 by becoming the first Africancountry to pey off its $30 billion debt. Having successfully liquidated itsforeign loans, Nigeria virtually remain an under-borrowed country. Onthis note, Government is desirous of raising bond instruments forinvestors to buy into for national development, under favourable termsand conditions that would be made known at various appropriateperiods /Flospita litlTqH,ris m30. Nigeria is a tourist delight and is endowed with a good number oftourism sites including parks, gardens, historical monuments, naturalfeatures, etc. Some of these are: the Yakari Games Reserve, OhuduCattle Ranch, National War Museum, the Ancient Kano Dyeing Pits, TheBenue-Niger River Confluence, Nok Terracotta of Kaduna State.31. Others are the Argungun Fishing Festival, Olumo Rock, and thevarious silvery sand beaches in Lagos, Calabar, Port Harcourt, etc.32. Thus, there exists opportunities for foreign investors in the area oftour operators, over-land safari, game and Gorrilla viewing, deep sea
  9. 9. recreational fishing, lake and river fishing, provision of Hotelinfrastructure and surfing.NiBer Delta.;#13. The Niger Delte is home to Nigerias oil and gas reserves andoperations. There exists over 612 oil fields - 355 onshore and 257offshore. However, the level of oil wealth does not match thedevelopment of the region, a situation Government is eager to address,Various development projects have therefore been earmarked for thetransformation of the region- These renge from the establishment oftertiary educational institutions, the East -West highway (linking theSouth-South to Lagos), the Coastal Road, a new Railway system amongothers, in order to open the region to investors besides those in the oiland gas segtor" 34. lnvestors are therefore welcOme to key into any aspect ofdevelopment of the region they consider appropriate. lnvestors canalso establish businesses as Nigerian cornpanies to take full advantagesof the Local Content Law in the Oil and Gas - providing certain level ofcontents, materials, pipelines and services.!4{hv tnJest.f n Nif,,eria,35. lnvestors will have attraction to Nigeria for the following rea$ons: i) abundance of natural and human resources; ii) large market including the ECOIVAS market, to which Nigeria has access under the provision for the free rnovement of goods and services in the West Africa region; iii) political stability under an accountable Government with respect for the rule of law; iv) a free market economy, with robust private sector; v) attractive incentives; vi) skilled and low cost labour; vii) growing financial sector;
  10. 10. viii) tiberalization of ownership structure of business; ix) reparation of Profits; x) guarantees against expropriation; and xil one-stop shop to reduce bureaucracy and ease of business registration, etc.lnvestment lncFntiHes36- The following are some of the incentives foreign investors couldbenefit from: i) pioneer statusl ii) tax relief on research and development; iii) capital allowances; iv) in-Plant training; v) investment in infrastructure; vi) investment in economic disadvantaged ereas; vii) local value added; viii) local raw material utilization; ix) re-investment allowance; and x) labour intense mode of production.37. ln addition, there are sector-specific incentives relating tomanufacturing, agriculture, solid rninerals, petrochemical and gtss,electricity (power), non-oil export, export processing zones. For moredeta i ls, please visit www- n ieq,t:i a n exportpro Foti o,n co u n-ci l. ore.Chqlleneq,s38, However, despite the opportunities, challenges remain as follows: i) inadequate power supply; ii) inadeguateinfrastructure; iii) bureaucracy; ivl sometimes inappropriate skills, but retrainable; v) provisions of the Land Use Decree; vi) community obstacle;
  11. 11. vii) security problems; and viii) expectation for underserved reward.Bi l?tgra I Economiq, Af,,fqeme nt39. To strengthen bilateral ties, the U.5 and Nigeria in March 2010esteblished a Bi-National Commission to consider, at the highest levelof Government, bilateral issues of interest and concern to the twocountries. The four themes of the Commission, of which WorkingGroups were established, included 6ood Governance, Transparency &lntegrity; Energy & lnvestmenq Food Security and Agriculture; theNiger Delta and Regional Security Cooperation. The various WorkingGroups have held series of productive meetings and appreciableprogress is being made under the four themes identified by theCommission.30. I wish you all the best in your endeavours, hoping that Nigeriawould be your next investment destination if you are not already there.41. Thank you for your kind attention.USeful References -www.nnpcgroup.com (Nigerian National Petroleum Corporation)-www"mmsd.gov.ng (Ministry of Mines and Steel Development)-www.nipc.gov.ng (Nigerian lnvestrnent Promotion Commission)-www.tou rism gov.ng (N igeria Tou rism Development Corporation ) "-www.nercng.org (Nigerian Electricity Regulatory Commission)-www.nepc.gov.ng (Nigerian Export Promotion Council) + + + 11

×