#1INVESTMENT NIGERIAN IN NIPC COMMISSION PROMOTION NIGERIAN INVESTMENT PROMOTION COMMISSION BUSINESS AND INVESTMENT ENVIRONMENT IN NIGERIA UNIDO-ITPO AND NIPC ONLINE DELEGATE PROGRAMME 2020 Mohammed Baba Deputy Director, Investor Relations Virtual Meeting | September 2020#2Nigeria in the global context NIGERIA INVESTMENT COMMISSION PROMOT#3How the world will look in 2050 Most populous countries INVESTMENT NIGERIAN IN China China India India India China [3 USA USA Nigeria 410.6m Russia Indonesia USA Japan Brazil Indonesia Germany Pakistan Pakistan Indonesia 190.9m Brazil Britain Italy France Bangladesh 1950 Nigeria Bangladesh Russia Mexico Japan Ethiopia 2017 Brazil Bangladesh Congo DR Ethiopia Mexico Egypt 2050 Forecast Source: United Nations World Population Prospects: the 2017 Revision, medium variants 3 COMMISSION PROMO#4What investors tell us NIGERIA INVESTMENT COMMISSION PROMOT#5Africa's perceived barriers to investment... Business environment is most important barrier... Unstable political environment Source: EY's 2015 Africa Attractiveness Survey 55% Lack of highly skilled labor 13% Inconsistency Corruption 26% " and lack of 10% transparency in Weak security Poor basic infrastructure 22% 14% A regulatory policy Unattractive tax policies and financial incentives 5 76 7% $: INVESTMENT NIGERIAN IN ... incentives are least important barrier COMMISSION PROMO#6Nigeria's business environment improvement efforts NIGERIA INVESTMENT COMMISSION PROMOT#7Improved ease of doing business ranking: Nigeria (131/190) Nigeria's ease of doing business ranking improved by 15 steps and 4.01 points .. positive national doing ... business score ... INVESTMENT NIGERIAN IN 2020 DB Ranking COMMISSION Rank Difference Starting a business 105/190 +5 Dealing with construction permits 55/190 +94 Getting electricity 169/190 +2 DB Year Registering property 183/190 +1 Rank Difference *DTF Difference Getting credit 2020 131/190 +15 56.9 +4.01 15/190 -3 Protecting minority investors 28/190 +10 2019 146/190 -1 52.89 +1.37 Paying taxes 159/190 -2 2018 145/190 +24 51.52 +6.89 Trading across borders 179/190 +3 2017 169/190 +1 44.63 -0.06 Enforcing contracts 73/190 +20 2016 170/189 0 44.69 +1.14 Resolving insolvency 148/190 +1 Source: World Bank, Doing Business 2020 7 * The distance to frontier (DTF) score measures the distance of each economy to the "frontier", which represents the best performance observed on each of the indicators across all economies PROMO#8Subnational reforms equally important Kaduna Kano Katsina Jigawa Niger Bauchi Borno Yobe positive subnational doing business scores Bayelsa FCT Abuja Gombe Benue Ogun Zamfara Kogi Taraba Kebbi Enugu Ekiti Ondo Sokoto Akwa Ibom Nasarawa Edo Plateau Osun Delta Lagos Kwara 45 55 Abia Anambra Adamawa Oyo Imo Ebonyi Rivers 50 Nigeria average (4 indicators) 56.93 Cross River 55 DTF score 2014 DTF score 2018 SSA average (4 indicators) 58.40 60 65 70 70 Average DTF score for the four benchmarked indicators (0-100) Source: World Bank, Doing Business in Nigeria 2018 8 Sokoto Katsina Zamfara Kebbi Kano Jigawa Yobe Borno Bauchi Kaduna Gombe Niger Plateau FCT Kwara Nassarawa Oyo Taraba Osun Ekiti Kogi Benue Ondo Ogun Edo Lagos Enugu Ebonyi Cross Abia Delta Imo River Bayels Rivers Akwa Ibom Adamawa INVESTMENT NIGERIAN IN PROMO COMMISSION In the past 4 years, 29 Nigerian states implemented 43 reforms across the four areas benchmarked. Kaduna, Enugu, Abia, Lagos and Anambra showed the largest advance toward the global good practice frontier#9Why Nigeria NIGERIA INVESTMENT COMMISSION PROMOT#10Despite the challenges, there are very many reasons to invest in Nigeria... N Large growing population Sophisticated financial Improving business Strategic location Generous investor markets climate protections Abundant natural Large tech-savvy population resources Young, energetic, entrepreneurial population BAAAH Generous investment incentives Resilient, hard-working "can-do" spirit An essential component of every Africa strategy Optimistic mobile population M Fast growth projections Abundant economic opportunities 3rd most populous country by 2050 Private sector-led economy Two decades of political stability Huge unfilled demand 10 Growing middle class jó Large population of consumers Strategic time zone GMT +1 14th Largest economy by 2050 products Home to many large local and international brands Language: English Favourable weather INVESTMENT NIGERIAN IN COMMISSION PROMO#11PROMO Ideal gateway economy for leveraging AfCFTA 5' Dakar 3'05' Tunis ▪4 International airports and major seaports in Lagos, Calabar and Bonny island ▪3,798 km of railway tracks and 168,000 km road network ■Land borders with Benin, Cameroon, Chad and Niger and a natural hub for the continent 5'45" Cairo 