Corporate Nigeria

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Corporate Nigeria

Investing in Nigeria: A Strategy Guide

Group 3_Sec B

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Corporate Nigeria- Investing in Nigeria: A Strategy Guide

Acknowledgement

We would like to take this opportunity to thank Prof. Aravindan for giving us such an interesting project to work on. This project has made us more aware of the opportunities and issues related to Nigeria and have impregnated us with a sense of awareness not only towards the immediate scenario but the entire trend in total. During the course of our research we came across certain areas related to the ups and downs of the Nigerian Economy and the potential implications. Our Project – “Corporate Nigeria- Investing in Nigeria: A Strategy Guide” strives to imply, focus and elaborate all possible aspects and issues related to Nigeria. Thanking You, Achintya PR Ankit Uttam Arun KS Manish Watharkar Nishigandha Pankaj Kumar Prashant Patro

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Contents

1. Nigeria: Quick Glance……………………………………………04

2. Nigeria: Country Profile………………………………………..06

3. Nigeria: Geographic Overview………………………………11

4. Nigeria: Socio-cultural Overview…………………………..14

5. Nigeria: Demography……………………………………………19

6. Nigeria: Educational Overview……………………………...20

7. Nigeria: Political Overview…………………………………...26

8. Nigeria: Legal Framework…………………………………….29

9. Nigeria: Economic Overview…………………………………33

10. Nigeria: Industrial Overview…………………………………43

10. Nigeria: Special Investment Destinations………………70

11. Bibliography………………………………………………………...72

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Nigeria: Quick Glance

Official Name: Federal Republic of Nigeria Conventional Short Form: Nigeria Capital and Seat of Government: Abuja (approx. 2.2m residents) Form of Government: Federal Republic. Presidential Democracy [“Fourth Republic”] was introduced in 1999 Head of state and Government President Goodluck Jonathan, Grand Commander of the Order of the Federal Republic (GCFR), President and Commander-In- Chief of the Armed Forces of the Federal Republic of Nigeria. New elections will be held in 2015.

Area: Approx. 923.800 sq km

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

Ethnic Groups: More than 250

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)

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Memberships in International Organizations

ACP (African, Caribbean and Pacific States), AU (African Union), Commonwealth, ECOWAS (The Economic Community of West African States), FAO (Food and Agriculture Organization), G77, G15, G24, IAEA (International Atomic Energy Agency), IBRO (International Bank for Reconstruction and Development). ICAO (international Civil Aviation Organization), ICC, ICFTU (International Confederation of Free Trade Unions), IDA (International Development Association), IFAD (International Fund for Agricultural Development), IFC (International Finance Corporation), IFRCS (International Red Cross and Red Crescent Movement), IHO, ILO (International Labour Organization), IMP, IMO (International Maritime Organisation), Interpol, IOM (International Organization for Migration), IPU (Inter-Parliamentary Union), ITU (International Communication Union), MICA (Multilateral Investment Guarantee Agency), MINURSO, MONUC, OAS observer (Organization of American States), OIC (Organization of Islamic Conferences), ONUB, OPCW (Organisation for the Prohibition of Chemical Weapons), OPEC, UNCTAO, UNESCO, UNHCR, UNIDO, UNITAR, United Nations and Sub-Organizations (UNAMSIL), UNMEE, UNMIL, UNMIS, UNMOVIC, UNOCI, UPU (Universal Postal Union), WCO (World Customs Organization), WFTU (World Federation of Trade Unions), WHO, WIPO (World Intellectual Property Organization), WMO (World Meteorological Organization), World Bank, WTO.

Major Media Outlets

Press Champion, Comet, Daily Independent, Daily Sun, Daily Times, Daily Trust, Guardian, New Nigerian, News-watch, Punch, Tell, This Day, Vanguard, various daily papers, weekly magazines and political magazines.

Television and Radio

Africa Independent Television (AIT), Channels TV, Degue Broadcasting Network (DRN), GalaxyTV, Minaj TV, Nigerian Television Authority (NTA), Federal Radio Corporation of Nigeria (FRCN), Ray Power, Voice of Nigeria and Private Broadcasting.

Macroeconomic Indicators for Nigeria

GDP (Current USD

billions)

GDP Growth rate %

GNI per capita (USD)

Inflation rate %

2002 467 2.9 310 4.0

2003 58.3 11.2 360 2.1

2004 72.3 6.0 400 2.0

2005 97.0 5.9 520 6.2

2006 114.7 6.0 640 3.1

2007 165.7 6.1 930 5.7

2008 207.1 6.0 1170 11

2009 216.1 4.3 1273 11

2010 229.5 7.8 1306 15.6

2011 245.2 7.4 1347 13.2

2012 262.6 6.5 1431 12.2

(Source: World Bank)

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Nigeria: Country Profile

50 years of struggle begin to bear fruit

Nobody could have predicted that on 1 October,

1960 – when Nigeria declared independence –

that half a century later the country would finally

have a stable democracy, be taking the first steps

towards weaning itself off its ruinous oil habit

and be firmly on course towards becoming a

global economic giant.

The journey hasn’t been easy. There has been a

civil war, military coups, religious conflict, huge

levels of corruption and a sustained insurgency

that has yet to be resolved. But, as the last

fireworks fade from the sky and the country

returns to the daily grind, Nigerians can look to

the future with confidence, remembering the

words of one of their most famous sons, Chinua

Achebe: ‘The damage done in one year can

sometimes take ten or twenty years to repair.’ It

looks like those repairs are finally starting to be

made.

Proving that it is now a mature democracy,

2010 has seen Nigeria make the peaceful

transition from Umaru Yar’Adua’s administration

to that of former vice-president Goodluck

Jonathan. After Yar’Adua’s life-threatening heart

condition saw him make a withdrawal from

public life in 2009, Jonathan was appointed by

the Senate in February 2010 to serve as acting

president, avoiding a potentially dangerous

power vacuum.

Despite predictions that he would make a

recovery, Yar’Adua sadly died in May this year.

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President Jonathan assumed office on 6 May 2010

and paid tribute to his predecessor, saying:

‘Nigeria has lost the jewel on its crown and even

the heavens mourn with our nation tonight.’

Barack Obama and Nobel Laureate Wole Soyinka

also marked Yar’Adua’s passing. President

Jonathan has inherited a stable economy, with an

oil sector slowly recovering after years of

violence and increasingly vibrant agriculture and

tourism sectors. Recent months have already

seen him act quickly and decisively to remove the

taint of corruption from Nigeria’s government, as

well as appointing a cabinet with a combination

of energy and experience.

With a total area of 356,669 square miles,

Nigeria is the world’s 32nd largest country, and

the most populous country in Africa, with an

estimated population of just over 149 million

people.

The country has a relatively high birth rate –

just under two % (36.65 births per 1000 people)

– and a fast growing economy to match. At the

end of 2008, the country’s real GDP growth rate

was 6.1 %, and in 2009, despite the global

recession, the country had a positive estimated

rate of three %, expected to rise to 4.4 % by 2010

year end, and to 5.5 % by 2011.

Partly due to the 2009 crisis in its banks, which

dried up lending, the country currently has an

inflation rate of about 11 %. But the naira, which

has remained stable at between 149 to the dollar

and 153 over the past year, is expected to act as a

brake to stop inflation pushing higher.

Nigeria’s GDP is estimated at USD357.2 billion

purchasing power parity (PPP – or USD167.4

billion official exchange rate) putting it at 32nd

place in a global table of purchasing power parity

– above many European nations and the third

highest of the African nations, after South Africa

and Egypt.

Not only that, the country is in Goldman Sachs’

‘Next Eleven’ list – countries identified as having

a high potential of becoming the world's largest

economies in the 21st century, good news for the

country’s hopes of being among the world's

leading 20 economies by 2020.

Population and Geography

Containing over 250 ethnic groups, Nigeria has

an abundance of diverse cultures, from the Hausa

in the north to the Yoruba in the southwest and

Igbo and Edo in the southeast. The Muslim Hausa,

the most numerous group, have become

integrated with town-dwelling Fulani. Rural

Fulani, mostly cattle herders, remain more

separate and speak Fula rather than Hausa. There

are several other major ethnic groups in the

north too – the Nupe, Tiv and Kanuri.

In the south, a quarter of the Yoruba are

Muslim, half are Christian and the remainder

follow indigenous beliefs, although there is no

clear division between these two belief systems.

The Igbo (or Ibo) are mostly Christian, as are

other ethnic groups in the southeast, such as the

Ijaw – the fourth largest Nigerian ethnic group –

Efik, Ibibio, and Annang. Again, indigenous beliefs

play a substantive role in their interpretation of

Christianity. Most Nigerian Muslims follow the

Sunni sect, while Roman Catholicism and

established Protestantism are the two most

popular forms of Christianity. However,

breakaway sects incorporating more traditional

beliefs are gaining followers. Of the estimated

521 languages spoken in the country, apart from

English, the most commonly spoken are Hausa,

Yoruba and Igbo, with Kanuri popular in the

northeast.

In order of size, Nigeria’s major cities are Lagos

(approx. 20 million inhabitants), Kano (3.6

million), Ibadan (3.5 million), Kaduna (1.6

million) and Port Harcourt (1.1 million). Abuja,

the capital, has a metropolitan population of

780,000. The country’s topography is effectively

divided into three zones: the far north, the sahel

to the edge of the Sahara, consists of arid semi-

desert with less than 508 mm (20 inches) of rain

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per year; the central region, beginning with the

Nigerian Sudan, consists of savannah – grassy

plains with patchy tree cover and a rainfall of

between 508 and 1524 mm (20 to 60 inches) per

year, becoming more humid in the centre of the

country; the far south has a tropical rainforest

climate, with 1524 to 2032 mm (60 to 80 inches)

of rainfall.

In the southern region, heading south, the

rainforest gives way to freshwater swamp and

then finally to mangroves and the coast – Nigeria

has a coastline of approximately 500 miles (800

km). Beyond that, the country’s territorial waters

extend 12 nautical miles out to sea,

complemented by an exclusive economic zone

that stretches 200 nautical miles offshore.

Of Nigeria’s three regions, the south is the most

extensively developed, containing all of the

country’s major industrial centers, as well as its

oil fields and seaports. Traditionally, the north of

Nigeria has had closer contacts with its north

African neighbors across the Sahara than the rest

of Nigeria, although this is changing as the

internal transport infrastructure improves. The

far north has two areas of dense population, in

the Sokoto and Kano-Katsina areas. Due to its

climate and soil quality, Nigeria’s vast central

area is the least developed of the three regions,

although there are a few small densely populated

areas in the southern Tiv areas and the tin fields

of the Jos plateau.

Nigeria’s most notable geographic feature is the

valley of the Niger and Benue rivers, which meet

in the centre of the country, forming a Y shape.

Other features include the Jos plateau rising up

from central Nigeria, with its expanse of lava

surfaces and countless extinct volcanoes. The

plateau covers about 8000 sq km (3000 sq miles)

and has an average elevation of 1280 m (4200 ft).

The home to the country’s tin industry’s highest

point is Shere hill (1780 meters/5800 feet). The

most mountainous part of Nigeria is the

Cameroon highlands, along the southeastern

border with Cameroon, with the two highest

points in the country: Chappal Waddi (2419

metres/7936 feet) in the Gotel Mountains and

Mount Dimlang (2042 metres/6699 feet) in the

Shebshi Mountains.

Economy – Main Sectors

Nigeria’s major export partners, chiefly for oil

and gas but also for cocoa and rubber are the US

(41.4%), India (10.4%), Brazil (9.4%), Spain (7.2

%) and France (4.6%) Major import partners, for

commodities such as machinery, chemicals,

manufactured goods, food and live animals are

China (13.8 %, Netherlands (9.6 %), US (8.4 %),

UK (5.3 %), South Korea (5.2 %) and France (4.3

%).

Although Nigeria is most well known for its oil

and gas wealth, it is rich in many other resources

too. The country possesses significant coal

reserves, tin and columbite in the Jos plateau,

extensive iron ore deposits in Lokoja and Kwara

state, as well as limestone in many regions. Other

resources include niobium, lead, zinc, kaolin,

gold, topazes, sapphires, aquamarines and rock

salt. The northeastern region contains uranium,

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although this has yet to be exploited on a

commercial scale.

Oil and gas exports are still hugely important to

the Nigerian economy, accounting for 90 % of

foreign exchange earnings and about 80 % of

budgetary revenues. The country is a member of

the Organization of Petroleum Exporting

Countries (OPEC). By mid 2010, oil production in

Nigeria was estimated at 2.3 million barrels per

day, thanks to a successful peace deal with the

Niger Delta rebels, originally brokered by former

president Yar’Adua. In contrast, before the

ceasefire, 2009 production figures had been

estimated as low as 800,000 barrels. Timi Aliabe,

Special Adviser to Goodluck Jonathan on Niger

Delta Affairs, estimates that production will rise

to five million barrels once a retraining

programme for ex-militants in the Niger Delta –

who are also key stakeholders in the region – gets

under way.

Despite oil production falling by 8.2 % in 2008,

the National Bureau of Statistics and OECD have

estimated that the oil and gas sector constituted

32.3 % of GDP by the end of 2009 – but provided

about 80 % of government revenue. It is

estimated that the country has 36 billion barrels

of oil, with vast natural gas reserves of over 5.215

trillion cubic meters (well over 100 trillion cubic

feet).

The agriculture sector – long neglected in favor

of oil – is slightly larger, contributing 36.5 % of

GDP in 2009, thanks to a good harvest. The

sector, which accounts for about two thirds of the

nation’s employment, grew by 7.4 % in 2008,

slightly below the 2007 figure. Notable

agricultural products include palm oil, cocoa and

groundnuts. Significant crops are sugar cane,

yams, cassava, taro, pearl millet, citrus fruits,

sorghum, cowpeas and maize. The neglect of this

sector has lead to Nigeria needing to import food,

as production fails to keep up with urban growth.

Given the continuing problems in the troubled oil

sector and new biofuels potential, it seems likely

agriculture will be increasingly important to

Nigeria.

Nigeria has a thriving communications sector –

the fastest growing in Africa and eighth fastest in

the world. Mobile and fixed line subscriptions

combined are estimated to have had a 125 %

annual growth rate since 2000. The sector is

becoming highly attractive to foreign investors,

with USD11.5 billion invested in 2007, a 41.1 %

increase on the previous year. By April 2010,

there were 56.32 million active lines in Nigeria –

Africa’s highest tele-density at over 40 %. Even

though only 20 % of the country, mainly urban

areas, has mobile coverage, this is enough to

provide for a number of highly competitive

mobile networks. Attempts are being made,

through the Wire Nigeria (WiN) project and State

Accelerated Broadband Initiative (SABI) to roll

out broadband access across the country. At the

close of 2007 there were 117 internet service

providers in Nigeria, with an estimated 6.75

users per 100 inhabitants. As well as a vast

quantity of daily, Sunday and weekly newspapers

and several privately owned television and radio

stations, the state-owned Nigerian Television

Authority runs a network of television stations

throughout Nigeria. Publicly-funded radio

broadcaster the Federal Radio Corporation has

25 stations across the country, claimed to be the

largest radio network in Africa.

The Nigerian film industry, known as Nollywood,

is the second largest in the world, producing at

least 200 videos a month. One 2008 estimate put

its worth at at least USD250 million, although

some insiders valued it as highly as USD2.3

billion.

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Infrastructure In 2006, after protracted negotiations, Nigeria became the first African country to completely pay off its Paris Club group of debtors – an estimated USD30 billion. Since 2008, the country has been developing a Medium Term Sector Strategy for growth for the years 2009-11, as a

means of more clearly co-coordinating the government’s medium-term goals. Former president Yar’Adua identified seven key sectors as part of his Seven Point Agenda as a means of diversifying away from oil. Notably, these include transport, power generation, education, reducing corruption and combating insurgency in the

Niger delta. President Jonathan has emphasized the need to continue developing these areas, in particular power generation, education and eliminating corruption. This agenda broadly correlates with the National Economic Empowerment and Development Strategy (NEEDS) and Vision 2020 plan as a means of putting Nigeria in the world's leading 20 economies by 2020. The three strategies aim to stimulate GDP growth, reduce poverty, ensure a stable economy and generate employment. However, many of the 120,000 miles (193,000 km) of roads, of which less than 19,000 miles

(30,000 km) are paved, are in poor condition due to a combination of heavy traffic and substandard maintenance. Public private partnerships in many states are finally seeing some much-needed repairs to the road network, and developments of roads such as the Lagos-Ibadan expressway. The country also has 5,300 miles (8,600 km) of waterways, and there is a programme underway

to revitalize major ports including Bonny, Calabar, Koko, Port Harcourt and Sapele, in partnership with the private sector. The two biggest airports are Abuja International and Lagos Murtala Muhammed – also being expanded through a public private partnership – although there are almost 70 smaller ones. Plans are also in progress to privatise Nigeria’s railway network, with 30-year concessions granted to private companies. The government aims to reopen rail links between Nigeria’s seaports and inland container depots as a means of reducing pressure on the roads and finish the 11.8 mile (19 km) long Ajaokuta-Itakpe-Warri standard gauge line. There are also about 2,200 miles (3,505 km) of narrow gauge railways in Nigeria, although these are unsuitable for heavy freight. Disruptions to gas supplies and a drop in reservoir water levels adversely affected the country’s power generating capabilities in 2008. Power outages are having a knock-on effect on the manufacturing sector. However, the government has launched an ambitious USD40-60 billion plan over the next six years to address this, in conjunction with the private sector, as well as performing emergency repairs in the short term. Although these are big problems, they aren’t insurmountable. President Jonathan’s administration has identified Nigeria’s weak

spots. It is also ensuring that actions are taken

so that the country can take its place at the table with the 20 other leading economies in 2020.

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Nigeria: Geographical Overview

Jewel of West Africa Nigeria is situated in the West African region and lies between longitudes 3 degrees and 14 degrees and latitudes 4 degrees and 14 degrees. It has a land mass of 923,768 sq.km. It is bordered to the north by the Republics of Niger and Tchad; it shares borders to the west with the Republic of Benin, while the Republic of Cameroun shares the eastern borders right down to the shores of the Atlantic Ocean which forms the southern limits of Nigerian Territory. The 800km of coastline confers on the country the potentials of a maritime power. Land is in abundance in Nigeria for agricultural, industrial and commercial activities. At its widest, Nigeria measures about 1,200 km from east to west and about 1,050 km from north to south. The country's topography ranges from lowlands along the coast and in the lower Niger Valley to high plateaus in the north and mountains along the eastern border. Much of the country is laced with productive rivers. Nigeria's ecology varies from tropical forest in the south to dry savanna in the far north, yielding a diverse mix of plant and animal life. The broad, mostly level valleys of the Niger and Benue rivers form Nigeria's largest physical region. The Niger enters the country from the northwest, the Benue from the northeast; the two rivers join in Lokoja in the south central region and continue south, where they empty into the Atlantic at the Niger Delta. Together, they form the shape of a Y. Population densities and agricultural development are generally lower in the Niger and Benue valleys than in other areas. North of the Niger Valley are the high plains of Hausaland, an area of relatively level topography averaging about 800 m above sea level, with isolated granite outcroppings. The Jos Plateau, located close to Nigeria's geographic center, rises steeply above the surrounding plains to an average elevation of about 1,300 m. To the northeast, the plains of Hausaland grade into the basin of Lake Chad; the area is characterized by

somewhat lower elevations, level terrain, and sandy soils. To the northwest, the high plains descend into the Sokoto lowland. Southwest of the Niger Valley (on the left side of the Y) lies the comparatively rugged terrain of the Yoruba highlands. Between the highlands and the ocean runs a coastal plain averaging 80 km in width from the border of Benin to the Niger Delta. The delta, which lies at the base of the Y and separates the southwestern coast from the southeastern coast, is 36,000 sq km of low-lying, swampy terrain and multiple channels through which the waters of the great river empty into the ocean. Several of the delta's channels and some of the inshore lagoons can be navigated. Southeastern coastal Nigeria (to the right of the Y) consists of low sedimentary plains that are essentially an extension of the southwestern coastal plains. In all, the Atlantic coastline extends for 850 km. It is marked by a series of sandbars, backed by lagoons of brackish water that support the growth of mangroves. Large parts of Africa's Bight of Benin and Bight of Biafra fall along the coast. Because of the Guinea Current, which transports and deposits large amounts of sand, the coastline is quite straight and has few good natural harbors. The harbors that do exist must be constantly dredged to remove deposited sand. Inland from the southeastern coast are progressively higher regions. In some areas, such as the Udi Hills northwest of Enugu, escarpments have been formed by dipping rock strata. Farther east, along Nigeria's border with Cameroon, lie the eastern highlands, made of several distinct ranges and plateaus, including the Mandara

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Mountains, the Shebeshi Mountains, the Alantika Mountains, and the Mambila Mountains. In the Shebeshi is Dimlang (Vogel Peak), which at 2,042 m is Nigeria's highest point.

