According to the Business, Trade and Investment Guide 2010/2011, Nigeria receives the largest amount of Foreign Direct Investment (FDI) in Africa. Nigeria’s FDI grew from 1.14 billion US dollars in 2001 to 11 billion US dollars in 2009 according to UNCTAD. This makes Nigeria the world’s nineteenth greatest recipient of FDI (2011).
Nigeria’s most significant sources of FDI have generally been the home countries of the major oil companies such as Chevron Texaco, Exxon Mobil and Shell. Three-quarters of China’s FDI in Nigeria is vested in the oil and gas sector. Countries such as Italy, Brazil, the Netherlands, France and South Africa are also major sources of FDI.
According to the Global Competitiveness Report 2011-2012 from the World Economic Forum, in terms of the extent to which rules governing FDI encourage or discourage investment, Nigeria was ranked at 77th out of 142 countries. Its score of 4.6 was the exact average of those 142 countries; in this respect Nigeria out-performed many other West African countries such as Cameroon and Senegal. In terms of the extent to which FDI brings new technology into the country, Nigeria was ranked at 91. Its score of 4.3 was 0.4 below the average, and 0.1 below nearby Cameroon.
The Nigerian Investment Promotion Commission (NIPC) is the federal agency responsible for investment promotion. The Commission provides services for the grant of business entry permits, licenses, authorisations and incentives. Under the 1995 Nigerian Investment Promotion Commission Act, 100% foreign ownership is permitted in all industries except for oil and gas, where investment is limited to existing joint ventures or new production-sharing agreements. Investment from both Nigerian and foreign investors is prohibited in a few industries crucial to national security, such as arms production. Investors are allowed to repatriate 100% of profits and dividends.
The National Planning Commission describes itself as the focal point for development planning and economic management, and its three parastatals are the Centre for Management Development (CMD), National Bureau of Statistics (NBS) and the Nigerian Institute of Social and Economic Research (NISER). The Commission is mandated to advise the federal government on matters relating to national development and the overall management of the national economy.
Other agencies concerned with investment in particular industries or with particular types of investment are the Nigerian Tourism Development Corporation, the National Council on Privatisation and the Nigeria Export Processing Zones Authority (NEPZA). NEPZA is Nigeria’s investment promotion agency for investment into the free zone areas in Nigeria. Investing in free zone areas in Nigeria has a number of advantages designed to attract investors, including a complete tax holiday from all federal, state and local government taxes and levies. NEPZA prioritises four industrial sectors for national development purposes: metallurgical/ engineering industries, agriculture (forest-based and agro-allied activities), chemical/ petrochemical sector and the construction sector.
The Nigeria Vision 20:2020 economic transformation blueprint is a set of plans for the period between 2009 and 2020. The blueprint drew on expertise from various ministries, agencies, state and local governments, representatives from the private sector, development consultants and NGOs. The effort was co-ordinated by the National Planning Commission, working with Messrs Accenture, a global management consulting firm. According to this vision, Nigeria’s industrialisation strategy is four pronged: the achievement of significant improvements in the primary production; the achievement of global competitiveness in the production of specific processed or manufactured goods; the stimulation of domestic and foreign trade in value-adding goods and services; and fostering of strong linkages among all sectors of the economy.