5'20" Addis Abba 5'40" Johannesburg INVESTMENT NIGERIAN IN COMMISSION Nigeria is more ready than most African economies 1. Large domestic market makes Nigeria the ideal gateway economy 2. Expanded market for Nigerian goods and services, creating jobs and economic growth 3. Nigeria's manufacturing value addition is more. than 7x the average of the top 20 economies in Africa 4. Effective trade remedies will allow action against injurious practices by foreign countries and companies 5. Many Nigerian companies, particularly in the services sector, have long developed the capacity to serve the rest of Africa 6. Complements Nigeria's national development agenda and can catalyse economic diversification 11#12PROMO Selected Nigerian companies and their networks in Africa Company Sector UBA Services (Banking) 20 Dangote Group Manufacturing (Industrial, 12 Food & Beverages) African operations INVESTMENT NIGERIAN IN COMMISSION Benin, Burkina Faso, Cameroun, Chad, Cote d'Ivoire, Congo Brazzaville, Gabon, Ghana, Guinea Conakry, Kenya, Liberia, Mali, Mozambique, Nigeria, RDC, Senegal, Sierra Leone, Tanzania, Uganda, Zambia Cameroun, Cote D'Ivoire, Congo, Ethiopia, Ghana, Liberia, Nigeria, Senegal, Sierra Leone, South Africa, Tanzania, Zambia, GTBank Services (Banking) 10 Cote D'Ivoire, Gambia, Ghana, Kenya, Liberia, Nigeria, Rwanda, Sierra Leone, Tanzania, Uganda Globacom Telecommunications 5 Benin, Cote d'Ivoire, Ghana, Nigeria, The Gambia Interswitch Tech Ecosystem (Digital payments and Commerce) 3 Kenya, Nigeria, Uganda Paga FinTech 2 Ethiopia, Nigeria 12#13Potential winners and losers from COVID-19 Real Estate Education Entertainment & Tourism Trade Manufacturing Construction Potential Losers XXXX Transportation & Storage Oil & Gas Source: NBS, Nigerian Gross Domestic Product Report (Q2 2020) Mining & Quarrying Potential Winners Losers 13 Food & Beverages II$II Banking & Finance INVESTMENT NIGERIAN IN Winners ICT Chemicals & Pharmaceuticals Agriculture Human Health & Social Services PROMO COMMISSION#14Investment promotion efforts NIGERIA INVESTMENT COMMISSION PROMOT#15¡Guide Nigeria INVESTMENT NIGERIAN IN COMMISSION NOW AVAILABLE ONLINE IN OVER 100 LANGUAGES ¡Guide Nigeria An online guide to doing business in Nigeria An easy-to-use online investment guide that provides investors with up-to-date and pertinent information on the processes, procedures and basic costs of doing business in Nigeria It provides information on starting business, labour, production factors, land, taxes, investor rights, growth sectors and opportunities The information will enable investors to make better informed decisions on Nigeria as a preferred investment destination ■ Available at: www.theiguides.org/nigeria www.nipc.gov.ng NIGERIAN INVESTMENT PROMOTION COMMISSION ECA UNECA - United Nations Economic Commission for Africa UNCTAD United Nations Conference on Trade and Development UNITED NATIONS UNCTAD 15 PROMO#16Selection of investment incentives in Nigeria INVESTMENT NIGERIAN IN Pioneer status incentive • For companies in industries recognised as "pioneer" • Allows a company income tax holiday for 3-5 years •Dividends also exempt from tax Deduction for research and development • For companies undertaking R&D activities for commercialization • Allows 20% investment tax credit on qualifying expenditures Rural investment allowance . For companies >20km from government facilities who incur capex for providing electricity, water, tarred roads, etc for the purpose of a trade or business • Allowance rates: •100%: no facilities, 50%: no electricity, 30%: no water, 15%: no tarred road Investment tax relief Similar to rural investment allowance, but only available for 3 years max for companies who have not enjoyed pioneer status Export expansion grant ⚫Post-shipment incentive for non-oil exports • Qualifying exports must fully repatriate proceeds within 300 days Export processing zones incentives • 100% capital allowance • Rent-free land during construction • Full holiday from federal, state and local government taxes Source: Compendium of Investment Incentives in Nigeria 16 COMMISSION PROMO#17WIP: OSIC Lab Currently in pilot phase Transparent platform for speedy resolution of investment related issues 3 weeks Investor raises issue Members include... انخ OSIC Lab meeting called INVESTMENT NIGERIAN IN COMMISSION LTJ MDAs hear investor's issues together Comprehensive all-of-government solution agreed Drive practical policy reforms Investor advised of resolution Increase confidence in business environment COMMISSION FIRS ATORY C AL AGENCY FOR FOOD AND OVNATIONAL NAFDAC NISTRATION & CONTROV ORPORATE AFFAIRS COMMISSION NERC Son Protect existing investments/jobs and encourage new investments/jobs HERC 17 Encourage new and