Land Boundaries Nigeria shares borders with Cameroon (1,690 kilometers) in the east, Niger (1,497 kilometers) in the north, Benin (773 kilometers) in the west, and Chad (87 kilometers) in the northeast.

Disputed Territory Nigeria and Cameroon have held bilateral meetings to resolve disputes concerning the two countries’ shared land and maritime boundary. Nigeria has not fulfilled its pledge to cede the Bakasi Peninsula, which juts into the Gulf of Guinea, to Cameroon, despite the International Court of Justice’s ruling in favor of Cameroon in 2002.

Length of Coastline Nigeria’s coastline along the Gulf of Guinea totals 853 kilometers.

Maritime Claims Nigeria claims a territorial sea of 12 nautical miles, an exclusive economic zone of 200 nautical miles, and a continental shelf to a depth of 200 meters or to the depth of exploitation.

Topography Nigeria has five major geographic regions: a low coastal zone along the Gulf of Guinea; hills and low plateaus north of the coastal zone; the Niger-Benue river valley; a broad stepped plateau stretching to the northern border that has elevations exceeding 1,200 meters; and a mountainous zone along the eastern border, which includes the country’s highest point, Chappal Waddi (2,419 meters).

Principal Rivers Nigeria has two principal river systems: the Niger-Benue and the Chad. The Niger River, the largest in West Africa, flows 4,000 kilometers from Guinea through Mali, Niger, Benin, and Nigeria before emptying into the Gulf of Guinea. The Benue, the Niger’s largest tributary, flows 1,400 kilometers from Cameroon into Nigeria, where it empties into the Niger River. The country’s other river system involves various

rivers that merge into the Yobe River, which then flows along the border with Niger and empties into Lake Chad.

Climate Temperatures across the country are relatively high with a very narrow variation in seasonal and diurnal ranges (22-36t). There are two basic seasons; wet season which lasts from April to October; and the dry season which lasts from November till March. The dry season commences with Harmattan, a dry chilly spell that lasts till February and is associated with lower temperatures, a dusty and hazy atmosphere brought about by the North-Easterly winds blowing from the Arabian peninsula across the Sahara; the second half of the dry season, February - March, is the hottest period of the year when temperatures range from 33 to 38 degrees centigrade. The extremes of the wet season are felt on the southeastern coast where annual rainfall might reach a high of 330cm; while the extremes of the dry season, in aridity and high temperatures, are felt in the north third of the country. Vegetation In line with the rainfall distribution, a wetter south and a drier northern half, there are two broad vegetation types: Forests and Savanna. There are three variants of each, running as near parallel bands east to west across the country. Forests Savanna Saline water swamp Guinea Savanna Fresh water swamp Sudan Savanna Tropical (high) evergreen Sahel Savanna Rainforest.

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There is also the mountain vegetation of the isolated high plateau regions on the far eastern extremes of the country (Jos, Mambilla, Obudu). The savanna, especially Guinea and Sudan, are the major grains, grasses, tubers, vegetable and cotton growing regions. The Tropical evergreen rain forest belt bears timber production and forest development, production of cassava; and plantation growing of fruit trees - citrus, oil palm, cocoa, and rubber, among others. Resources: Agricultural, Mineral and Marine

Nigeria, in addition to its huge population is endowed with significant agricultural, mineral, marine and forest resources. Its multiple vegetation zones, plentiful rain, surface water and underground water resources and moderate climatic extremes, allow for production of diverse food and cash crops. Over 60 per cent of the population is involved in the production of the food crops such as cassava, maize, rice, yams, various beans and legumes, soya, sorghum, ginger, onions, tomatoes, melons and vegetable. The main cash crops are cocoa, cotton, groundnuts, oil palm and rubber. Extractions from these for export and local industrial use include cocoa flour and butter, rubber crumb, vegetable oil, cotton fibre and yarn. The rain forests have been well exploited for timber and wood products of exotic and popular species.

Oil and Gas, by value, are the most important minerals. They are exploited and produced in the Niger Delta basin and off-shore on the continental shelf and in the deep-sea of the territorial waters. Nevertheless, there are significant non-oil mineral deposits on land many of which have been identified and evaluated: coal, iron ore, gypsum, kaolin, phosphates, lime -stone, marble, columbine, baryte and gold.

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Nigeria: Socio-Cultural Overview

Nigeria Turns 50

October 1, 2010 will be a day of celebration for

Nigeria: a historic milestone marking 50 years of

independence, five decades of progress, a half

century spent traveling the difficult road from a

socially fractious colonial outpost to a strong,

united and prosperous nation.

Nigeria gained independence from Britain in

1960, but the country itself was formed in 1914

when the British government amalgamated three

of its colonial territories: Lagos, which it annexed

in 1861; the Southern Provinces, over which it

established rule between 1885 and 1894; and the

Northern Protectorate, which it controlled by

1903. Until 1914, the three were governed by

Britain as separate but related territories.

Between 1922 and the constitution signed into

law in 1947, a policy of regional representation

saw increased local involvement in the

government of the country. The constitution of

1954 created regional governments, and the first

federal elections took place in 1959. It was not

until 1963 that Nigeria – which for three years

had existed as a British dominion – broke all ties

with its former colonial master and established

itself as a republic within the Commonwealth.

Population and Geography

Home to a population of around 150 million

people, Nigeria is the most-populous country in

Africa and one of the world's fastest growing

countries, with population growth estimated at a

rate of just over 2.3% a year. The Nigerian people

are a diverse mix of more than 250 ethnic groups,

which can be roughly divided into 50% Muslim,

40% Christian and 10% who hold traditional

indigenous beliefs. The official language is

English, although 478 other languages are spoken

across the country.

Nigeria has a total land area of 923'000 sq km, a

coastline of 853 km and territorial waters that

extend 12 nautical miles out to sea. It is situated

on the west coast of Africa, bordered by the

Atlantic Ocean in the south and Niger and Chad

on the north. Benin lies to the west, while

Cameroon represents the eastern border. The

capital city, Abuja, is in the centre of the country

and has a population of 3m, while Lagos, to the

south-west, is twice its size and has an estimated

population of 18m.

The country's terrain varies considerably, with

lowlands in the south, hills and plateaus in the

central region and plains in the north. Coastal

swamps and tropical forests dominate the

southern terrain, while the north is mostly

savannah and semi-desert.

A Rich Cultural Diversity

With over 250 ethnic groups and a variety of

languages spoken, it’s little surprise that Nigeria’s

culture is so diverse. The country is

internationally famous for its writers and

musicians, with notable artists including writer

Chinua Achebe, juju musician King Sunny Ade,

afrobeat musician Fela Kuti, Nigerian gospel

singer Onyeka Onwenu, writer Ben Okri,

playwright Ken Saro-Wiwa, Nobel prize winning

writer Wole Soyinka, actor Nkem Owoh, director

Chico Ejiro and British/ Nigerian artist Yinka

Shonibare. The Hausa and Fulani, Yoruba and

Igbo make up the three major ethnic groups in

Nigeria. Both Hausa and Fulani come from the

Muslim north. The Yoruba, who come from

southwestern Nigeria, are mostly farmers, and

practice both Islam and Christianity. The Igbo of

the southeast are usually Christian. There is a

notable overlap between organised religion and

traditional indigenous beliefs – it is common for

Muslims and Christians to also observe some

degree of indigenous practices. Smaller groups

include the Ibibio, the Edo, the Tiv and the Nupe.

Thus, some of the cultural factors that have

been documented by studies which accounted for

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these differences in human conditions and hence

investor scepticism are discussed below.

The “Commanding Heights” Philosophy

This involves state ownership of all major

industries, state mobilization, direction of

investment resources, and state planning. This

policy implies that the state is found in every

sector of the economy, private sector initiative is

restricted while foreign investors see the

economy as an unpredictable economy. Under

successive military governments in Nigeria much

power was concentrated in the Federal

Government, this largely prevented free market

competition and the emergence of a viable

private sector that could accelerate economic

development. Though, with the advent of genuine

democratic governance, the Nigerian government

is said to have considered the privatization of

public enterprises as an alternative option to

getting rid of economic recession, price

fluctuation and technological backwardness.

Military Rule

The emergence of the military on Nigerian

political scene for twenty-nine years prevented

foreign investment because military

authoritarianism was not conducive for the rule

of law which used to be grounds for smooth

capitalist business. Thus, for almost three

decades of military rule in Nigeria, the business

environment suffered many setbacks, this was

because the draconian government removed

professionalism in economic planning and

replaced it with mediocrity. Thus, the growth of

military regimented lifestyles consequently

facilitated the growth of statist culture,

corruption and authoritarianism. As a vicious

circle, authoritarian government built hostile

environment and prevented foreign investment,

while many domestic industries were closed

down under the aegis of bad economic policy and

inflation. Under the regimes of Gen. Ibrahim

Babangida and late Sanni Abacha, Nigeria's

economic development reached its stalemate.

While the former regime introduced SAP that

compounded the economic conditions of

Nigerians, the later perpetuated a lot of human

rights abuse, which subsequently earned Nigeria

sanctions from top capitalist nations like the

United States and the United Kingdom. Though,

the military has been disengaged from Nigerian

politics since May 1999, political analysts opined

that majority of ex-military leaders are still in the

corridors of power.

Entrepreneurial Achievement

While the Nigerian state cannot but accept the

blames being passed on it, it should be noted that

many of its citizens lack the will and the

achievement personality style to aid

development. Experiences in contemporary

Nigerian society have shown that most Nigerians

lack achievement motivation, and often prefer to

engage in activities that are less stressful and less

tasking. Much of their labour power is devoted to

earning illegal profits. Although, government has

recently embarked on activities that will increase

public awareness on the importance of

entrepreneurship for economic growth in a

depressed economy, like that of Nigeria; there are

still many people in the country, who are yet to

understand the need for them to be self reliant

through entrepreneurship.

The Culture of Violence as a Threat to

Capitalist Development

Whether in government enterprises, private

sector businesses or international trades, many

social scientists who have written extensively on

the Neo-liberal economic agenda have argued

that violence an impedes development. Violence

creates hostile environment for economic growth

and also creates fear in business people. A violent

environment can never be conducive for peaceful

trade negotiation. From the Nigeria Civil War of

1967-1970 to several religious clashes in the

North, ethnic clashes in the South, insurgence of

Niger Delta crisis and Political and Sectanan

clashes in the North. Adams (2000) commented

that violent political, ethnic and religious clashes

are evidences of the failure of the Nigerian state.

P a g e | 16


The other constraints for business environment

faced by the firms are as shown in the graph

below.

But now, the Federal Government has

implemented the following reforms to overcome

these constraints and attract investors from

outside.

Nigerian Media

National state-run television and radio

broadcasting is complemented by state-run radio

and television stations. Radio remains the key

source of information for Nigerians, as television

viewing and internet usage tends to be

concentrated in the affluent population centers in

the cities. There are also more than 100 national

and local newspapers and periodical publications.

From Independence to Civilian Democracy

The early years of Nigeria's independence were

difficult. The regional structure laid out in the

1960 constitution created internal conflicts, with

neighboring regions vying for greater control of

the federal government. Violence and vote rigging

marred the 1964 federal elections, and the

situation continued to deteriorate until, in 1966, a

group of mostly Igbo army officers launched the

country's first military coup.

In the years that followed, Nigeria lurched from

one military ruler to the next. There were three

abortive attempts at democratic elections and the

formation of a republic – one of which was

instigated in 1979 by General Olusegun Obasanjo,

the then military head of state who would lead

the country after its return to civilian democracy

20 years later. Despite the efforts of progressive

political thinkers, military rule continued, largely

uninterrupted, throughout the 1980s and 90s.

But out of all this internal strife, Nigeria has

been reborn. The return to civilian democracy in

1999 has ushered in a programme of political,

economic and social reforms that is now bearing

fruit. In 2007, the first civilian handover of power

in the country's history took place, with President

Umaru Yar'Adua taking office after eight years of

P a g e | 17


rule under President Obasanjo, and following

Yar’Adua’s sad death in 2010, a second civilian

transfer was carried out, to President Goodluck

Jonathan.

A Vast Potential, Ready to be realized

The administration of President Jonathan has a

golden opportunity to continue the drive towards

prosperity that started more than ten years ago.

A focused policy of privatization, deregulation

and liberalization has opened the door to

investment in Nigeria, and the world's leading

economies have started to pay close attention to

this jewel of the West African coast.

Nigeria is endowed with vast natural resources.

While the oil industry has dominated the

economy for decades – with output of around 2

million barrels a day in 2010 – the administration

is determined to implement a policy of diverse

exploitation of the country's other natural

resources. The Ministry of Mines and Steel

Development is currently overseeing the

exploration and promotion of Nigeria's solid

mineral resources, and is actively encouraging

foreign direct investment to spur the drive

towards an industrialized mining sector. Proven

reserves of tin, coal, iron ore, copper, lead and

zinc have been surveyed with a view to

mechanized extraction. There are also significant

gemstone reserves, including sapphire, ruby,

aquamarine, emerald, tourmaline, topaz, garnet,

amethyst, zircon, and fluorspar. The

simplification of the process for securing mining

rights has boosted international interest and

confidence in the sector.

As well as the large under-exploited quantities

of solid minerals, Nigeria also offers plentiful

opportunities for commercial farming. The sector,

while underdeveloped, currently produces a

range of agricultural produce, such as cocoa,

peanuts, palm oil, corn, rice, cassava and yams.

The north of the country also supports livestock

farming.

Banking Reform

The radical reform of the banking sector started

in earnest in 2004 and was overseen by the

Central Bank of Nigeria. It led to the consolidation

of Nigeria’s banks, and strengthened the sector

against future shocks. Like the rest of the world,

Nigeria’s banking sector had to come to terms

with the challenges posed by the global financial

crisis. But a bank bail-out in 2009 followed by

decisive action by the strong Central Bank of

Nigeria to audit and evaluate banks and CEOs has

renewed confidence in the sector and put the

country’s banks on a proper footing for sustained

growth.

There exists a banking infrastructure that

complements the vast opportunities on offer to

investors in Nigeria, and with confidence in the

sector growing, Nigeria can be considered well

and truly open for business.

Telecoms Goes from Strength to Strength

The Nigerian telecoms sector is one of the

country's major success stories. Governed by the

Nigerian Communications Commission (NCC), an

P a g e | 18


independent regulator established in 1992, the

industry has thrived following increased

investment. This revolution of the industry was

largely sparked by the entry of mobile operators

into the market in 2001.

The NCC listed tele-density in April 2010 at

56.3% – representing almost 79m subscribers –

compared to 29.98% in December 2007. The far-

reaching reforms instigated by the NCC have lead

to hundreds of companies offering a variety of

telecom and value-added services, and the

market value of the sector is projected to hit

USD10 billion in 2010. Although foreign direct

investment has flowed into the industry since

2001, it is estimated that a further USD25 billion

will need to be secured if 100% teledensity is to

be achieved by 2020, in line with Nigeria's Vision

2020.

A similar explosion in Internet access and usage

has also taken place, with the most recent reliable

estimates showing almost 24 million Nigerians

using the Internet. Although this means the

proportion of population with Internet access is

relatively low, the NCC has launched a number of

programmes to extend Internet connectivity to as

many users as possible. The State Accelerated

Broadband Initiative (SABI) offers incentives to

the private sector to build and operate

broadband infrastructure in state capitals and

major commercial centers, while the Rural

Broadband Internet Access (RUBI) scheme

encourages providers to extend connectivity to

rural areas.

A Commitment to Tackling Corruption

As part of his inaugural speech in 2007,

President Yar'Adua laid out his commitment to

tackling the issue of corruption, which in the past

had plagued all levels of government in Nigeria,

and his successor, President Jonathan, has vowed

to continue his work. As well as the negative

impact that government-level corruption had on

the day-to-day lives of ordinary citizens, it also

had severe consequences for the level of foreign

direct investments the country could attract. A

combination of the work carried out by both the

Economic and Financial Crimes Commission and

the Attorney General's office, including several

high-profile investigations into the activities of

former state governors, has helped to instill the

idea that corruption will not be tolerated in – and

is incompatible with – a vibrant, prosperous

Nigeria.

Looking to the Future

It cannot be denied that the last 50 years for

Nigeria have sometimes been difficult.

Furthermore, it is clear that there are still

significant challenges ahead. The country's

infrastructure requires immediate attention if it

is to support the growing economy; the country's

resources must be carefully managed and

exploited in a way that will benefit the population

as a whole; and the relative peace in the Niger

Delta must be maintained if the country is to

remain stable. But as the country reaches a half-

century of independence, there exists the will and

the opportunity for Nigeria to meet these

challenges and take the next step forward in its

history – to realize its vast potential and step into

the limelight as a strong, secure and open global

economy.

P a g e | 19


Nigeria: Demography

Nigeria is the most populous country in Africa

and 2nd economic power in the continent. It

consists of 36 federal states which has more than

700 local governments. The economy is mainly

driven by oil production.

The population of Nigeria is 174,507,539 (July

2013 est.) estimates for this country explicitly

take into account the effects of excess mortality

due to AIDS; this can result in lower life

expectancy, higher infant mortality, higher death

rates, lower population growth rates, and

changes in the distribution of population by age

and sex than would otherwise be expected. The

age wise distribution is as follows

Age (years) Population

(%) Male (in

Mns) Female (in

Mns) 0-14 48.3 39.12 37.33 15-24 19.3 17.20 16.45 25-54 30.1 25.84 26.69 55-64 3.8 3.01 3.60 Above 65 3 2.39 2.84

Total dependency ratio of Nigeria is around

89%. Again the youth dependency ratio is 83.8%,

elderly dependency ratio is 5.2% and potential

support ratio is 19.3%. The Median age of total

population is 17.9 years. Males have median age

17.4 years, whereas for female it is 18.4 years

The Population Growth rate for the year 2013 is

2.54%. The birth rate is 38.78 and death rate

is 13.2. The overall migration rate has a negative

trend which is -0.22. The 49.6% population

resides in urban and it is growing at a rate of

3.75%. The most populous cities are Lagos

(10.203 million); Kano (3.304 million); Ibadan

(2.762 million); Abuja (1.857 million); Kaduna

(1.519 million). The overall sex ratio is 943.33.

The life expectancy of entire population is 52.46

years. Males have a life expectancy of 49.35 years,

whereas female have slightly higher life

expectancy of 55.77 years. The total literacy rate

is 61.3% which includes male literacy rate 72.1%

and Female literacy rate is 50.4%. Total health

expenditure for the year 2011 was 5.3% of GDP.

Nigeria is the most populous country in Africa,

the second biggest economy, the third largest

military power and the biggest oil producer (10th

oil producer in the world). Its seven most

populous cities each house more than one million

people, and about one out of two West Africans is

from Nigeria. Since its return to democracy in

1999, Nigeria has enjoyed 13 years of

uninterrupted democratic rule. However, security

concerns are on the rise, in particular since the

emergence of the radical Islamist sect Boko

Haram which has killed more than 1 000 people

since 2009. Moreover, Movement for the

Emancipation of the Niger Delta (MEND)

militants have abandoned a three-year-old

ceasefire. The successful political transition from

a northern to a southern leader in April 2011

proved that “a Nigerian, irrespective of where he

or she comes from, who is popular with Nigerians

generally has a good chance of winning the

presidency” (Ambassador Bristol). North-South

antagonism will continue to play a visible role in

Nigerian politics. It is ranked 156th out of 187

countries in Human Development Index.

(Sourece: Federal Ministry of HRD, Nigeria)

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Nigeria: Educational Overview

Nigeria has made considerable progress in the

domain of education. The education system in the

country is supervised by the state. There are 27

federal and state-owned polytechnics in Nigeria.

Nigeria is making a steady progress in the

development of education. Many universities and

schools have been established by the state.

Primary education in Nigeria is in the native

language but brings in English in the third year.

Higher Education has developed considerably

over the years, which has resulted in a healthy

literacy rate. Education in Nigeria is managed by

the state.

Nigeria operates on a 9-3-4 system, i.e. primary

& Junior Secondary School continues for 9 years,

Senior Secondary for 3 years and University first

degree is for 4 years. Nigeria currently has 36

states with a Federal Capital Territory and a

population of over 150 million people. Of this

population, approximately 30 million are

students. English is the only language used in

schools, for reading, writing and speaking.

Education in Nigeria is the shared responsibility

of the federal, state and local governments. The

Federal Ministry of Education plays a dominant

role in regulating the education sector, engaging

in policy formation and ensuring quality control.

However, the federal government is more directly

involved with tertiary education than it is with

school education, which is largely the

responsibility of state (secondary) and local

(primary) governments. The education sector is

divided into three sub-sectors: basic (nine years),

post-basic/senior secondary (three years), and

tertiary (four to seven years, depending on the

major or course of study). Education in Nigeria is

provided by public and private institutions.

According to Nigeria’s National Policy on

Education (2004), basic education covers

education given to children 3-15 years of age,

which includes pre-primary programs (ages three

to five), and nine years of formal (compulsory)

schooling consisting of six years of primary and

three years of junior secondary. Post-basic

education includes three years of senior

secondary education in either an academic or

technical stream. Continuing education options

are provided through vocational and technical

schools. The tertiary sector consists of a

university sector and a non-university sector. The

latter is composed of polytechnics, mono-technics

and colleges of education. The tertiary sector as a

whole offers opportunities for undergraduate,

graduate, vocational and technical education.

There are currently (2011) 117 federal, state and

private universities accredited in Nigeria as

degree-granting institutions

Annually, an average of 1.5 million students

take the Unified Tertiary and Matriculation

Examination (UTME) for entrance into Nigerian

universities, polytechnics and colleges of

education. Universities have the capacity to

absorb less than 40 percent of these test takers.

The other 60 percent tend to go to their second

and third choice categories of institutions—

polytechnics and colleges of education. Many

Nigerian students also apply to institutions

abroad. In 2011, 40 percent of the students who

sat for the UTME made the minimum cut-off

grade of 200 (out of 400) for entry into Nigerian

universities.

There are currently various government

reforms and initiatives aimed at improving the

Nigerian educational system. These include the

upgrade of some polytechnics and colleges of

education to the status of degree-awarding

institutions, the approval and accreditation of

more private universities, and the dissemination

of better education-related data, including the

recently published Nigerian Educational

P a g e | 21


Statistics (a publication assisted by USAID among

others).

Approximately 60 percent of the population

will be between the ages of 13 and 45, fall far

short of addressing the educational needs of

the country. As a result, an increasing number

of families and students are looking at

alternative educational opportunities within

the region and further abroad.

Primary and Secondary School

Primary education (grades 1-6) is free and

compulsory, and offered to children aged 6-

12. The curriculum is geared toward

providing permanent literacy, laying a sound

basis for scientific, critical and reflective

thinking, and also in equipping children with

the core life skills to function effectively in

society.

Secondary School

A majority of senior secondary

school students proceed in the academic

stream from junior secondary school.

However, there is also a technical stream, in

addition to vocational training outside of the

school system, or apprenticeship options

offering a range of terminal trade and craft

awards.

Private organizations, community groups,

religious bodies, and the federal and state

http://nfmprd02.newfiremediahosting.com/~wenrwes/wp-content/uploads/2011/08/chart11.gif

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governments establish and manage

secondary schools in Nigeria. All private and

public schools offer the same curriculum but

most private schools include the Cambridge

International Examination curriculum, which

allows students to take the IGSCE

examinations during their final year in high

school. It is also important to note that some

private schools offer GCE A-levels, which

usually serve as a gap year after graduation

for students that are interested.

Students take the Senior Secondary

Certificate Examination (SSCE) at the end of

grade 12. The Senior

Secondary Certificate (SSC) is awarded to

successful candidates. The certificate lists all

subjects in which the student is successful.

The SSCE replaced the West African GCE O

and A levels in 1989, although those

examinations are still available to students

who wish to take them (see above). The SSC is

issued by the West African Examination

Council (WAEC) or the National Examination

Council (NECO), depending on the

examination board used.

Technical & Vocational Education

Technical and vocational education is

available for graduates of junior secondary

school. A two-tier system of nationally

certified programs is offered at science

technical schools, leading to the award

of National Technical/Commercial

Certificates (NTC/NCC) and Advanced

National Technical/Business Certificates.

The lower level program lasts three years

after Junior Secondary School and is

considered by the Joint Admission and

Matriculation Board as equivalent to the SSC.

The Advanced program requires two years

of pre-entry industrial work experience and

one year of full-time study in addition to the

NTT/NCC. The advanced degrees are typically

considered equivalent to an undergraduate

degree. All certificates are awarded by

the National Business and Technical

Examinations Board (NABTEB).

Tertiary Education

Presently there are 117 universities; 36

federal, 36 state and 45 private universities.

The National Universities Commission (NUC)

is the government umbrella organization that

oversees the administration of higher

education in Nigeria. The 36 federal

universities and dozens of teaching hospitals

and colleges are under its purview. State

governments have responsibility for the

administration and financing of the 36 state

universities. The NUC approves and accredits

all university programs.

In addition to universities, there are 59

federal and state polytechnic colleges and

several privately owned polytechnics,

monotechnics and colleges of education

across the country.

Admissions

For entrance into a Nigerian institution of

higher learning, students are required to take

the Unified Tertiary Matriculation

Examination (UTME).. The minimum mark

required on the UTME for admission to

university is 200 (out of 400). In addition,

each institution has cut off marks for various

programs, so a minimum of 200 marks does

not guarantee admission, especially for high-

demand programs and institutions.

Universities also conduct additional screening

before a final admission decision is made. For

the UTME, students must take exams in

English and three subjects related to their

proposed major. All admissions to bachelor

degree programs at all Nigerian universities

are organized through the Joint Admissions

http://www.cie.org.uk/

http://www.cie.org.uk/

http://www.nuc.edu.ng/

http://www.jamb.org.ng/

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and Matriculation Board (JAMB). Private

universities are far less popular. The

University of Lagos was the most popular

choice with 99,195 applicants (for 6,106

places), followed by Ahmadu Bello University

(89,760), the University of Nigeria Nsukka

(88,177), Nnamdi Azikiwe University

(84,719) and the University of Benin

(80,976).

Technical and Vocational Higher

Education

Higher technical education is provided at

technical colleges, polytechnics and colleges

of education. Entry to colleges and

polytechnics is based on JAMB-administered

entrance examinations combined with results

from secondary and vocational schools.

The National Diploma is a two-year

program and grants access to Higher National

Diploma programs. The Higher National

Diploma (HND) is a two-year program that

typically requires one year of work

experience after the National Diploma, which

is required for admission. The HND is not

equivalent to a university degree. HND

graduates will typically take a one year

postgraduate diploma certificate before

applying for a master’s degree in any Nigerian

university.

Education has always been an instrument

of empowerment for Nigerian population.

And, the country is not lagging behind, at all,

in exploring the latest educational

developments. Online learning is one of the

most innovative ideas education has ever

developed.

The reason for taking up this latest

educational approach is quite clear. On the

one hand, online education enables Nigerian

students to make ways to international

universities through distance learning

courses, and on the other hand, sitting at the

peaceful environment of home these students

prepare themselves for globally lucrative

jobs.

Technologically Advanced Learning

With simply having a PC or tablet and an

internet connection Nigerian students can

reach out to the classrooms of world’s best

universities carrying legacy of past and

excellence of present, say, UK universities.

Cost-friendly learning

Yes, it may sound unbelievable, but

technology and Nigerian governmental

initiatives have made it possible for students

of Nigeria to get international education in

most affordable price. When cost of higher

education is growing to the limits of

impossibility worldwide, online UK distance

learning courses bring a whole new

educational experience for Nigerian students

for some nominal monitory investments.

Job-Centric Education

Online distance education features some

incredible benefits by its own virtue. And,

when this virtue is consolidated by eminence

of UK educational excellence students can

obviously expect some phenomenal

achievements. UK universities involve global

industrial leaders and prominent employers

in designing their distance learning courses,

so that students can be benefited by truly job-

centric education.

Practical & Theoretical Knowledge All at

the Same Time

Besides, these distance courses come with

so great length of flexibility in schedule that

students get affluent scopes to invest their

spare time into some relevant full-time jobs,

doing which they not only become financially

P a g e | 24


strong enough to sponsor their own study,

but also experientially potent enough to

impress employers when they step into their

job search. Many students are seen to take

some apprenticeships beside their convenient

schedule for study.

Freedom of Study

The greatest flexibility of online

study with UK universities is the 24/7

availability of online tutors whom students

can contact as per their convenient time for

any study related assistance.

World Masters’ Views

UK university-based distance learning

courses are not just peerless in their content,

as excellence has been ascribed on them by

the world, but also they provide their

students to get expert advice from industrial

gurus whose suggestions and experience

enrich online students. These masters of

industry give their knowledge depth and

dignity, and with these matchless expert

advices Nigerian distance learners make their

high claim for the best jobs in the global

industry.

Nigeria has indeed started its rise to a

successful future where students will surely

make the country proud with unprecedented

achievements, and UK distance education is

paving their way to a glorious tomorrow.

Online education is highly beneficial in

Nigeria

One must continue their higher education,

in order to earn a college degree, that will

which fetch them better jobs. Students in

developing nations like Nigeria, usually start

working right after they pass out of school as

most don’t have an option.

Nigeria does have good colleges but as they

are not funded by the government, the

colleges don’t run properly. Politics has taken

a toll on the education system, harming it in

ways more than one. However, technology

has saved Nigerian students as more than half

the population these days resort to online

education. Renowned colleges and

universities from all over the world provide

online study programmes which help

students achieve undergraduate and

postgraduate education. Recently, Intel

launched a solution of education that will

help learners in Nigeria, access low-cost and

free resources of digital learning. The

education solution, Intel Explore and Learn

Marketplace, has been launched and is

designed is such a way, so as to help learners

of various age groups. Learners can benefit

from this education solution through learning

materials that are interactive like books,

instruction videos, examination papers and

podcasts.

The education solution was launched in

Lagos and is supposed to help students at

elementary and advanced education levels.

According to the country manager of Intel

West Africa, Bunmi Ekundare, the education

solution will benefit students as well as

education community stakeholders, like

parents and teachers.

With these new educational tools and

online study programmes, students in Nigeria

are bound to do well for themselves and

achieve success.

MOOC Targets High as the

Demand Rises

MOOC is a comparatively new online

learning phenomenon that has developed

quite fast from what it was five years

ago. MOOC is a household name now with

considerable media attention and major

interest from higher learning institutions.

http://www.rdinigeria.com/benefits-of-online-study/

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Observing the growing reputation, the

venture capitalists are considering it as a

lucrative business opportunity to be

exploited properly. MOOC can be seen as an

an extended version of the existing distance

learning approaches through online with

regard to free access to courses and

convenience; it also comes with an

opportunity to think afresh. This new

education system is eager to learn from the

introducing business models targeting

customers comparatively new to the market;

also planning working under new policies to

approach a diverse environment.

MOOC offers an engaging learning

format

Learners interested about higher education

are more enthusiastic about massive open

online courses as they seem to be more

helpful according to the news and reviews.

Students completed MOOCs say their user

friendly format is the biggest attraction.

MOOCs, have always strived hard to rope in

world-class instructors and exploit the

technical advancement to offer more

engaging programmes to the learners; so

their classes with video instruction that they

used from the beginning drew attention of the

worldwide learners toward this fresh

education system.

MOOCs growing to offer more

Although people opting for online

education have varied range of reactions

regarding the classes on internet, curiosity for

MOOCs has always been common and is

increasing every day. Access to quality

material and innovative ways of gaining

shared learning experiences are the most

important ones among the many benefits that

open online courses include. Most studies

confirm that learners experienced MOOC own

skill and aptitude in social networking via

internet, helpful technical ideas, work

management qualities and many other skills

essential to the recent people but haven’t

been widely shared so far. With millions of

students applying for their courses and

providers investing more efforts to allow it to

be more effective, MOOCs are heading toward

making a history for sure.

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Nigeria: Political Overview

Before the amalgamation of the Northern

Protectorate, Southern Protectorate and the

Lagos Colony in 1914, there was no country

called Nigeria. Each region existed

independently of the other with their distinct

culture, history, law and customs. In 1861, the

Lagos colony became parts of the British

Empire in Africa. The smooth penetration of

Lagos paved way for the British overlords to

seek further incursion through Native

administration into the Southern region, of

what is now called Nigeria. In the process of

winning the territory for their metropolis, the

British overlords were left with two options,

one to impose their ways of life on the native

population, two, to adapt the cultural

practices of the native population to their

culture in order to put the British as people

that also appreciated the traditions of the

African people.

Considering the long time effects of this on

the colonial occupation of Nigeria, the British

used the second option and thereafter

introduced the Indirect Rule System of

government. It was this system that brought

the so called hurriedly conceived 1914

amalgamation of the two protectorates and

the Lagos state colony which gave birth to the

Nigerian colonial state and the Nigerian

culture. For most parts of the colonial era,

agriculture was the mainstay of the Nigerian

economy (Dibie, 2000), up till the 1960s.

The agricultural economy provided both

food and cash crops for Nigerians. A large

portion of the Nigerian government revenues

was coming from this sector. When oil was

discovered in large quantity in Oloibiri in

Rivers State in 1956, government started

shifting its attention to oil relying on its

exportation to metropolitan nations.

Economic development at this period was

largely determined by government who were

controlling over 60% of the oil wealth.

Nigeria’s Political Structure

Constitutionally Nigeria is a federal

republic with 36 states and a federal capital

territory, Abuja. It has the elements of US

with president holding executive power and

of the UK make up of upper and lower houses.

Federal Ministry of Foreign Affairs

The Ministry of Foreign of Affairs (MFA) is

the statutory department of the Federal

Government of Nigeria charged with the

responsibility for the formulation,

articulation, and pursuit of Nigerian foreign

policy trust and objectives. These objectives

reflect the domestic, political, economic,

technological, social and cultural aspirations

of the Nigerian people.

Foreign Affair Minister-Viola Onwuliri

(2013–present)

Nigeria has made it into the Top 20

Global Destinations for FDI

Nigeria receives the largest amount of

Foreign Direct Investment (FDI) in Africa.

Foreign Direct Investment inflows have been

growing enormously over the course of the

last decade: from USD1.14 billion in 2001 and

USD2.1 billion in 2004, Nigeria’s FDI reached

USD11 billion in 2009 according to UNCTAD,

making the country the nineteenth greatest

recipient of FDI in the world

Reforming and strengthening

institutional frameworks

It is testament to the country’s newfound

political stability that in 2010 Nigeria has

P a g e | 27


avoided a potentially dangerous political

vacuum, instead seeing the peaceful

transition of power from Umaru Yar’Adua to

his former vice-president Goodluck Jonathan.

At the beginning of 2009, few could have

expected the next year to be marked by a new

president, followed by a succession of

political scandals as President Jonathan made

new and vigorous attempts to stamp out the

corruption that has dogged the Nigerian

political sphere for so long.

Investment Framework And Bodies

Specific measures were taken include

repeal of two legislations (i) Exchange control

act of 1962, (ii) Nigeria Enterprises

Promotion Decree of 1962. Both these acts

restricted and discouraged foreign investors.

In 1995, the Nigerian Investment

Promotion Commission Act laid out the

framework for Nigeria’s investment policy.

Under the Act, 100% foreign ownership is

allowed in all industries except for oil and

gas, where investment is constrained 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: the production of arms and

ammunition, and military uniforms. Investors

can repatriate 100% of profits and

dividendsIn January alone, foreign direct

investment (FDI) inflow into Nigeria was

estimated at $5.2bn (N800bn).

National Competitive Council Of Nigeria

The government has taken some steps to

safeguard these investments. The

inauguration of the National Competitiveness

Council of Nigeria, by President Jonathan in

February this year, is a step in this direction.

The 18-member board, chaired by the

Minister of Trade and Investment, has the

mandate of increasing productivity and sales

for local businesses, as well as the creation of

more markets for made in Nigeria products.

The council is expected to further improve

Nigeria’s global competitiveness ranking.

Legal Framework For Business Activities

Methods Of Conducting Business

All business enterprises must be registered

with the Registrar-General of the Corporate

Affairs Commission (Registrar of Companies).

A foreign investor wishing to set up business

operation in Nigeria should take all steps

necessary to obtain local incorporation of the

Nigerian branch or subsidiary. Business

activities may be undertaken in Nigeria as a:

(i) Private or Public limited liability company;

(ii) Unlimited liability company;

(iii) Company limited by guarantee;

(iv) Foreign Company (branch or subsidiary

of foreign company)

(v) Partnership/Firm;

(vi) Sole Proprietorship;

(vii) Incorporated trustees;

(viii) Representative office

Privatization

P a g e | 28


Under the privatization programme as

announced on July 20, 1998 by H.E Gen

Abdulsalami Abubakar, Government will

retain 40% of the telecom, electricity,

petroleum refineries, coal and bitumen

production, tourism, and spill-over from the

first phase of privatization equities of the

affected enterprises whilst 40% will be

alienated to strategic investors with the right

technical, financial and management

capabilities. The remaining 20% will be sold

to the Nigerian public through the Stock

Exchange.

President Olusegun Obasanjo in his

Presidential order to the Vice President of the

Federal Republic of Nigeria dated 6th July

1999, directed that as the first step in the

phased implementation of the

administration's privatization programme,

action was to be initiated to enable the sale of

shares listed on the Lagos Stock Exchange

and owned by the Federal Government and

its agencies in Commercial and Merchant

Banks, Cement Plants, Petroleum Marketing

Companies

The sales are to be completed by December,

1999 and Core Investors are to be

encouraged to buy into any of the privatized

enterprises which will be paid in foreign

currencies. The second phase will consist of

hotels and vehicles assembly plants, amongst

others. The third phase will involve work on

the companies currently being prepared for

privatization or currently being audited,

including NEPA, NITEL, NAFCON, Nigeria

Airways, Refineries, etc

EFCC

EFCC is a financial unit which is charged

with the responsibility of coordinating the

various institutions involved in the fight

against money laundering and enforcement of

all laws dealing with economical and

financial crimes in Nigeria. EFCC has been

successful not only in creating anti-

corruption awareness among Nigerians but

also in proven cases of economic and financial

crimes. Till date commission has achieved

more than 500 convictions. Besides

commission has made seizures and

recoveries of well in excess USD 6.5 billion.

EFCC has become a barometer for public and

private sector functionaries, a benchmark of

national growth and development and a

reference institution for attaining corporate

governance in Nigeria. Nigeria has lost more

than USD300billion to corruption. EFCC has

been strengthened to combat with this

monster.

TCP (Transparency Clearance Platform)

To assist foreign investors government has

designed TCP so that prospective foreign

investors can verify contract offers and

proposals before jumping at them.TCP can be

accessed through www.efccnigeria.org or

through telephone hotline provided on

websites.

The image of Nigeria has improved

considerably in the recent years. It is bound

to improve because of commitment of the

government to tackle economic and financial

crimes. Foreign investors have been coming

to Nigeria in droves from all over the world

over the last few years and they have taken

advantage of the current congenial business

environment created by the government to

step up their volume of investments

http://www.efccnigeria.org/

P a g e | 29


Nigeria: Legal Framework

Company registration

Nigeria is essentially a free enterprise

country, subject only to regulations as are

necessary for the national interest.

Registration of companies in Nigeria is a

Federal law. Thus, company registration

processes in Nigeria are national and the

same procedures apply to all parts of the

country. The authority charged with the

responsibility of registering companies is the

Corporate Affairs Commission CAC).

The CAMA provides, with certain

exceptions, that no foreign company shall

carry on business in Nigeria unless it is

incorporated in Nigeria. The three primary

types of incorporated companies all of which

could be public or private companies are:

unlimited liability company, company limited

by guarantee and company limited by shares.

The unlimited liability company holds little

or no interest for investors as the liability of

its members as no limit. A company limited

by guarantee limits the liability of its

members to the amount of their respective

guarantees but this type of company is

typically not for commercial purposes. The

most common type of company for

investment purposes is the company limited

by shares in which liability of the members is

limited to the amount, if any, unpaid on the

shares they hold respectively.

To register a limited liability company in

Nigeria, the promoters are required to

comply with the requirements set out by the

law under the Act. There must be a minimum

of 2 shareholders and 2 directors. The

minimum share capital for a private company

is N10,000 while that for a public company is

N500,000 However, a company wishing to

employ expatriates will need to have a

minimum share capital of N10,000,000 in

order to meet the minimum share capital

requirement for expatriate quota application.

In addition to the memorandum and articles

of association, the promoters of the new

company are also required to fill and submit

the following incorporating documents.

Foreign Enterprises, Expatriates &

Immigration

A Nigerian company with foreign investors

is required to be registered with the Nigerian

Investment Promotion Commission (NIPC),

established under the NIPC Act, 1990. The

Immigration Act also requires foreign

investors to obtain Business Permit from the

Federal Ministry of Internal Affairs (FMIA)

before operating or doing business in Nigeria,

albeit a company can commence business

soon after incorporation.

Tax and Fiscal Regulations

Taxation in Nigeria is enforced by the three

tiers of government i.e. Federal, State and

Local Governments, each with its sphere

clearly spelt out in the Taxes and Levies

(approved list for collection) Act of 1998. Of

importance here are tax regulations

pertaining to investors both foreign and local.

The importance of tax regulations cannot be

over-emphasized as most transactions with

any government ministry, department or

agency cannot be concluded without evidence

of a Tax Clearance Certificate certifying that

all taxes due for the three immediately

preceding years of assessment.

The following are some of the relevant tax

regulations in the country.

P a g e | 30


Value Added Tax (VAT)

VAT was introduced by the VAT Act No.2 of

1993, to replace the old sales tax. The Value

Added Tax is a consumption tax levied at each

stage of the consumption chain and borne by

the final consumer. It requires a taxable

person upon registering with the Federal

Board of Inland Revenue (FBIR) to charge and

collect VAT at a flat rate of 5% of all invoiced

amounts of tax able goods and services. All

businesses (old and new) are required to be

registered with VAT office as VAT collection

agents.

Personal Income Tax

The legal basis for this tax is found in the

provisions of the Personal Income Tax Decree

(now Act) No. 104 of 1993. Thus every

taxpayer in Nigeria is liable to pay tax on the

aggregate amount of his income whether

derived from within or outside Nigeria, the

salaries, wages, fees, allowances, and other

gains or benefits, given or granted to an

employee are chargeable to tax. The

Employers of labour are deemed to be agents

of the tax authority for the purpose of remit

outside Nigeria, the salaries, wages, fees,

allowances, and other gains or benefits, given

or granted to an employee are chargeable to

tax. The Employers of labour are deemed to

be agents of the tax authority for the purpose

of remitting taxes deducted from salaries due

to employees. A person is deemed resident in

Nigeria if he resides in Nigeria for 183 days in

any 12-month period. Expatriates holding

residence permits are liable to tax in Nigeria

even if they reside in the country for less than

183 days in any 12-month period. Once

residence can be established, the relevant tax

authority of the territory is the tax authority

in which the taxpayer has his place of

residence or principal place of business.

Companies Income Tax (CIT)

Tax is payable for each year of assessment

of the profits of any company at a rate of 30%.

These include profits accruing in, derived

from, brought into or received from a trade,

business or investment. Also companies

paying dividends to its shareholders are first

of all obliged to pay tax on its profits at the

companies’ tax rate. Generally in Nigeria,

company dividends or other company

distribution whether or not of a capital

nature made by a Nigerian company is liable

to tax at source of 10%, however, dividends

paid in the form of bonus share or scrip

shares to individual share holders is not

subject to tax, where also, a company is a

shareholder in another company, then such

dividends are excluded from the profits

of the company for the purposes of

computation of tax.

P a g e | 31


Tax Treaties

Nigeria has a number of tax treaties

referred to as "double taxation" agreements

with a number of countries, these are

designed to ensure that the tax payable in

Nigeria on the profits of a Nigerian company

being remitted into the country are reduced

by the amount of "foreign Tax" paid abroad

and vice versa where an overseas company

receives profits from Nigeria that have

already been taxed in Nigeria. Some of these

countries include the UK 1st January, 1988,

France 1st January, 1991, The Netherlands

1st January, 1994, Belgium 1st January, 1990,

Canada 1st January, 1993 and Pakistan 1st

January, 1990.

Nigeria - Investment Incentive

Investing in any of the sectors of the

economy discussed in these 'Doing Business

in Nigeria' pages will require enormous

capital outlay. The Federal Government of

Nigeria taking cognizance of this fact, has

over the years formulated a number of

policies and measures to boost the investor’s

confidence in the country and to prevent the

prospective investor from being consumed by

the overheads costs it will encounter. The

incentives may be grouped under two

headings: Incentives to promote local

production and incentives to promote

exportation.

Incentives to Promote Locals

Pioneer Status

This is a tax holiday status granted by the

Government to industries regarded as high

priority for Nigeria’s economic development.

The grantee enjoys a tax relief for an initial

period of 3 years renewable for a further

period of 2 years. The Industrial Development

(Income Tax Relief) Act cap 179 Laws of

Federation of Nigeria declares a number of

industries as pioneer and any company

within the categorized industries producing

products declared as pioneer may apply to

the Nigerian Investment Promotion Council

to be conferred pioneer status.

Labour Intensive Production Mode

Where the area of investment requires

massive labour involvement, there will be a

15% tax concession for 5years. Massive

labour involvement in this regard will entail

hiring 1000 persons or more.

Local Value Added

This essentially applies to engineering

industries that use some finished imported

products as inputs. Such industries are given

a 10% tax concession for 5 years. The idea is

to encourage local fabrication rather mere

assemblage of completely knocked down

parts. Infrastructure Development: Where the

investor embarks on providing basic

infrastructure such as roads, water, electricity

where they do not exist, it will be entitled to

20% tax deduction of the costs of providing

such amenities.

Investment in Economically

Disadvantaged Areas

Investors in such areas are entitled to a

100% tax holiday for 7 years and an

additional 5% depreciation allowance over

and above the capital depreciation.

Research and Development Concessions

The law grants 120% tax-deductible

expenses where the research is to be carried

out in Nigeria, tax concessions are extended

to 140% where the research and

development is on local materials.

Corporate Governance

There is growing emphasis of corporate

governance best practices among Nigerian

companies. The Securities and Exchange

P a g e | 32


Commission, the Central Bank of Nigeria and

the Corporate Affairs Commission has

published best practices codes in support of

corporate governance in Nigeria. The SEC and

CAC have issued a Code of Corporate

Governance for Public Companies in Nigeria.

The CBN has also issued its Code for Banks

and Other Financial Institutions, and the

National Insurance Commission has issued a

Code for Insurance companies.

Foreign direct investment

Apart from the investment guarantee

assurance of the NIPC ACT countries are

welcome to execute and enter into bilateral

Investment Promotion and Protection

Agreements (IPPA) with the Nigerian

government.

P a g e | 33


Nigeria: Economic Overview

Prior to 2008, the Oil rich Nigeria was

plagued by political instability, inadequate

infrastructure and poor macroeconomic

management. This was because the military

rulers failed to diversify the economy away

from its over dependence on the capital

intensive oil sector which provides 95%

foreign exchange earnings and 80% of

budgetary revenues.

In August 2000, As a result of signing the

IMF stand-by agreement, Nigeria received a

debt restructuring deal from the Paris Club

and a $1 billion credit from the IMF, which

were contingent on economic reforms. In

April 2002, Nigeria pulled out of this program

after failing to meet the spending and

exchange rate targets which made it ineligible

for additional debt restructuring deals from

Paris club. In Nov 2005, Abuja won Paris Club

approval for a debt-relief deal that eliminated

$18 billion of debt in exchange for $12 billion

in payments.

Since 2008, the government began to show

the political will to implement the market-

oriented reforms urged by the IMF, such as

modernizing the banking system, removing

subsidies, and resolving regional disputes

over the distribution of earnings from the oil

industry. As a result of the reforms, the GDP

rose strongly in 2007-12 because of growth

in non-oil sectors and robust global crude oil

prices. President Jonathan has established an

economic team that includes experienced and

reputable members and has announced plans

to increase transparency, diversify economic

growth, and improve fiscal management.

Lack of infrastructure and also casual and

slow implementation of reforms are key

impediments to growth. The government has

been working towards addressing these

issues by developing stronger public-private

partnerships for roads, agriculture, and

power.

Nigeria's financial sector was hurt by the

global financial and economic crises, but the

Central Bank governor has taken measures to

restructure and strengthen the sector which

includes imposing mandatory higher

minimum capital requirements.

From 2003 to 2007, Nigeria attempted to

implement an economic reform program

called the National Economic Empowerment

Development Strategy (NEEDS). The purpose

of the NEEDS was to raise the

country's standard of living through a variety

of reforms, including macroeconomic

stability, deregulation, liberalization, privatiz

ation, globalization and also several measures

regarding issues like transparency, and

accountability.

NEEDS addressed basic deficiencies, such as

the lack of freshwater for household use and

irrigation, unreliable power supplies,

decaying infrastructure, impediments to

private enterprise, and corruption.

The government hoped that the NEEDS

would create 7 million new jobs, diversify the

economy, boost non-energy exports, increase

industrial capacity utilization, and improve

agricultural productivity. A related initiative

on the state level is the State Economic

Empowerment Development Strategy

(SEEDS).

http://en.wikipedia.org/wiki/Standard_of_living

http://en.wikipedia.org/wiki/Deregulation

http://en.wikipedia.org/wiki/Liberalization

http://en.wikipedia.org/wiki/Privatization

http://en.wikipedia.org/wiki/Privatization

P a g e | 34


Gross Domestic Product (PPP)

Gross Domestic Product (GDP) is the value

of all final goods and services produced

within a nation in a given year. A nation's GDP

at purchasing power parity (PPP) exchange

rates is the sum value of all goods and

services produced in the country valued at

prices prevailing in the United States in terms

of Dollar Currency.

Nigeria is a middle income, mixed economy

and emerging market, with expanding

financial, service, communications, and

technology and entertainment sectors. It is

ranked 30th in the world in terms of GDP

(PPP) as of 2013, and the 2nd largest

economy in Africa (behind South Africa) and

on track to become the richest country in

Africa in 2014 and is also on track to become

one of the 20 largest economies in the world

by 2020. Its re-emergent, though currently

underperforming, manufacturing sector is the

third-largest on the continent, and produces a

large proportion of goods and services for the

West African region.

Nigerian GDP at purchasing power parity

(PPP) has almost trebled from $170 billion in

2000 to $451 billion in 2012, although

estimates of the size of the informal sector

put the actual numbers closer to $630 billion.

Correspondingly, the GDP per capita doubled

from $1400 per person in 2000 to an

estimated $2,800 per person in 2012.

Nigeria's revenue from petroleum is about

$52.2 billion. This accounts about 11% of

official GDP figures. Therefore, though the

petroleum sector is important, it remains in

fact a small part of the country's overall

vibrant and diversified economy. In 2012, the

GDP was composed of the following sectors:

1. Agriculture: 40%;

2. Services: 30%;

3. Manufacturing: 15%;

4. Oil & Gas: 15%

http://en.wikipedia.org/wiki/Nigeria

http://en.wikipedia.org/wiki/South_Africa

http://en.wikipedia.org/wiki/Informal_sector

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Macro-Economic Trend

Macro-economic policies are framed by the

Government of Nigeria considering the

advices by the Central Bank of Nigeria. The

priorities are set by the Government and the

policies are framed accordingly. The trend of

macro-economic climate in Nigeria deals with

three important sectors of the economy. They

are (i) agriculture, (ii) services and (iii)

industries.

Agriculture:

Nigeria ranks 6th worldwide and 1st in

Africa in farm output.

Poor government policies and lacks

basic infrastructure facility towards

agriculture

Still, the sector accounts for 26.8% of

GDP and 2/3rd of the employment.

Import constraints limit the

availability of many agricultural and

food processing inputs for poultry

and other sectors.

Cocoa, rubber, processed foods are

exported

The sector suffers highly from

extremely low productivity

Agriculture has failed to keep pace

with the rapid population growth

Services:

Ranks 63rd in world in services output.

Low growth in this sector due to low

power generation.

The banking sector has witnessed a

significant growth over the last few

years

Rigid monetary policies to by the CBN

has made the functioning of banks

tough

The cost of doing business in Nigeria

is high and this has led to the slow

growth of private sector led economic

growth.

Even though there are signs of

improvement in the economy,

Nigeria’s high cost of doing business

includes setting up of essential

infrastructure, the threat of crime and

associated need for security counter

measures, the lack of effective due

process, and nontransparent

economic decision making, especially

in government contracting.

Industry:

Ranks 44th in world 3rd in Africa in

factory output.

In 2000, oil and gas exports accounted

for more than 98% of export earnings

The economy continues to witness

massive growth of "informal sector"

economic activities, estimated by

some to be as high as 75% of the total

economy.

The types of crude oil exported by

Nigeria are Bonny light oil, Forcados

crude oil, Qua Ibo crude oil and Brass

River crude oil.

Poor corporate relations with

indigenous communities, vandalism

of oil infrastructure, severe ecological

damage, and personal security

problems throughout the Niger

Delta oil-producing region continue to

plague Nigeria's industrial sector.

Nigerian high tariffs and non-tariff

barriers are gradually being reduced

The stock of U.S. investment is nearly

$7 billion, mostly in the energy sector.

http://en.wikipedia.org/wiki/Crude_oil

http://en.wikipedia.org/wiki/Bonny_light_oil

http://en.wikipedia.org/w/index.php?title=Forcados_crude_oil&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Forcados_crude_oil&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Qua_Ibo_crude_oil&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Brass_River_crude_oil&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Brass_River_crude_oil&action=edit&redlink=1

http://en.wikipedia.org/wiki/Niger_Delta

http://en.wikipedia.org/wiki/Niger_Delta

P a g e | 36


The Business Environment

For investors to invest in Nigeria, knowing

where the Nigerian economy stands in the

aggregate ranking on the ease of doing

business is useful. Also useful is to know how

it ranks relative to comparative economies

and relative to the regional average. The

economy’s rankings on the topics included in

the ease of doing business index provide

another perspective.

P a g e | 37


The business environment for the investors

is becoming more conducive over the years

due to high amount of reforms and presently

a new business can be started in 28 days

whereas, earlier it was taking 3 to 6 months.

Even though currently, the ranking is at 147th,

lot of reforms has been taking place so as to

attract the investors.

Getting essential services like electricity,

water, construction permits etc. were

bottlenecks earlier but due to extensive

reforms in this field, Nigeria has been

successful in attracting investors by

providing them essential utilities that is

important to run the business. But still, a lot

of reforms need to be done in regards to

providing a conducive atmosphere for the

investors.

Foreign Trade Zones & Foreign

Investments

The country offers investors abundant

natural resources, a low-cost labor pool, and

potentially the largest domestic market in

sub-Saharan Africa. Even though lot of

reforms are being taking place in terms of

reforms of building a conducive environment

for the investors, much of Nigeria’s market

potential remains unrealized because of a

long list of impediments to investment like

inadequate power supply, lack of

infrastructure, delays in the passage of

announced legislative reforms, an inefficient

property registration system, restrictive

trade policies, an inconsistent regulatory

environment, a slow and ineffective judicial

system etc.

Attracting foreign investments has been one

of the major objectives for the Government of

Nigeria and lot of reforms have been

undertaken including setting up of Foreign

Trade Zones which provides advantages with

respect to taxes and duties to encourage

exports which resulted in many foreign

companies setting up a manufacturing plant

to take this advantage.

Foreign Trade Zones/Free Trade Zones:

The Government of Nigeria (GON)

established the Nigerian Export

Processing Zone Authority (NEPZA) in

1992 to attract export-oriented

investment.

NEPZA allows duty-free import of all

equipment and raw materials into its

export processing zones. Up to 25

percent of production in an export

processing zone may be sold

domestically upon payment of applicable

duties.

Investors in the zones are exempt from

foreign exchange regulations and taxes

and may freely repatriate capital.

Oil and gas companies use the Onne FTZ

as a bonded warehouse for supplies and

equipment and for the export of liquefied

natural gas.

The GON also encourages private sector

participation and partnership with state

and local governments under the FTZ

program, resulting in the establishment

of the Lekki FTZ (owned by Lagos state),

and the Olokola FTZ (owned by the

federal government), and several such

FTZs to encourage trade.

Workers in FTZs may unionize, but may

not strike for an initial ten-year period.

P a g e | 38


Foreign Direct Investment:

Nigeria has made it into the top 20 global

destinations for FDI. Foreign Direct

Investment inflows have been growing

enormously over the course of the last

decade. Foreign Direct Investment inflows

have been growing enormously over the

course of the last decade. The Oil & Gas sector

receives 75% of China’s FDI in Nigeria. Other

major sources of FDI include Italy, Brazil, the

Netherlands, France and South Africa.

Some of the highlights of FDI in Nigeria:

The foreign direct investment (FDI) in

Nigeria in 2012 reached $7.2 billion.

Total FDI inflow amounted to $8.9

billion in 2011, mostly in the oil and gas

industry, and representing about 55

percent of total FDI in West Africa and

21 percent of total FDI in Africa.

This figure places Nigeria as the largest

recipient of FDI in Africa.

Some of the inflows from FDIs reaches

telecommunications, real estate

(including commercial and residential),

and manufacturing, but total

investment in the non-oil and gas sector

remains small relative to investment in

the oil and gas sector.

Investment Framework and Bodies:

In 1995, the Nigerian Investment

Promotion Commission Act was

instrumental in setting up framework for

Nigeria’s investment policy.

100% investment is allowed in all

industries except for oil & gas, where

investment is constrained to existing

Joint venture or a new production-

sharing agreement.

Investment from both Nigerian and

foreign investors is prohibited in a few

industries crucial to national security

like the production of arms and

ammunition, and military uniforms.

Prospects for Future Investment:

Nigeria has a range of resources and

industries ready for development and

global interest in the economy is rising.

Outside of petroleum, the country has

largely untapped mineral resources

including coal, iron ore, lead, tin and

zinc, and the country’s expanses of

arable land make agriculture and agro

processing viable and attractive.

Nigeria's telecom industry is flourishing

and certain areas of manufacturing, like

cement and beverages, are increasingly

drawing in investors.

Between 2001 and the end of 2009, the

telecom sector received USD18 billion in

FDI, on the back of a liberalized regime

that has made Nigeria Africa’s biggest

mobile market.

Towards developing the FDI inflows, the

GON has come up with a program called The

One Stop Investment Centre (OSIC) which is

an investment facilitation mechanism where

relevant Agencies of Government are brought

to one location (Single window clearance

system), co-ordinated and streamlined, to

provide efficient and transparent services to

investors. The services at the center include:

Simplified administrative procedures for

the issuance of Business approvals,

Permits/ Licenses

Company incorporation

Provision of investment information;

statistical data and information on the

P a g e | 39


Nigerian economy, Investment Climate,

Legal and Regulatory Framework as well

as Sector and Industry specific

information to aid existing and

prospective investors in making

informed business decisions.

Foreign Economic Relations

Nigeria's foreign economic relations

revolve around its role in supplying the world

economy with oil and natural gas, even as the

country seeks to diversify its exports,

harmonize tariffs in line with a

potential customs union sought by

the Economic Community of West African

States(ECOWAS), and encourage inflows of

foreign portfolio and direct investment. In

October 2005, Nigeria implemented the

ECOWAS common external tariff, which

reduced the number of tariff bands. Prior to

this revision, tariffs constituted Nigeria's

second largest source of revenue after oil

exports.

Banking

Central Bank of Nigeria (CBN) monetary

and exchange rate policies have come

more closely into alignment in 2012.

The IMF criticized the CBN in 2011 for

maintaining artificially-low interest rates

and intervening heavily in the foreign

exchange market to prevent devaluation

of the Naira.

In early 2011, real interest rates

remained negative, inflation hovered at

12 percent, and CBN reserves had fallen

from $62 billion in 2008 to $33 billion.

The CBN has since engaged in several

rounds of policy tightening, maintaining

core inflation levels in the 11-12 percent

range, despite the impact of electricity

price hikes, an almost 50% increase in

gasoline prices, significantly higher

global food prices, and flood-related

domestic food price pressures.

Foreign exchange reserves stood at $44

billion in December 2012.

The CBN has taken a highly expansive

view of its role in Nigeria’s economic

development, using its balance sheet to

support investment in the power sector,

small and medium enterprise (SME)

loans, and commercial agriculture.

Management of GON fiscal policy has

remained a persistent challenge due to

Nigeria’s heavy reliance on oil revenue

and its history of pro-cyclical spending

and civil service hiring during periods of

high global crude oil prices.

Inflation

Inflation Rate in Nigeria is reported by the

National Bureau of Statistics, Nigeria.

Inflation Rate in Nigeria averaged 10.43

Percent from 2006 until 2013, reaching an

all-time high of 15.60 Percent in February of

2010 and a record low of 3 Percent in July of

2006.

In Nigeria, the Consumer Price Index (CPI)

measures the change over time in prices of

740 goods and services consumed by people

for day-to-day living. The index weights are

based on expenditures of both urban and

rural households in the 36 states.

http://en.wikipedia.org/wiki/Customs_union

http://en.wikipedia.org/wiki/Economic_Community_of_West_African_States

http://en.wikipedia.org/wiki/Economic_Community_of_West_African_States

http://en.wikipedia.org/wiki/Common_external_tariff

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Trade & Current Account

Nigeria recorded a Current Account surplus

of 10.80% of the country's Gross Domestic

Product in 2012 as reported in the annual

report of the Nigeria Budget Office.

From 1980 until 2012, Nigeria Current

Account to GDP averaged 1.5 Percent

reaching an all-time high of 37.9 Percent in

December of 2008 and a record low of -18.7

Percent in December of 1986.

The Current account balance as a percent of

GDP provides an indication on the level of

international competitiveness of a country.

Usually, countries recording a strong current

account surplus have an economy heavily

dependent on exports revenues, with high

savings ratings but weak domestic demand.

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Balance of Trade

Nigeria recorded a trade surplus of 3.11

USD Billion in June of 2013. Balance of Trade

in Nigeria is reported by the Central Bank of

Nigeria. From 2002 until 2013, Nigeria

Balance of Trade averaged 2.3 USD Billion

reaching an all-time high of 6.2 USD Billion in

May of 2008 and a record low of -0.4 USD

Billion in June of 2003. Exports of

commodities (oil and natural gas) are the

main factor behind Nigeria's growth and

accounts for more than 95% of total exports.

Nigeria Corporate Tax Rate

The Corporate Tax Rate in Nigeria stands at

30%. It is reported by the Federal Inland

Revenue Service, Nigeria and the Sales tax has

been standing at 5%

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Consolidated information of the Economy of Nigeria

Currency Nigerian naira (N) (NGN)

Trade organizations OPEC

Statistics

GDP $451 billion (2012)

GDP growth 7.1% (2012) (driven by non-oil production activities)

GDP per capita $2,800 (2012)

GDP by sector agriculture: 40%; services: 30%; manufacturing: 15%; oil:

14%

Labour force 48.53 million

Labour force by occupation services: 32%; agriculture: 30%; manufacturing: 11%

Unemployment 24%

Ease of doing business rank 131

External

Exports $97.46 billion (2012)

Main export partners United States 16.8%

India 12.1%

Netherlands 8.6%

Spain 7.8%

Brazil 7.6%

United Kingdom 5.1%

Germany 4.9%

Japan 4.1%

France 4.1%

Imports $70.58 billion

Main import partners China 18.2%

United States 10.0%

India 5.5%

FDI stock $71.59 billion

Gross external debt $10.1 billion

Public finances

Public debt 18.8% of GDP

Revenues $23.48 billion

Expenses $31.61 billion

Credit rating Standard & Poor's

B+ (Dom ic)

Outlook: Stable

Fitch

BB-

Outlook: Negative

Foreign reserves $42.8 billion

http://en.wikipedia.org/wiki/Nigerian_naira

http://en.wikipedia.org/wiki/OPEC

http://en.wikipedia.org/wiki/Gross_domestic_product

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

http://en.wikipedia.org/wiki/Economy_of_Nigeria#cite_note-National_Bureau_of_Statistics-1

http://en.wikipedia.org/wiki/Economy_of_Nigeria#cite_note-National_Bureau_of_Statistics-1

http://en.wikipedia.org/wiki/Ease_of_doing_business_index

http://en.wikipedia.org/wiki/Economy_of_Nigeria#cite_note-World_Bank_and_International_Financial_Corporation-2

http://en.wikipedia.org/wiki/United_States

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Netherlands

http://en.wikipedia.org/wiki/Spain

http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/United_Kingdom

http://en.wikipedia.org/wiki/Germany

http://en.wikipedia.org/wiki/Japan

http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/United_States

http://en.wikipedia.org/wiki/Foreign_direct_investment

http://en.wikipedia.org/wiki/External_debt

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

http://en.wikipedia.org/wiki/List_of_countries_by_credit_rating

http://en.wikipedia.org/wiki/Economy_of_Nigeria#cite_note-guardian-6

P a g e | 43


Nigeria: Industrial Analysis

There are numerous investment opportunities in

all Nigeria's business sectors. The Trade Invest

Nigeria business sector list is comprised mainly

of industry and market sectors that have the

greatest investment potential. Currently,

agriculture is Nigeria's sector with the most

investment potential. Other promising industry

sectors include banking, financial services,

clothing and textiles, telecommunications,

manufacturing, oil and gas, mining and tourism.

1. Energy

With proven oil reserves exceeding 9 billion tons,

Nigeria is one of the largest hydrocarbon

feedstock producers in Africa, and ranks twelfth

place worldwide. Nigeria is a member of OPEC,

the Organisation of Petroleum Exporting

Countries. Natural gas reserves account for 5.2

trillion cubic meters, making it the world’s

seventh biggest resource. The country relies

heavily on its petroleum industry for economic

growth – the sector accounts for about 80% of

government revenues and provides 95% of

foreign exchange. Oil was first discovered in

Nigeria in the 1950s, and the company most

identified with the country’s petroleum industry

is Shell. SPDC, Shell’s joint venture with the

Nigeria National Petroleum Corporation (NNPC),

accounts for around half of Nigeria’s total oil

production. Other oil majors present in the

country include Total, Elf, ExxonMobil,

ConocoPhillips, Chevron and Eni. In 2010, Nigeria

was producing around 2 million barrels of oil a

day. Nigeria’s gas reserves are more than three

times greater than its oil reserves, and the

government is committed to increasing gas

production for domestic supply as well as for

export. The Trans-Saharan Gas Pipeline currently

in development will enable Nigeria to supply the

continent of Europe with gas. The country’s

contribution to international liquid natural gas

supply is large – Nigeria provides 10% of the

world’s LNG.

Despite its preeminent role in global oil

production, the country’s domestic power supply

is under-developed, and shortages of electricity

have hampered industrial growth. The

government is working to capitalize on its

thriving petroleum sector to drive economic

growth, while at the same time seeking to

leverage its natural resources to ensure sufficient

energy supply at home – since there can be no

doubt that addressing the power supply problem

remains the key stimulus needed to jump-start

the country’s economy if it is to be one of the top

20 economies of the world as envisioned in the

2020 blueprint.

A New Era for Oil

Reforming the industry and ramping up

production

The upstream oil industry is the lifeblood of

Nigeria’s economy; the country ranks as Africa’s

biggest oil producer and eleventh in the world for

crude, its economy depending on oil for 80% of

its foreign earnings. The country has total oil

reserves of 36 billion barrels. After Nigeria joined

OPEC in 1971, the Nigerian National Oil

Corporation (NNOC) was established, later

becoming Nigerian National Petroleum Company

(NNPC) in 1977. This giant para-statal, with all its

subsidiary companies, currently controls and

dominates all sectors of the oil industry, both

upstream and downstream.

Production is focused chiefly in the Niger Delta,

one of the world's largest wetlands, in the south

of the country, and offshore in the Bight of Benin,

Gulf of Guinea and Bight of Bonny. In the Niger

Delta, where attacks on oil facilities by militants

from the Movement to Emancipate the Niger

Delta (MEND) have brought down production for

some years, efforts to find a solution to the

conflict finally bore fruit in 2009. An amnesty

P a g e | 44


offered in October 2009 saw some 8’000

militants handing in their arms; those who turned

in their weapons were offered a regular income

and job training. The amnesty, together with new

commitments from the government to share the

revenues from oil with the people of the Niger

Delta, brought about a cessation of violence,

which held well into 2010. The programme was

stalled by the illness and subsequent death of

President Umaru Musa Yar’Adua, but the new

president, Goodluck Jonathan, himself a native of

the Niger Delta, has promised to renew efforts to

implement the provisions of the amnesty. Despite

some outbreaks of violence, the relative calm in

the Delta has not yet broken down, and

production remains much higher in 2010 than in

previous years: from 1.75 million barrels per day

(bpd) in July 2009, Nigeria’s crude oil production

reached 2.08 million bpd of crude oil in May

2010, the highest level of production since

December 2007.

In spite of the problems in the region in recent

years, Nigeria’s huge wealth of oil makes it

singularly attractive to the multinational majors,

most of which are represented in Nigeria: Total,

Chevron, ExxonMobil, Elf, Shell, ConocoPhillips

and Eni, among others, all have operations in the

country. More recently, multinational oil

companies have been focusing their attention on

offshore projects such as the Usan field. They and

their likes promise much for the future of oil

industry investment, since they allow the oil

majors to diversify their investment in the

country and bypass the troubles of the Niger

Delta region.

Cooperating on oil production

As 2009 drew to a close, the Organization of

Petroleum Exporting Countries (OPEC) prepared

for a sharp escalation in output as Nigeria

pressed ahead with repairing its damaged oil

infrastructure. In a special report, the

International Energy Agency (IEA) acknowledged

the welcome success of the country’s amnesty

programme aimed at militant groups responsible

for carrying out attacks at oil installations and

pipelines in the Niger Delta region.

From 1.75 million barrels per day (bpd) in July

2009, Nigeria’s crude oil production was up to

2.08 million barrels per day of crude oil by May

2010, the highest level since December 2007.

Paradoxically, the increase comes at a time when

energy forecasters are predicting slowing growth

in global oil demand in the years ahead, while

some of OPEC’s 12 member nations, notably

Nigeria, are ramping up their capacity to pump

oil. Collectively, OPEC members supply 40% of

the world's oil.

Nigeria, a high-profile OPEC producer that has

been troubled by security problems in recent

years and has suffered involuntarily sharp cuts in

its oil output as a result, is now seeing a welcome

upturn in its fortunes. It is on the path to getting

its petroleum sector back on track with new

projects and the restoration of long-time disabled

production facilities.

Natural Gas in Nigeria

Reforming policy, ending flaring and

building infrastructure

The natural gas sector is heading for exponential

growth as new infrastructure is developed and

the government implements zero gas flaring

policies. With the largest natural gas reserves in

P a g e | 45


Africa, and ranking seventh in the world, Nigeria

is eager to capitalise on this key asset after many

years of wasteful flaring from oil fields –

according to the 2008 BP Statistical Energy

Survey, Nigeria has proven natural gas reserves

of 186 trillion cubic metres (Tcf), or almost 3% of

the world total. The country’s Master Plan for

Gas, drawn up in 2008 and set in motion in 2009,

will help it to reap the rewards of a global ‘dash

for gas’, while new projects coming online will

enable Nigeria’s gas to benefit domestic

consumers as well as international buyers.

Gas Policy Reform

In 2008, the government prepared a Gas Master

Plan that was intended to promote natural gas

production and encourage the supply of natural

gas to domestic power stations so as to help

alleviate the country’s electricity shortages. The

implementation of the Master Plan is under way,

and the Petroleum Industry Bill intended to be

passed by the end of 2010 includes provisions for

supporting the Gas Master Plan. The Bill will

establish a gas market aggregator to manage the

country’s gas supplies and will require companies

to acquire a separate licence for exporting gas.

The tax rate for gas will be set at a lower level

than that of oil, to encourage the production of

natural gas.

One of the major elements holding back the

development of the industry was overcome in

June 2010, when the government launched a new

pricing structure for gas that would see gas prices

raised from USD0.20 per million metric BTU to

USD1 per million metric BTU. Higher prices will

enable gas producers to profit from selling their

gas to domestic power supply companies as well

as from export, creating incentives for producing

gas for the domestic market.

Nigerian Liquid Natural Gas

Nigeria’s timely emerging capacity

Strong signs of an upturn in demand for liquefied

natural gas (LNG) emerged as 2009 drew to a

close and Nigeria prepared to increase capacity,

with some analysts predicting the global thirst for

LNG will double by 2020, easily topping 400

million tonnes. The global market for LNG

expanded by 70% between 2002 and 2008 and

global trade in LNG rose 7.9% in 2009, even as

the recession caused gas use worldwide to drop.

LNG production capacity is expected to grow by

some 50% worldwide over the next four years.

South East Asia and Europe look set to lead a new

clamor for LNG in their bid to diversify supplies

as new regasification facilities come on stream.

Liquid Natural Gas in Nigeria

Nigeria is poised to be a key beneficiary as global

markets emerges from the recession. The quest

for clean energy and the demand for fuel to re-

ignite economic growth are the primary factors

driving the resurgence in the sector. Nigeria is

speedily moving towards being a major gas

player globally, and LNG is set to be a large

contributor to GDP as new capacity comes on

stream.

Nigeria came on the LNG scene with the

formation of the Nigeria Liquefied Natural Gas

Company (NLNG), a company jointly owned by

the NNPC (49%), Shell (25.6%), Total (15%) and

Eni (10.4%).The consortium’s first major project

was at Finima, Bonny Island, in Rivers State,

where the facility’s first train came on stream in

February 2000, swiftly followed by a second and

trains 3 (2002), 4 and 5 (2005). Train 6 became

operational in the last quarter of 2007. The plant

now has total capacity of some 22 million tonnes

per annum (mtpa) of LNG, 4 mtpa of LPG and

condensate from 3.5 bcf/d feedgas intake. Plans

for building Train 7 that will extend capacity to

around 30 mtpa LNG are at an advanced stage;

when Train 7 comes on stream, the government

will earn around USD1 billion a year in revenue

from gas exports. In May 2010, Shell announced

that it would soon begin supplying the NLNG

plant at Bonny with gas from its new gas

gathering facility at its Gbaran-Ubie Integrated

Oil and Gas Project in Bayelsa State; the gas

P a g e | 46


gathering facility represents a major step by Shell

towards dealing with the waste of natural gas

through gas flaring.

Electricity in Nigeria

Powering up the electricity sector

Nigeria’s economic development has been held

back by the underdevelopment of the power

sector. Despite being one of the world’s major

exporters of petroleum, the country has been

unable to produce enough electricity to meet

domestic demand. But the new president,

Goodluck Jonathan, took office vowing to use the

remaining year of his term to alleviate the

country’s electricity woes. With efforts to reform

the sector under way, there is reason to hope that

electricity supply will be improved in the coming

years.

Reforming Electricity Generation

The Power Holding Company of Nigeria (PHCN)

is responsible for Nigeria’s energy generation,

while the Nigerian Electricity Regulatory

Commission (NERC) is the regulator for the

sector. At the moment, Nigeria is capable of

generating around 3’500 MW of electricity, well

below the country’s consumer and business

needs, despite government investment of around

USD1 billion annually in the sector. The

government is aiming to increase capacity to

10’000 MW by 2011. To guide the redevelopment

of the sector, President Jonathan in June 2010

announced the institution of a Presidential Action

Committee on Power, to be chaired by the

President, and a Presidential Task Force on

Power. The Presidential Action Committee is to

draw up new policy for the future of the power

sector, and the Task Force is to set concrete goals

to be achieved within the lifespan of the present

government.

One solution under consideration is the

concessioning of electricity generating

infrastructure to investors. Under this proposal,

PHCN would be broken up into 11 regional

electricity distribution companies and six

generating companies; the sale of PHCN’s

infrastructure could bring the government up to

USD7 billion in revenues. The government hopes

to pass the distribution infrastructure on to state

governments, while involving the private sector

in generation. The first distribution companies,

the Port Harcourt Distribution Company and the

Eko and Ikeja Distribution Companies at Lagos,

are to be sold by the end of 2010. The State

Governments of Rivers, Bayelsa, Akwa Ibom and

Cross Rivers have all expressed interest in

acquiring the Port Harcourt facility.

Alternative Energy

Biofuels, solar and wind climb up the agenda

Nigeria has continued with its ambitious

blueprint to develop a thriving energy industry

based on non-fossil fuels throughout 2009 and

2010. The Nigerian economy remains dependent

on the country’s petroleum resources, but as the

world moves towards cutting carbon emissions

and away from fossil fuels, Nigeria is leveraging

its other resources to ready itself for the new era

in energy. Biofuels, solar and wind energy are all

being developed to help grow the non-oil

economy and create a sustainable future for

Nigeria’s energy sector.

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The Nigerian National Petroleum Commission

(NNPC) launched a Renewable Energy Division in

2005, as a result of which the organisation

developed a biofuels programme which should

see the country saving between USD100 million

and USD130 million on energy every year. The

Renewable Energy Division is also in charge of

coordinating Nigeria’s activities under the Clean

Development Mechanism of the Kyoto Protocol.

In early 2010, NNPC announced its intention to

review its renewable energy business model in

order to maximize the efficiency and profit of the

Renewable Energy Division, in line with the

ongoing reforms in Nigeria’s oil and gas sector.

Nigeria’s focus on increasing its sustainable

energy profile is aided by external partners: in

June 2010, the World Bank agreed to allocate

USD200 million to the development of renewable

energy projects in Nigeria. The US Trade and

Development Agency (USTDA) gave Nigeria

USD323’000 in June 2010 to help draw up a

framework for using renewable energy in

electricity generation.

Growing the Biofuels Sector

With vast areas of arable land and an excellent

climate for the cultivation of various crops,

Nigeria’s potential for biofuels production is

virtually unparalleled on the continent. A number

of incentives are in place to establish a thriving

fuel ethanol industry using agricultural products.

They include pioneer status and a host of tax

breaks for developers including a waiver on

import and customs duties, Value Added Tax,

long-term preferential loans and other benefits.

2. Banking and Finance

Directing liquidity into Nigeria's real

economy

After years of underperformance, followed by the

2008/9 global financial crisis, in turn followed by

the 2009 corruption scandal, Nigeria’s powerful

banking sector now seems to be better placed

than ever before to help develop the country’s

economy. Despite the difficult economic

circumstances, the Central Bank of Nigeria’s

reform programme, begun in 2004, is still

showing results. To see how far the banking

sector has come, it would help to see how much

has happened in the last 50 years.

Before 2004: Immaturity and Failure

Under British rule, Nigeria effectively had no

formal financial controls. The first steps toward

creating a developed banking sector came in

1948, with the creation of an inquiry to

investigate banking practices. The GD Paton

report, which came from the inquiry, made it

clear something needed to be done to regulate

the banks. As a result, 1952 saw the Banking

Ordinance Act, Nigeria’s first banking law. Banks

now had to obtain a licence to prove they had

enough funds to operate, and were subject to

governmental supervision.

The next step forward came with the

establishment of a central bank under the 1958

CBN act, which began operating in mid-1959. The

CBN would oversee the distribution of Nigeria’s

currency, control and regulate the banking sector,

such as it was – there were only three foreign

banks in the country at the time and two

domestic banks, each with 20 branches – lend to

these banks and execute government monetary

policy decisions.

Nigeria declared independence in 1960. Despite

the banking sector’s auspicious start, much of the

next 25 years saw huge corruption and

stagnation in the sector. It was claimed that

nationalization in the 1970s and early 1980s

P a g e | 48


would help protect and reform Nigeria’s banks,

but in fact nationalization often just made it

easier for the country’s leaders to line their

pockets. By 1986, a badly capitalized and

uncompetitive sector was almost completely

state-controlled.

Below given is a brief overview of three major

banking institutions functioning in Nigeria:

(a) FirstBank of Nigeria Plc

Mission

To remain true to our name by providing the best

financial services possible

Dynamic Evolution

First Bank of Nigeria Plc (FirstBank), established

in 1894, is a premier bank in West Africa and the

leading financial services solutions provider in

Nigeria. The Bank has international presence

through its subsidiary, FBN Bank (UK) Limited in

London with a branch in Paris, and its

Representative Offices in Johannesburg and

Beijing. With 1.3 million shareholders globally,

FirstBank is quoted on The Nigerian Stock

Exchange (NSE), where its issued and paid up

share capital as at March 31, 2009 was 24.86

billion units. FirstBank also has an unlisted Global

Depository Receipt (GDR) programme.

As the global operating environment evolve over

the decades, FirstBank has kept pace, responding

satisfactorily to the increasingly dynamic needs

of its customers, investors, regulatory authorities,

host communities, employees and other

stakeholders. Through a sustained strategy, with

a trans-generational relevance approach, the

Bank has continuously boosted its substantial

customer-base of both individuals and

institutions which cut across all segments in

terms of size, structure and sectoral affiliations.

Leveraging experience that spans over a century

of dependable service, FirstBank has continued to

build relationships and alliances with key sectors

of the economy that have been strategic to the

wellbeing, growth and development of the

country. With its huge asset base and expansive

branch network, as well as continuous re-

invention, FirstBank has created one of Nigeria’s

strongest banking franchises, and remains a

market leader in the nation’s financial services

industry.

Delightful Returns and Superior Value

The 2005 consolidation of the financial services

industry in Nigeria, as anticipated, boosted

FirstBank’s performance indices, as

accompanying opportunities yielded an upbeat

response to market dynamics. Today, the Bank

remains one of the most profitable financial

groups in Nigeria.

In repositioning the Bank for both domestic and

global competition, it had recourse to raising

additional capital. The Hybrid Offer, popularly

called “The Big Offer”, set an unprecedented

landmark with a subscription in excess of 750%,

and was lauded as the biggest and most

successful in the history of public offers in

Nigeria. The Bank’s epoch-making achievement

was again reinforced when it became the first

quoted company in Nigeria to achieve the feat of

hitting the trillion naira mark in market

P a g e | 49


capitalisation, the clearest evidence of the

market’s estimation of its worth. Till date, and

despite the downturn in the stock market, the

Bank remains the most capitalised stock on the

floor of The Nigerian Stock Exchange (NSE).

Growth Strategy and Expansive Reach

FirstBank’s growth strategy is anchored on

leveraging the windows of opportunity presented

by the ongoing reforms in the industry and the

global economies, which have allowed it to better

position its strengths and value proposition,

while raising the industry’s competition stakes.

The Bank’s strategy is driven by the two critical

imperatives of modernisation and growth. With

over 550 business locations in Nigeria, the Bank

has one of the largest domestic sales networks in

the country, all on-line and real time. As a market

leader in the financial services sector, FirstBank

pioneered initiatives in international money

transfer and electronic banking in the country,

and is arguably Nigeria’s most diversified

financial services group, serving more than 4.2

million customers.

The Bank’s growth strategy is hinged on its

continued network expansion, product

development, mergers and acquisitions, and

growth of its international footprint.

Progressive Globalisation

In its early years, FirstBank worked closely with

the colonial governments of British West Africa

by performing the traditional functions of a

central bank, including the issue and distribution

of specie in the West African sub-region.

Subsequently, the Bank recorded impressive

growth, opening its first branch office in Accra,

Ghana in 1896, and a second branch in Freetown,

Sierra Leone two years later in 1898. By 1963,

the Bank had 114 branches in West Africa. These

marked the beginning of the Bank’s international

banking operations.

In 2002, FirstBank established a wholly owned

banking subsidiary in the United Kingdom, FBN

Bank (UK) Limited, regulated by the Financial

Services Authority (FSA). In this respect, the Bank

is the first Nigerian bank to own a full fledged

bank in the UK. In 2007, FBN Bank (UK) obtained

authorization to set up its Paris office to serve as

a marketing base to service francophone West

Africa. FirstBank also has Representative Offices

in Johannesburg, South Africa (est. 2004) and

Beijing, China (est. 2009).

With the Bank’s global reach through its

operations in the United Kingdom, France, South

Africa, and China, it provides prospective

investors wishing to explore the vast business

opportunities that abound in Nigeria, an

internationally competitive world-class brand

and a credible financial partner.

The Financial Supermarket

FirstBank has nine (9) subsidiary companies in

Nigeria, which provide a comprehensive range of

retail and corporate financial services, including

capital market operations, private equity/venture

capital, pension fund management, registrarship,

trusteeship, mortgages, insurance brokerage,

bureau de change and microfinance.

These diverse operations in the financial services

industry, with widespread service outlets, ensure

the foothold of the FirstBank group as a foremost

financial services provider in Nigeria, making

enormous contributions to the growth and

development of the national economy and

delighting all our stakeholders.

A Service and Nation Building Model

In the last decade, by playing key roles in the

Federal Government of Nigeria’s privatization

and commercialization scheme, FirstBank has led

the financing of private investment in

infrastructure development in the Nigerian

economy.

A key element of the Bank’s strategy is its

continued focus on retail banking/consumer

P a g e | 50


financing, gradually shifting towards a high yield

diversified portfolio by aggressively targeting the

middle class consumer market.

The market opportunity is evident in the fact that

consumer spending, which is a major driver of

domestic demand in developed economies, still

constitutes a relatively lower percentage of GDP

in Nigeria.

The business of FirstBank is operated through

branches which serve as comprehensive product

engines, overseen by Business Development

Offices and Regional Directorates. These are

designed within broad limits, to facilitate and

give direction to market activities within the

region.

Corporate Governance Pacesetter

A best-fit corporate governance promoter,

FirstBank’s corporate governance practice

remains at the industry’s leading-edge. The

Bank’s continuing commitment to strong

corporate governance and improved disclosure

levels in the reporting of its financials was

reinforced in November 2008 when it won The

Nigerian Stock Exchange Quoted Company of the

Year Award. The Bank also emerged joint winner

of the NSE’s President’s Merit Award for the

banking sector “for the presentation, quality and

depth of its annual report and accounts for the

year 2007”.

FirstBank is one of the first two quoted

companies in Africa to adopt the International

Financial Reporting Standard (IFRS). Consistent

with its pace-setting good governance principles,

the IFRS regime facilitates transparency,

understanding, relevance, reliability and

comparability of the Bank’s qualitative financial

statements comparable with global standards.

(b) Commerzbank Ltd

Commerzbank was founded in 1870 by Hanseatic

traders. A first foreign office in London was

opened soon after foundation of the bank and

since then the bank has always pursued the

growth of international business.

In 2008, the bank acquired Dresdner Bank -

another German banking giant. Today,

Commerzbank is the key provider of financial

services in Germany. Germany, herself, is the

third largest economy and has often ranked #1 in

exports the recent years - thanks to its image

“Made in Germany”.

From Correspondent Banking to Institutional

banking

Since the 1960ies the bank was active in

correspondent banking. Confirmation of Letters

of Credit, Bank Guarantees, Project

Finance/Buyer Credits, Payments and Reserve

Management for the Central Bank of Nigeria has

been offered since then.

During the last ten years, Commerzbank has

broadened the eligible product range and

deepened the relationships with Nigerian

Financial Institutions, the Central Bank and

governmental agencies as well as selected

corporate (jointly with indigenous banks).

Nowadays, the bank has a diversified portfolio of

transactions in the areas of trade finance, project

finance, advisory, reserve management cash and

liquidity management and other Investment

Banking. This is backed by a considerable risk

appetite which is defined based on our extensive

research and dedicated risk management

functions for Nigeria within the bank.

Commerzbank’s Global Footprint:

More than 2,300 Offices in more than 60

Countries

Commerzbank is present in more than

sixty countries and maintains client

relationships to approx. 11mn private

clients, 150,000 corporate clients and

P a g e | 51


6,000 banks, incl. Central Banks and

Supranationals.

Furthermore, through its Financial

Institutions Division, the Corporate

Finance/Debt Capital Markets Division

and Public Finance affiliate (Eurohypo)

the Commerzbank Group provides

financial products and services to

governments, government agencies and

state governments/local authorities.

Commerzbank acquired Dresdner Bank in

2008. Two German banking giants which

both existed for more than 140 years,

joined forces and formed the most

important German bank by customer size,

German deposit volume, German market

share in credit allocation and

international trade finance

Commerzbank History in Nigeria

1960: 50 years ago a first Commerzbank

delegation visited the country in order to assess

the market possibilities Nigeria would generate

once the independence would have been

achieved end 1960. The documentation that was

available in Commerzbank’s archives proved that

the bank saw a great potential for Nigeria and

that the bank envisaged to participate

accordingly.

1981: Commerzbank plans to open a

Representative Office in Lagos. However, the

Latin American Debt Crisis hit the bank and

global expansion was halted.

2007: The Board of Directors decided to put a

strong growth emphasis on Africa and opened

offices in Lagos, Addis Ababa and Tripolis. Lagos

has been considered the main growth driver out

of the three locations.

Commerzbank is committed to Nigeria’s

Economic Growth and her Legitimated Position in

the Global Economy

5.2% of Nigeria’s combined global

importation in 2009 was financed and/or

settled via Commerzbank. 37.2% of trade

with Germany was financed and handled

via Commerzbank.

Although the ongoing Nigerian banking

sector restructuring changed the risk

perception in the financial markets about

the Nigerian banking industry. However,

Commerzbank with its local research

network and professional understanding

of the environment will play a pivotal role

in supporting the Nigerian financial

sector in its ambition to become a

Regional player with global reach.

Strong relationships with 17 Nigerian

banks.

Honorary Financial Advisor for the

Nigerian-German Energy Partnership,

advising both the Nigerian as well as the

German partner.

(c ) Guaranty Trust Bank Plc

Guaranty Trust Bank plc is a foremost Nigerian

financial institution with vast business outlays

spanning Anglophone West Africa and the United

Kingdom. The Bank presently has an Asset Base

of over 1 trillion Naira, shareholders funds of

over 190 million Naira and employs over 5,000

people in Nigeria, Gambia, Ghana, Liberia, Sierra

Leone and the United Kingdom.

The Bank has a corporate banking bias and

strong service culture that have enabled it record

consistent year on year growth in clientele base

and key financial indices since its inception in

1990. Its operation style, staff conduct and

service delivery models are built on 8 core

principles aptly dubbed; The Orange Rules in line

with the Bank’s vibrant Orange corporate colour.

History

Guaranty Trust Bank plc was incorporated as a

P a g e | 52


limited liability company licensed to provide

commercial and other banking services to the

Nigerian public in 1990. The Bank commenced

operations in February 1991, and has since then

grown to become one of the most respected and

service focused banks in Nigeria.

In September 1996, Guaranty Trust Bank plc

became a publicly quoted company and won the

Nigerian Stock Exchange President’s Merit award

that same year and subsequently in the years

2000, 2003, 2005, 2006, 2007, 2008 and 2009. In

February 2002, the Bank was granted a universal

banking license and later appointed a settlement

bank by the Central Bank of Nigeria (CBN) in

2003.

Guaranty Trust Bank undertook its second share

offering in 2004 and successfully raised over N11

billion from Nigerian Investors to expand its

operations and favorably compete with other

global financial institutions. This development

ensured the Bank was satisfactorily poised to

meet the N25 billion minimum capital base for

banks introduced by the Central Bank of Nigeria

in 2005, as part of the regulating body’s efforts to

sanitize and strengthen Nigerian banks.

Post-consolidation, Guaranty Trust Bank plc

made a strategic decision to actively pursue retail

banking. A major rebranding exercise followed in

June 2005, which saw the Bank emerge with

improved service offerings, an aggressive

expansion strategy and its vibrant orange

identity.

In 2007, the Bank entered the history books as

the first Nigerian financial Institution to

undertake a USD350 million regulation S

Eurobond issue and a USD750 million Global

Depositary Receipts (GDR) Offer. The listing of

the GDRs on the London Stock Exchange in July

that year made the Bank the first Nigerian

Company and African Bank to be listed on the

main market of the London Stock Exchange.

In December 2009, Guaranty Trust Bank

successfully completed the first tranche of its

USD200 million corporate bond. Funds raised

from this exercise will be used to increase the

depth of its operations in West Africa and Europe

in the next couple of years.

Culture

The Bank’s culture is tied to eight guiding

principles called the Orange Rules; Simplicity,

Professionalism, Service, Friendliness, Excellence,

Trustworthiness, Social Responsibility and

Innovation.

Its value system is hinged on professionalism,

ethics, integrity, and superior customer service. It

maintains a culture of excellence and goes to

great lengths to actualize the popular phrase; The

Customer Is King and deliver to its customers at

all times.

The Bank operates a very competitive

environment, where people can learn its

corporate culture and apply themselves in all

they do. Employees are addressed by their first

names from entry level through to the Managing

Director- no “Sirs or Madams”. In addition it

operates an open door policy to foster a feeling of

equality amongst staff and ensure everyone is

accessible at all times.

Operations

The Bank's primary business since inception has

been the provision of a full range of financial

services to its select spectrum of corporate and

individual clients. It employs the best people,

processes and technology to offer services that

include but are not limited to retail banking,

loans and advances, money market activities and

foreign exchange operations.

The Bank also offers specialized investment

banking services, which include medium to long

term capital financing and fund management

services to the middle and top end spectrum of

the Nigerian business market. This segment

comprises top-level multinational companies,

medium to large indigenous enterprises and high

P a g e | 53


net worth individuals. Its businesses are also

segmented along major industry lines, which

include Manufacturing, Trade, Oil & Gas,

Telecommunication, Aviation and Government.

Products

Guaranty Trust Bank plc provides a full range of

commercial, investment and retail banking

products/services to its discerning corporate,

commercial and retail customers.

Widely recognized as a pace setter and industry

leader, the bank is accredited with such

innovations as the introduction of online banking

in 1990, making it possible for customers to

access their accounts and conduct transactions

from any branch in the bank’s network. In 2006,

the bank launched GTConnect, a fully interactive

service contact centre that allows customers

conduct 90 % of banking transactions via phone

from anywhere in the world. In 2009, the bank

launched the GTCrea8 student account to enable

undergraduates take greater control of their

finances and encourage financial discipline in the

future leaders of tomorrow.

The bank’s other innovative products and

solutions include an E-branch, where customers

can perform transactions electronically with no

human interface; Drive Through banking, a

service which enables customers to withdraw

funds and make enquiries from the comfort of

their cars as well as GTBank on wheels, a fully

mobile banking branch. The bank’s internet

banking platform is a notch above its

contemporaries in that it is enabled to support

inter-bank transfers.

The bank also offers excellent debit and credit

card services. Guaranty Trust Bank is credited

with being the first company to issue a Naira

denominated MasterCard – an innovative card

solution that can be used in over 210 countries

worldwide to make payments and receive cash in

the local currency of any country when abroad.

Customers of the bank are kept abreast of

transactions on their accounts through GeNS, the

bank’s SMS and electronic transaction

notification system.

Nigeria Banking Developments 2010:

A New Broom Sweeps Clean

In 2010, the banking sector in Nigeria has faced

its biggest upheaval since 2004 when former

Central Bank of Nigeria (CBN) governor Charles

Soludo initiated the first round of banking

reform. When he took over in 2009, the new

governor, Sanusi Lamido Sanusi, made it clear

that Soludo’s reforms were just the beginning.

Before becoming governor, Sanusi worked in

Nigeria’s banking sector, where he was known for

developing a culture of risk management. It is

clear that he has carried this approach with him

to the CBN.

In August 2009, just a month into Sanusi’s tenure,

the apex bank bailed out five leading Nigerian

banks – Afribank, Intercontinental Bank, Union

Bank, Oceanic Bank and Finbank – with 400

billion naira (USD2.7 billion) of public money,

followed by the dismissal of the banks’ respective

bosses Sebastian Adigwe, Erastus Akingbola,

Bartholomew Ebong, Cecelia Ibru and Okey

Nwosu.

P a g e | 54


“We had to move in to send a strong signal that

such recklessness on the part of bank executives

will no longer be tolerated,” he said. Sixteen

senior members of the banks were then charged

by the Economic and Financial Crimes

Commission (EFCC) with offences ranging from

fraud, to lending to fake companies, giving loans

to companies they had a personal stake in and

conspiring with members of the stock market to

raise share prices.

Despite the furore that followed, with some

dubbing the governor’s managerial style the

‘Sanusi tsunami,’ in October 2009 he also sacked

Francis Atuche, Charles Ojo and Ike Oraekwotu,

of Bank PHB, Spring Bank and Equitorial Trust

Bank for allowing their banks’ liquidity to run

dangerously low. The bank chiefs were also

referred to the EFCC to face charges, although

Oraekwotu was later returned to his post after

Globacom boss Dr Mike Adenuga agreed to

provide ETB with an emergency injection of

USD150 million in capital. Two other banks,

Wema and Unity, have until this September to

recapitalize.

3. Telecommunications

The Nigerian telecoms market is the biggest and

fastest growing in Africa, and the eighth fastest

growing in the world. Liberalization of the

market, a strong independent regulator and

dynamic growth from mobile operators has

brought about steady growth since the start of

the decade. Telecoms has attracted USD18 billion

in investment since the first mobile networks

launched in the country in 2001, with USD12

billion coming from foreign investors and USD6

billion coming from in-country investors. In April

2010, tele-density had reached 56.3%, up from

just 0.73% in 2001. The Nigerian

Communications Commission predicts that tele-

density will reach 90-100% by 2020.

Government Policies and Regulation

The telecoms industry was liberalized in 1999,

following the establishment of the sector’s

independent regulator, the Nigerian

Communications Commission (NCC) in 1992. In

2003, the Nigerian Communications Act reduced

the role of the Ministry of Information and

Communications to policy-making, thus giving

the NCC the power to regulate the industry

without intrusion. In 2006, the NCC introduced

technology-neutral Unified Access Service

Licenses (UASL), so that providers can offer fixed,

mobile and data services using the technology of

their choice.

Nigeria’s telecoms policy was formulated in 2000,

and to bring it into line with developments since

then, the Ministry of Information and

Communications is in the process of redrawing

the policy. The government has identified several

key policy areas to be addressed: these include

the phased adoption of sustainable energy in

telecoms, to counter the high energy costs that

are adding to operating expenditure and being

passed on to subscribers. Other policy directions

include the merger of the NCC with the Nigerian

Broadcasting Commission (NBC), to take into

account the changing nature of modern media,

P a g e | 55


the introduction of number portability and the

reduction of interconnection charges. The

government is also focusing on the need to

deploy infrastructure to rural areas and to

improve broadband capacity across the country.

To this end, the government set up a Rural

Communication Programme to make sure that no

Nigerian is more than a day’s walk away from a

telephone. The Wire Nigeria (WiN) initiative has

made advances in rolling out fiber optic cable

across the country, and the almost-completed

State Accelerated Broadband Initiative (SABI) is

extending wireless broadband access to all 36 of

Nigeria’s state capitals.

Internet Taking Off

Nigeria is getting online with the help of new

technologies and infrastructure

Nigeria’s Internet user base is growing fast:

according to the International

Telecommunication Union, from 10 million

people online at the end of 2007, or 7.2% of the

population, the country had 23.9 million Internet

users at the end of 2009, making up 16.1% of the

population.

Although little data is available on current

broadband subscriber numbers, it is expected

that as new technologies including mobile

broadband gain in popularity and greater

bandwidth becomes available, 100% of Internet

connections will be broadband by 2013.

As the number of people online has grown, the

market has consolidated, so that from 400 ISPs in

2007, the country now has around 150. The

existing providers are introducing new

technologies and new infrastructure, which

should see the price of Internet access drastically

lowered and thus increase the user base

significantly.

Underwater Infrastructure

Until 2009, national fixed-line provider Nitel was

the major gatekeeper for international bandwidth

provision to Nigeria with its SAT-3 undersea

cable, which it holds along with 35 other

providers from around the world. In July 2009,

damage to the cable caused massive disruption to

Internet access across the country, with 70% of

connections affected. But a series of new

submarine cables in the offing will prevent such

incidents in the future, and in introducing

competition and vastly increased broadband

capacity to the sector, the advent of the new

cables should see Internet prices drop by as much

as 90% in the near future.

In September 2009, the Glo-1 cable, owned by

Second National Operator and mobile market

number two, Globacom, made land at Lagos, and

started rolling out services at the end of 2009.

The Main One cable, owned by Nigerian firm

Main Street Technologies, stretches from

Portugal to Nigeria and Ghana and arrived in

Nigeria in June 2010, beginning operations in July

2010. In October 2009, mobile market leader

MTN announced that it was joining with ten other

operators in the West African Cable Systems

(WACS) cable project, connecting South Africa,

Nigeria and the UK; it is set to commence

operations in December 2010. France Telecom’s

African Coast to Europe (ACE) cable will connect

Nigeria to France when it starts operating in

2011.

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Mobile Market Matures

The largest mobile market in Africa is still

growing

Nigeria overtook South Africa in 2008 to become

the biggest mobile market on the African

continent. Mobile phones have transformed the

telecommunications sector in the country since

their introduction in 2001. In that year, the

country had just 0.73% teledensity – and the

number of fixed lines has not changed

significantly since then, with only 1% of the

population having a fixed line by April 2010. But

as fixed lines stayed stagnant, mobile

subscriptions boomed: by the end of April 2010,

there were 77,395,332 active mobile

subscriptions in Nigeria, representing a mobile

penetration rate of 55.3%. By 2014, the country

is expected to have 118 million mobile

subscribers.

The first GSM (Global System for Mobile

communications) licences were issued in 2001, to

M-Tel, part of national fixed-line operator Nitel,

to South African company MTN and to a local

consortium led by Zimbabwe’s Econet Wireless,

since acquired by Zain Group. Globacom became

the country’s fourth mobile operator when it was

awarded a GSM licence together with its fixed-

line Second National Operator licence in 2002. In

2008, UAE operator Etisalat entered the market

as Nigeria’s fifth GSM provider.

While GSM still dominates, CDMA (Code Division

Multiple Access) is playing an increasingly

important role in the mobile market – from just

1% market share at the end of 2007, CDMA

operators had a combined 10% of the mobile

market at the end of April 2010. Nigeria has four

CDMA operators offering mobile services:

Visafone, Multilinks, Starcomms and Zoom.

Nigeria’s telecoms regulator, the Nigerian

Communications Commission (NCC), has

announced that mobile number portability will

be introduced in the second half of 2010, allowing

subscribers to switch between networks without

changing their phone number. The NCC is also

continuing its drive to curb the use of mobiles in

crime by requiring mobile phone users to register

their SIM cards.

Innovation in ICT

Keeping up with the times

Nigeria’s telecoms companies are innovating to

meet the challenges brought about by a fast-

growing industry. New ways of managing

infrastructure and new ways of generating

revenue by adding services look set to keep the

telecoms sector on track for continued future

growth.

Sharing Infrastructure

Fast growth and increasing demand in the

country’s telecom industry have sometimes left

infrastructure over-stretched. To combat this, the

government has awarded licenses for companies

to provide shared infrastructure for operators in

the Internet, mobile and fixed-wireless sectors.

Co-location, whereby independent operators

provide infrastructure like towers, masts and

base stations to multiple operators, has taken off

in Nigeria in 2009, as operators find they can

reduce capital and operating expenditure by

P a g e | 57


outsourcing infrastructure management to

dedicated infrastructure companies. The service

also acts as a solution to the operators’ problems

of declining service quality due to network

congestion and helps the country to slow down

the proliferation of telecoms masts. The

government is encouraging companies to

continue the move towards shared infrastructure

so as to increase the industry’s capacity to meet

demand going forward.

The two largest co-location companies are Helios

Towers Nigeria and IHS, although 17 other

companies have been licensed by the NCC to

provide co-location services. Helios Towers was

given the AfricaCom award for Best Cost

Efficiency in Africa in 2009; it has more than

1’000 sites across Nigeria and in October 2009, it

received investment of US$250 million from the

World Bank to help the company carry out its

plan of having over 2’000 sites nationwide by the

third quarter of 2010. IHS too is engaged in

aggressive roll-out, as it implements plans to

construct 500 new sites by early 2010.

4. Transportation

Getting transport back on track

Nigeria is tackling the problem of transforming

transport infrastructure that does not meet the

needs of a modern economy. Although the sector

is under-developed, significant progress is being

made by the Federal and State Governments in

building and rehabilitating infrastructure, with

the help of funding from international

organizations, private sector input and new

policy initiatives.

Redrawing Policy

Nigeria’s transport infrastructure was

nationalized after the country gained its

independence. Years of mismanagement and

corruption made the nationalization exercise a

failure, and since 2000, when the National

Council on Privatization (NCP) set up the

Transport Sector Implementation Committee, the

government has been looking for ways to

encourage private sector involvement in the

sector.

In 2008, the government set up the Infrastructure

Concession and Regulatory Commission (ICRC) to

identify and promote opportunities for Public

Private Partnerships (PPPs) in infrastructure

between government and private sector

operators. All PPPs in the sector must be

approved by the ICRC in order to be recognized

by the Federal Government. The government is

conducting a comprehensive review of the

transport sector in order to gain reliable data for

transport planning – the last such survey was

undertaken in 1983. The Nigerian Institute for

Transport Technology was commissioned to

carry out the survey in January 2010. The

National Transport Commission Bill, introduced

in 2009, will set up an independent regulator for

the sector; the bill went before a ministerial

committee in June 2010, which means it should

be implemented in the near future.

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Making Progress on Roads

Nigeria has the largest road network in West

Africa, with around 194’200 km of roads. The

Federal Government has responsibility for 17.6%

of the network, 15.7% are state roads and 66.7%

are local and rural roads. Federal roads carry

70% of total freight traffic, and the Federal Road

Management Agency (Ferma) has been carrying

out a programme of upgrading federal roads

since 2004. In May 2010, the government said

that it was planning to reclassify the roads in

order to shift some of the burden of maintenance

off the Federal Government.

Aviation

Air travel is taking off

Nigeria’s air traffic rose considerably in 2009:

12.5 million passengers passed through the

country’s airports, as compared to 11 million in

2008 and 8.4 million in 2007. Even as airline

industries across the world struggled because of

the global economic crisis, Nigeria’s airports

continued to see growth in 2009 – in the final

quarter of the year, passenger traffic at 3.5

million showed a 21% rise on the same period in

2008, when 3 million passengers travelled

through the country’s airports, and in the same

period, cargo movement grew by 52.5%.

Improvements in airport infrastructure and

airline quality, together with help from

government and external partners, should help

the aviation industry sustain growth in the

coming year – which will make it easier for

Nigeria to do business with the world.

The regulatory authority for the air industry is

the Nigeria Civil Aviation Authority (NCAA),

which began operation in 2000 and became an

autonomous body under the Civil Aviation Act

2006. All but one of the country’s 23 airports,

including the four international airports at Lagos,

Kano, Port Harcourt and Abuja, are operated by

the Federal Airports Authority Nigeria (FAAN);

the Akwa Ibom International Airport, which

opened for business in early 2010, is owned by

Akwa Ibom State. Nigeria has eight airlines

operating scheduled flights in the country: Air

Nigeria, Chanchangi Airlines, IRS Airlines, Dana

Air, Aero Contractors, Associated Aviation, Arik

Air and Overland Airways. The country’s

international airports are served by many

international airlines, including Air France,

British Airways, Emirates, Alitalia, Lufthansa,

KLM and Qatar Airways.

Funding for the Sector

In spite of the swift growth of the sector, Nigeria’s

airlines have in some cases over-reached

themselves in borrowing, and the high cost of jet

fuel has added to the woes of some of the smaller

operators. In 2009, three airlines – Bellview,

Afrijet Airlines and Capital Airlines – had to

shutter their operations, and of those airlines

remaining in the skies, few are without significant

debts. In May 2010, the government announced

measures to prevent a financial crisis in the

industry: the Central Bank of Nigeria made

available a USD3.3 billion fund to airlines, so that

they can refinance their loans with the country’s

banks and amortise them over a period of 10-15

years. The fund should stave off any further

airline closures and allow the industry room to

grow.

Investing in Transport

New funding to improve transport

infrastructure

Increasing investment in the transport sector is

key to the Nigerian government’s plans to

overhaul infrastructure and fit the country to

take its place as one of the world’s top 20

economies. The government’s budget for

transport has been steadily increasing over the

last three years: in 2008, transport’s budgetary

allocation was hiked to USD623.9 million, more

than seven times the sum allotted in the previous

year; in the 2009 budget, transport got USD754.6

million; while in the budget for 2010, transport is

to receive USD840.8 million.

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External partners are essential to the

government’s efforts in improving transport

infrastructure. The World Bank has provided

Nigeria with a USD915 million loan to finance

transport projects, along with energy and water

initiatives and HIV/AIDS projects. The loan is to

be spread out over five years, with USD180

million accessible in 2010. The government is

working to encourage the input of private sector

operators in the sector: the Infrastructure

Concession and Regulatory Commission (ICRC)

was set up in 2008 to pursue partnerships with

the private sector in infrastructure. Transport

projects qualify for pioneer status in the

government’s investment framework, so new

industries in the sector are eligible for a tax

holiday of up to seven years, among other

incentives.

Cross-Border Transport Cooperation

Nigeria’s transport infrastructure plays a vital

role in linking the country to its neighbors,

facilitating trade and regional integration. In June

2010, the governments of Nigeria and Cameroon

launched the construction of the Bamendu-Enugu

Multinational Highway. The road will stretch for

443 km, connecting Bamendu in Cameroon with

Enugu in Nigeria; 240 km will be on the Nigerian

side of the border with 203 km in Cameroon. The

project is being funded by the African

Development Bank (AfDB), which is providing

finance of USD161 million, and the World Bank,

which has given USD330 million. The Nigerian

and Cameroonian governments will each give

10% counterpart funding. The contractor for the

highway is Chinese company China Civil

Engineering Construction Corporation (CCECC).

CCECC is the biggest Chinese construction

company operating in Nigeria; it has 56 projects

in progress across Nigeria, including road and

railway construction, and it has invested more

than USD10 billion in its projects in the country.

Firsts in Transport

Fresh approaches for upgrading transport

systems

Nigeria’s transport infrastructure remains under-

developed, but with the help of international

partners and private sector operators, the

country is seeing new initiatives succeed in

making an impact on the transport sector and on

the economy in general.

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Improving Urban Transport in Lagos

Lagos, now the world’s sixth largest city, is the

fastest growing metropolis in the world; its

population is around 20 million at the moment,

and it is projected to grow to 25 million within

the next 20 years. But until recently, the city had

no organised mass transit system. In 2002, the

World Bank approved USD150 million to draw up

a Lagos Urban Transport Project, which identified

public transport as the first major priority for the

city’s development. The Lagos State Government

set up the Lagos Metropolitan Transport

Authority (LAMATA) to head up efforts to

transform the transport system, and following a

feasibility study funded by the World Bank, the

city began work on the Bus Rapid Transit System

(BRT).

The BRT is the first initiative of its kind in Sub-

Saharan Africa. Drawing on best practices from

Colombia and Brazil, the project consists of a

high-quality bus transport system with dedicated

bus lanes, and is operated as a public private

partnership, with the state financing

infrastructure and the private sector paying for

buses, depots and maintenance. BRT began

operating in 2007, and by 2010, the project was

carrying 100% more passengers than expected,

making up around 3% of motorized trips in Lagos

and serving around 200’000 commuters.

The Lagos Urban Transport Project is still in

progress: the next step for the city is setting up a

Light Rail Transit System. Construction has

already begun on the first light rail route and is

set to be completed in 2012. The Lagos Urban

Transport Project continues to be supported by

the World Bank as well as the Federal

Government and Lagos State Government, and

other stakeholders are also getting involved. In

March 2010, the UK committed to funding the

Lagos Urban Transport Project with £30 million

over the next five years. The UK’s investment will

go to improving capacity in the bus system and

helping set up the Light Rail Transit System.

France announced in 2009 that it would invest

USD100 million in the Lagos Urban Transport

Project by the end of 2010.

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5. Manufacturing

Working to rebuild Nigeria’s manufacturing

industry

Nigeria’s manufacturing industry has suffered

from neglect, since the country’s economy has

depended on the petroleum sector since the

1970s. As the government tries to diversify the

economy, it is working to reinvigorate the

manufacturing sector so as to increase its

contribution to Nigeria’s prosperity.

Lagos and its surroundings are home to about

60% of Nigeria’s industrial base. Other key

industrial centres are Kano, Ibadan and Kaduna.

Nigeria’s most important manufacturing

industries include beverages, cement, cigarettes,

food processing, textiles and detergents.

Restarting the Manufacturing Sector:

Manufacturing contributed of 4.2% GDP in 2009,

up from 3.6% in 2008. The sector’s contribution

to GDP has changed little over the course of the

decade. Even as industries like cement and

beverages attract investment from home and

abroad, other industries are closing up shop;

between 2000 and 2010, more than 850

manufacturing companies either shut down or

temporarily halted production. Capacity

utilization in manufacturing is around 53%.

Imports of manufactured goods dwarf sales of

homegrown products – manufactured goods have

constituted the biggest category of imports since

the 1980s. But the government is working to

revitalize the ailing sector: in May 2010, the

Nigerian government announced a USD1.3 billion

fund to help banks extend credit to the

manufacturing sector, following the decline in

available financing after the onset of the global

economic crisis.

The biggest problem facing manufacturers over

the past decade has been inadequate

infrastructure in general and lack of power

supply in particular. The country set a target of

generating 6’000 MW of electricity by the end of

2009, but estimated national demand is 25’000

MW. Manufacturers have mainly installed their

own generators to compensate for spotty supply

from the state – the manufacturing industry as a

whole generates around 72% of its own energy

needs. But operating these generators greatly

increases the cost of manufacturing goods, and

the cost increase is passed on to the consumer,

making it difficult for Nigerian goods to compete

with cheaper imports. The government is

embarking on a major drive to improve power

generation with the express aim of improving

conditions for industry: in March 2010 it unveiled

plans to invest USD3.3 billion in power projects

throughout the country.

Nigerian Sugar

Domestic production is rising and refineries

have begun exporting sugar

The Nigerian sugar industry has been

reinvigorated by the privatization of national-

owned sugar resources. While domestic

production remains insufficient to match

consumption needs, it is rising as production

from the privatized companies begins to come

on-stream – in 2009-10, the country will produce

60’000 tonnes of raw sugar, up from 50’000 in

the previous year. Sugar refining is flourishing, as

new market entrants increase competition in the

industry. The country’s sugar refining capacity is

2.1 million tonnes per year, more than adequate

to meet total demand of 1.4 million tonnes.

Government Policy

The National Sugar Development Council (NSDC)

was set up in 1993, in an effort to raise domestic

production, which at that time was filling just

50’000 tonnes of the country’s then total demand

of 700’000 tonnes. The NSDC’s first task was to

arrange privatization of the country’s

nationalized sugar companies: Savannah Sugar

Company Limited at Numan, Adamawa State;

Nigeria Sugar Company at Bacita, Kwara State;

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Lafiaji Sugar Company in Kwara State; and Sunti

Sugar Company in Niger State. The Savannah

Sugar Company was taken over by Dangote in

2002, Nigeria Sugar Company was acquired by

Josepdam & Sons in 2006, Lafiaji Sugar Company

was bought by BUA Group in 2008 and Sunti

Sugar Company was obtained by Flour Mills

Nigeria in 2009.

With privatization complete, the NSDC has turned

its attention to supporting the development of

the industry. The NSDC’s out-grower programme

runs in all 14 sugar-producing locations in the

country; under the scheme, the NSDC provides

local farmers with irrigation infrastructure,

fertilizer and other agricultural inputs and helps

them to create marketing channels. The NSDC

also assists in the set up of small sugar plants by

communities or individuals, to supplement the

production of the bigger estates without the

capital outlays that more extensive operations

would require.

Beer Industry

In the second largest beer market in Africa,

competition is brewing

Even as Western beer consumption slows down

due to the global downturn; Nigeria’s beer

industry continues to thrive. The country has the

second largest beer market in Africa, after South

Africa. And with the largest population in Africa, a

growing middle class and a large number of

drinking-age consumers, the brewing

multinationals are jockeying for position in a

market that shows plenty of room for expansion.

The beer market in Nigeria grew in value by

21.8% in 2009, making it worth USD2.7 billion.

And since Nigerians consume just 10 litres of

beer per head of population, the market has

plenty of room to continue expanding: analysts

project growth in value sales of 16.8% in 2010,

and average annual growth of 23.45% between

2011 and 2014. Drinking alcohol is a social

activity in Nigeria, so 80% of the country’s

alcohol sales are on-trade. Beer is the most

popular alcoholic drink in the country, making up

about 96% of all alcohol sales.

The import of beer bottles or cans for trade is

prohibited in order to support domestic industry.

Companies engaged in brewing hops are eligible

for ‘pioneer’ status, entitling them to a tax holiday

of up to seven years.

The excise duty on alcohol was reduced in 2002

from 40% to 20% per liter. Despite the fact that

Islamic Sharia law, which bans the sale and

consumption of alcohol, is in force in some of

Nigeria’s northern states, consumers continue to

find means of buying beer. Alcohol in the

northern states can be sold in military facilities,

which are Federal territory and thus not subject

to state laws.

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Nigeria’s Trade Relations

Doing business with the world

Nigeria is committed to becoming one of the

world’s top 20 economies by 2020 and expanding

trade with other countries is an important part of

its strategy for growth. Exports, like the economy

in general, are dominated by petroleum, while

imports include manufactured goods, chemicals,

machinery and transport and food and livestock.

Official statistics have the value of the country’s

exports falling by 22.3% in 2009, from USD63.5

billion in 2008 to USD49.3 billion at the end of

2009 – this drop can be explained by a 28.2%

drop in the value of crude oil exports. Main

exports were crude oil and gas, although non-oil

exports are making headway: non-oil exports

rose in value by 40.7% in 2009. Import values

were up, growing 53% from USD21.9 billion in

2008 to USD33.5 billion in 2009, mostly due to an

increase in imports of manufactured goods.

The country’s main export destinations are the

US, Spain, France and Brazil. Major import

sources are China, France, the US and the UK.

Nigeria is a member of the World Trade

Organisation, the International Monetary Fund

and the World Bank, as well as the African

Development Bank, OPEC and the African Union.

Regional Cooperation

Nigeria is a member of ECOWAS, the Economic

Community of West African States, along with

Benin, Burkina Faso, Cape Verde, Côte d'Ivoire,

The Gambia, Ghana, Guinea, Guinea Bissau,

Liberia, Mali, Niger, Senegal, Sierra Leone and

Togo. ECOWAS plans to institute a common

market between all of its member states.

Nigeria adopted ECOWAS’s Common External

Tariff (CET) in 2005, which brought the average

tariff down from around 29% to 12%. Important

trading partners for Nigeria in Africa are Côte

d’Ivoire, South Africa and Ghana.

In cooperation with ECOWAS, in November 2009

Nigeria set up an Enlarged National Focal Point

(ENFP) committee to bring coherence to the

country’s trade policies and advise Nigeria’s

delegation to World Trade Organisation. The

committee will be made up of government

officials as well as private sector stakeholders,

researchers and academics.

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6. Solid Minerals

Lets dig deeper for Nigeria's new wealth

The solid minerals sector in Nigeria has long been

treated as the poor relation of the oil and gas

sector. Compared to the level of investment and

development in oil and gas extraction – which has

grown exponentially since Nigeria joined the

Organisation of Petroleum Exporting Companies

(OPEC) in 1971 – mining activity has suffered

stagnation, and even decline. While petrol dollars

dominate the economy, the National Bureau of

Statistics lists solid minerals as contributing less

than 1% of GDP, despite significant coal and iron

ore reserves, and known deposits of gold,

uranium, tin and tantalum.

But the vast potential of Nigeria's mineral wealth

has not always been so ignored. Before the oil

boom of the 1970s the economy was largely

sustained by the exploitation of solid minerals.

Coal and tin were among the natural resources

mined on a massive scale, with the former being

used to generate electricity, power the railway

network and meet the demands of regional and

international markets. Lead and zinc were a

significant source of export revenue, and Nigeria

was the world's largest exporter of columbite.

Stagnation in the solid minerals sector cannot

simply be attributed to the meteoric rise of oil:

poor management by state-owned enterprises –

compounded by corruption and an incoherent

exploitation of resources – has also played its

part. International blue-chip mining companies

have long since given the sector a wide berth due

to its reputation for inefficiency, but this could be

about to change. The federal government has

acknowledged its potential as an alternative to

the petroleum industry for foreign exchange

earnings, and has set about revitalizing its

fortunes.

The rationale for Nigeria's renewed interest in

exploiting its natural resources is simple. Mineral

resources are the foundation upon which an

industrialized economy is built, and

industrialisation is essential if the country is to

reduce over-dependence on the oil industry – an

industry which, despite the revenue it generates,

provides employment for just 6% of the Nigerian

labour force. The government recognizes that

over-dependence on oil also leaves the economy

vulnerable to international oil politics and

fluctuations in oil prices.

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7. Agriculture

Reinvigorating agriculture is a priority of the

Nigerian government

Agriculture contributed 41.84% to Nigeria’s GDP

in 2009, and the sector employs around 70% of

the workforce. The main agricultural goods

produced are yams, cassava, peanuts, millet,

sorghum, rice, maize, okra, cocoa, palm oil,

rubber, cattle, fish and timber. Nigeria is a net

importer of agricultural goods – in 2009, imports

in the sector added up to more than USD3 billion,

while agricultural exports accounted for about

USD1.4 billion. Major agricultural imports are

wheat, rice and sugar. Most agricultural imports

come from the US and the EU. The country’s main

agricultural exports are cocoa beans, rubber,

sesame seeds and cocoa butter. Key agricultural

export destinations are the UK, the US, Canada,

France and Germany.

Most of those who work in agriculture are small-

scale subsistence farmers: the country has

around 14 million small farmers, and the average

size of farms in the south of the country is 1

hectare, while in the north, the average farm is

around 3 hectares. Around 33% of the country’s

land is used as arable land, though about 80% of

the land is potentially cultivable; there is no

shortage of land suitable for cultivation overall,

but more densely settled areas in the south

eastern states have suffered from too much

demand for arable land, giving rise to internal

migration.

Much of Nigeria’s agriculture is carried out

according to traditional methods, with

mechanization relatively rare. Government

efforts to encourage modern methods have had

limited success, since farmers frequently find it

difficult to adapt to new technologies and have

limited capital for updating machinery.

The National Centre for Agriculture

Mechanization (NCAM), a government para-

statal, was set up in 1990 to develop and promote

mechanized farming in the country, through

manufacturing tools, importing machinery and

training farmers. The centre is the only one of its

kind in West Africa, but has been held back in the

past by underfunding.

Other factors that have held back the agricultural

sector in the past include lack of investment,

inadequate infrastructure and poor transport

networks linking crops to markets. The

government is working on regenerating the

sector by addressing these and other problems.

Cocoa Growing

Nigeria’s biggest agricultural export is full of

beans

Nigeria is the fourth-largest producer of cocoa

beans in the world, behind Côte d’Ivoire, Ghana

and Indonesia. After petroleum, cocoa is the

country’s most important export – before

independence, cocoa generated 90% of Nigeria’s

foreign exchange earnings. Eclipsed these days by

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oil as the country’s major export, Nigeria still

produces 300’000-350’000 tonnes of cocoa a

year, most destined for consumption abroad – the

country exports about 96% of its cocoa crop.

Cocoa exports for October-March 2009/10 were

up 31% on the previous year, helped by good

weather conditions and improved quality in stock

in the growing regions.

Fourteen of Nigeria’s 36 states grow cocoa: Abia,

Adamawa, Akwa Ibom, Cross River, Delta, Edo,

Ekiti, Kogi, Kwara, Ogun, Ondo, Osun, Oyo and

Taraba.

Stakeholders and Programmes for Growth

Despite cocoa’s importance in the years before

independence, the sector was allowed to decline

after the oil boom of the 1970s and suffered for

decades from under-investment. The cocoa

industry was liberalized in 1986, when the

government abolished the Nigerian Cocoa Board,

a government bureau that controlled the

marketing of cocoa, and deregulated the industry.

The decline continued, however, so to

rehabilitate the industry, in 1999 the government

set up the National Cocoa Development

Committee (NCDC). The NCDC promotes cocoa

production and trade in cooperation with the

various growers’ agencies operating in the

industry, like the Cocoa Association of Nigeria

(CAN), the Cocoa Farmers Association of Nigeria

(CFAN) and the Cocoa Growers Association of

Nigeria (COGAN).

The Cocoa Research Institute of Nigeria (CRIN) is

another major stakeholder in the sector:

established in 1964 as a government para-statal,

the Institute conducts research on cocoa,

distributes seedlings to farmers and trains

growers in modern agricultural practices as well

as in business development skills.

Cassava – a Multi-Purpose Plant

Nigeria is making use of its cassava crop to

diversify its economy

Cassava is Africa’s most important staple food

crop, after maize, and Africa produces half of the

world’s supply. The plant is used to make a

starchy food called gari, and it is also a source for

biofuels as well as animal feed. Nigeria is the

world’s largest producer of cassava, producing

around 45 million tonnes in 2009, almost 19% of

total world production. Despite its preeminent

position in cassava growing, Nigeria has yet to

make much impact on the global cassava market,

since most of its crop is consumed domestically.

But with new initiatives under way aimed at

increasing and improving cassava production and

developing new ways to use the crop, Nigeria

hopes to utilize cassava as part of its strategy to

diversify its economy away from petroleum.

Initiatives to Boost Production

The major stakeholders in the cassava sector

include the Nigeria Cassava Growers Association,

an advocacy group drawn from those producing

cassava, and the International Institute of

Tropical Agriculture (IITA), a non-profit

agricultural research group headquartered in

Ibadan. Working together, these two are enabling

growers to boost their crops with the help of the

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US Aid for International Development fund.

Under the USAID programme, announced in

2009, 5’000 cassava growers are being furnished

with high yielding varieties of cassava to plant

and assisted to plant one hectare of the new crop.

The aim is to upgrade the cassava stock among

small growers, so as to allow farmers to raise

their return from the current 12-15 tonnes of

cassava per hectare to 40-50 tonnes per hectare.

The IITA is partnering with the Nigerian Farm

and Infrastructure Foundation to carry out

Nigeria’s part in a cassava improvement project

funded by the UN’s Common Fund for

Commodities (CFC). The Cassava Value Chains

project is under way in Nigeria, Benin and Sierre

Leone, and CFC has made USD1.6 million

available for

distributing high quality cassava seedlings to

growers and constructing new international

standard cassava processing facilities.

Nigeria’s Food Security

Ensuring adequate food supply for all

Nigerians

Despite its considerable arable land resources,

Nigeria is a net importer of food. The country

spends more than USD3 billion annually on

bringing in food, even though at one point,

agriculture was the nation’s greatest source of

foreign exchange. Most agriculture is carried out

by small farmers, and processing and storage

facilities are limited, restricting the country’s

ability to withstand a food emergency. But

matters have improved over the course of the

decade, and the government and other

stakeholders are working on programmes to

guarantee the nation’s food security for the

coming years.

Government Programmes for Food Security

Former President Yar’Adua made Food Security

one of the items in his Seven Point Agenda for

government, and the current administration also

considers ensuring food security to be a high

priority. In September 2008, the Federal Ministry

of Agriculture and Water Resources launched a

new National Food Security Programme to bring

about sustainable access to affordable and high-

quality food for all Nigerians. The government set

aside USD1.3 billion for the programme, with the

short-term objective of raising agricultural

productivity by shifting from traditional

subsistence farming to commercialised

agriculture. In the medium to long term, the

government hopes to expand capacity in the

sector, improve storage and processing facilities

and create a more efficient regional

infrastructure, with the intent of in the future

obtaining more than half of Nigeria’s foreign

exchange from agriculture.

The National Food Reserve Agency (NRFA), a

para-statal of the Ministry of Agriculture, was

established in 2007 to oversee Nigeria’s food

security strategy. The agency has regional offices

in each of the country’s six geo-political zones. It

aims to store 5% of national food output to

ensure supply in the event of a food crisis. It

oversees the National Programme for Food

Security, promotes the involvement of the private

sector in agriculture and facilitates farmers’

access to agricultural machinery and feedstock.

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8. Construction

The awakening of a sleeping giant

Nigeria has the potential to be one of the biggest

construction markets on the planet.While the

world is still struggling to emerge from the global

economic collapse, Nigeria’s construction

industry is growing fast and is likely to grow

astronomically over the next decade, according to

forecasts made in a June 2010 report by Global

Construction Perspectives and Oxford Economics.

Estimates suggest that current growth in the

construction industry is greater than that of

India. Indeed, the report found that “Nigeria’s

population of approximately 154 million is

urbanizing at one of the fastest rates in the world,

but construction is now only 3.2 % of the Gross

Domestic Product. From 2009 to 2020, only

Nigeria and India will enjoy higher growth rates

than China in their construction output.”

Hopes for the Future

This outlook is excellent news for the country as a

whole. Every ambition that the Nigerian

government has — such as creating much-needed

housing, improving public services, developing its

tourist sector, improving transport links, creating

new jobs and eradicating poverty — can be

linked to the construction sector.

Foreign investment is desperately needed to

build roads, ports, bridges and airports. The

country’s archaic railway network, barely altered

since colonial days, is also in great need of an

upgrade.

Roads, in particular, are a problem. Only the

capital Abuja and, to a lesser extent, the coastal

metropolis of Lagos, has a reasonable road

network. Nationwide, road fatalities are one of

the most common causes of death. In June 2010,

the World Bank announced that it would invest

USD300 million for the overall development of

Nigerian roads. However, far greater investment

is needed to bring the country up to scratch.

Hotels and numerous tourist-related facilities will

need to be built if Nigeria is to achieve its target

of becoming one of Africa’s most desirable tourist

destinations. Many existing tourist attractions are

in need of major work.

It is hoped that Nigeria, which has been to a

certain degree protected from the global

economic crisis by rising oil prices, can attract

overseas companies seeking new markets in

developing countries.

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9. Tourism

Nigeria is an unearthed gem just waiting to be

discovered

After all, there are few places in the world where

one can find 850km of uninterrupted coastline,

just teeming with sandy unspoilt beaches.

Going inland, travelers are confronted with a

veritable feast of landscapes. Forests, mountains,

savannahs and desert — all can be found within

Nigeria’s borders.

Quite simply, there is something for everybody:

national parks, UNESCO world heritage sites,

ancient villages, incredible waterfalls, and even

game reserves featuring rare, enchanting wildlife.

All this is in a country that enjoys year-round

sunshine.

Yet, despite all these natural gifts, the country’s

greatest asset must be its people. 150 million in

number, Nigeria’s population is amazingly

diverse. Muslims, Christians and a host of other

religious groups can be found, while an incredible

250 languages are spoken nationwide. There are

also hundreds of ethnic groups, with the Hausa in

the north, the Yoruba in the south-west and the

Igbo in the south-east comprising the dominant

three groups.

Nigerians are warm and friendly to outsiders.

Most are not used to seeing tourists and travelers

who have explored beyond the bustling city of

Lagos have been touched by the level of

hospitality that they have received.

Until relatively recently, the country’s history of

corruption and poverty had dissuaded many

travelers from discovering Nigeria’s many

treasures. However, with the introduction of

democracy in 1999 and the country’s remarkable

achievement of becoming the first African nation

to pay off its foreign debt, there has never been a

better time for the country to expand its tourist

sector or for tourists to visit this largely

unexplored land.

Ripe for Development

Nigeria’s economy has long been dominated by

crude oil since it was discovered in the 1950s.

However, recent global instability has

encouraged the Nigerian government to diversify

and it has recently begun to explore its huge

potential for tourism.

Spearheading a Budding Market

With Nigeria’s overall economy improving and

increased transparency attracting a large number

of foreign investors, the Nigerian hospitality

market is gaining momentum. Yet there are only

few locally operated hotels that aspire to the

same international standards as Eko Hotel &

Suites. While the resort has advanced the

hospitality services training of their staff and its

infrastructure for almost three decades, their

efforts remain widely unmatched throughout the

country. As a result, Eko Hotel & Suites finds

itself in direct competition with international

hotel chains, which are pushing into the budding

market. Brand names include Sheraton and Le

Meridien, as well as Hilton, Accor, Sofitel and

Novotel hotels. These chains bring with them

international management practices and

seasoned professionals with experience and

expertise. Nevertheless, Eko Hotel & Suites is

confident enough to welcome this kind of

competition as it will bring about an overall rise

in technical standard and quality for the Nigerian

hospitality market.

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Nigeria: Special Investment Destinations

New investment impulses in Kano State

Kano has been bastion of commercial activities

in the Sub-Saharan Africa for over five centuries

ago. It prospered as the southernmost nodal

point of the trans-Saharan trade during the pre-

colonial times. At the wake of colonialism

retained its vigour for commerce and industry

after it was connected to the trans-Atlantic trade.

For both trade of the old and new routes Kano is

the premier point exercising commercial

influences over its adjacent locations. For an

unbroken period of time Kano has piled accolades

of excellent business climate, globally reputed

business moguls as well as globally desirable

infrastructure for business proliferation.

The influence of the state administration has

always been at the core of prosperity of Kano’s

outstanding commercial fame. From the emirate

periods, through colonial and postcolonial era

governments have played vital and sensitive roles

in that direction. However, the new millennium is

greeted by new revolutions, opportunities and

challenges for the global, regional and local

businesses. On that basis, the administration of

His Excellency, Mallam (Dr.) Ibrahim Shekarau

(the Sardauna of Kano) has adequately

responded to the millennium-bound

opportunities and challenges through

programmes, projects and policies that focus on

synchronising Kano with the new world of

businesses. The testimony of the effort the

Shekarau Administration towards attracting

foreign direct investment is given by the World

Bank/DFID Business Climate Survey 2010 which

ranks Kano as the leading state in Nigeria in

terms of reforms in the sector of business

development in Nigeria. The Shekarau seems to

have international and national confidence for its

efforts of restoring global reputation that Kano

has enjoyed for centuries. The State has hosted

several international dignitaries including

President Horst Kohler of the Federal Republic of

Germany, President Vaclav Klaus of Czech

Republic, His Royal Highness Charles, the Prince

of Wales and host of others.

One of the newest states in Nigeria, Bayelsa

State has much to offer to investors, from its rich

natural resources to its magnificent

environmental beauty. With a thriving petroleum

sector, an extensive fishing industry, a growing

private sector and a nascent tourism industry, the

state is building on its natural advantages to take

its place among the economic success stories of

Nigeria.

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New investment impulses in Bayelsa State

Created in 1996 after the split of Rivers State,

Bayelsa has a population of around 2 million

people. Its capital is at Yenagoa, the traditional

centre of the Ijaw people, Nigeria’s fourth largest

ethnic group after Hausa, Yoruba and Igbo; while

Ijaw dialects are spoken by most Bayelsan’

people, English is the state’s official language. The

state has an area of around 21’000 square km,

and about three-quarters of its total area lies

under water.

The mangrove forests and swamps in the south of

the country are home to rich vegetation and

spectacular scenery, while the thick forest in the

north has arable lands used for agriculture.

Situated in the heart of the Niger Delta, Bayelsa is

the source of 30-40% of Nigeria’s oil and gas

production – in fact, the first oil struck in

quantities sufficient for commercial production in

Nigeria was found in 1956 in an area that was to

become part of Bayelsa State.

State Government Strategies for Growth

Timipre Sylva has been governor of Bayelsa State

since 2007. After coming to office, the governor’s

administration undertook a review of Bayelsa’s

development policies, resulting in the drawing up

of the Bayelsa State Sustainable Development

Strategy (BYSSDS) as a development framework

to coordinate projects in the state. The strategy

has three goals for the state: economic

prosperity, social advancement and

environmental sustainability. Its major focus is

alleviating poverty to achieve the Millennium

Development Goals by 2015, in line with the

Federal Government’s plan to make Nigeria one

of the world’s top 20 economies by 2020. BYSSDS

makes provision for improving the health, skills

and education of Bayelsan residents and for

diversifying the state’s economy away from the

oil industry, which currently provides most of

state revenues. Based on the BYSSDS and with the

support of the World Bank, the state government

has outlined Medium Term Sector Strategies and

Medium Term Expenditure Frameworks for each

sector of economic activity covering 2010-2012.

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Corporate Nigeria

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