existing investors Encourage continued investment/protect existing jobs PROMO#18What NIPC can do for investors ○ Assist investors to navigate challenges in investing in Nigeria ○ Assist with connecting prospective foreign investors with domestic partners ○ Facilitate discussions with government agencies and policy makers ○ Assist investors with quality information to help them implement their investment plans in Nigeria ○ Facilitate investor input into the policy making process O OSIC Lab provides a platform for resolving challenges faced by investors ○ Work behind the scenes; easier for policy makers and regulators to change positions if persuaded privately, not confronted in public ○ This allows us to achieve the desired objective without compromising their independence O However, we cannot compel any government agency to do what we advice ○ The arguments we make need to be carefully thought through and driven by facts and data 18 INVESTMENT NIGERIAN IN COMMISSION PROMO#19Nigeria-Japan relations NIGERIA INVESTMENT COMMISSION PROMOT#20PROMO Japan: Nigeria investment interests, 2014-2018 Investments by capex ($'m) & jobs Capex Jobs Created 31 218 1,073 INVESTMENT NIGERIAN IN COMMISSION Top investment interests by sector $261 m 1,143 LL 10% 3% 4% 9% 56% 212 18% 120 59 81 10 18 2014 2015 2016 2017 2018 Investment destinations $261 m Top investment interests Automotive OEM Business services Non-automotive transport OEM Software & IT services Consumer products Other 9% 9% 9% 28% Source: fDi Markets Projects Capex ($'m) Employees 1 CFAO Group 1 73.9 1,007 Honda Automobile Western 2 1 73.9 1,007 Lagos State Africa 3 SI-UK 2 46.4 66 Ogun State 4 Yamaha Motor 1 26.2 200 45% Rivers State 5 NEC XON 1 17.8 212 6 Federal Capital Territory Miniso 1 7.2 136 7 Canon 1 5.7 34 Not Specified 8 Trend Micro 1 5.2 18 9 Sony Music Entertainment 1 4.7 25 200#21Why Japan? #2 global investor #7 investor in Africa #5 investor in Nigeria Top 10 investor in services Nigeria's top 20 import partner Nigeria's top 20 export partner Top 10 investor in solid minerals Source: NIPC Intelligence 221 IMPORTS #5 investor in oil refining #5 investor in real estate INVESTMENT NIGERIAN IN COMMISSION PROMO#22Success stories Panasonic H Aj, AJINOMOTO SUNTORY YAMAHA Λ KANSAI PLASCON Marubeni SENRI ➜ PARTEC JTi ་བག ITOCHU HITACHI TAICHI HOLDINGS LIMITED SONY INDUSTRY AFRICA TAIYO INC Canon MOL sojitz Mitsui O.S.K.Lines W WooGWay MRM Olam Midland Rolling Mills Ltd. NIPRO HN 西澤株式会社 NISHIZAWA LIMITED MEDIA FUSE NEC Powerturbines ASB dentsu AEGIS network 22 22 YOKOGAWA INVESTMENT NIGERIAN IN COMMISSION PROMO#23About NIPC NIGERIA INVESTMENT COMMISSION PROMOT#24PROMO NIPC's principal functions INVESTMENT NIGERIAN IN COMMISSION NIPC was established by the NIPC Act* in 1995 to encourage, promote and co-ordinate investments in Nigeria Project Attractive Investment Image • Promote Nigeria as an attractive investment destination • Provide information on investment opportunities and capital sources Investment Promotion • Promote investments in Nigeria, by Nigerians and non-Nigerians • Co-ordinate all investment promotion activities in Nigeria • Provide support services to investors and register enterprises in Nigeria Investment Facilitation • Match-make investors with specific projects and advise on partners for JVs Policy Advocacy • Provide information on investment incentives and approve Pioneer Status Incentive applications • Initiate and support measures that enhance the investment climate • Evaluate the impact of investments and incentives in Nigeria and make appropriate recommendations • Advise Government on policy matters to promote Nigeria's economic development *Nigerian Investment Promotion Commission Act, Chapter N117, Laws of the Federation of Nigeria 2004 24#25Investor Obligation and Protections in the NIPC Act Registration Obligation • Enterprises in which foreigners can participate are required to register with NIPC before commencing business Ownership • Nigerians and foreigners can invest in any sector, except for those on the negative list •No restriction on foreign percentage ownership Guarantees • Government will not nationalize or expropriate any enterprise • Right of access to courts and fair and adequate compensation if acquisition is in national interest/for public purpose •No restriction on repatriation by foreigners of investment returns or sale proceeds through an authorized dealer Dispute Resolution •Amicable resolution by mutual discussion or arbitration of investor/government disputes • Provisions of any Bilateral Treaty with the investor's country will apply • Right of recourse to international arbitration under ICSID Rules ICSID = International Centre for Settlement of Investment Disputes 25 INVESTMENT NIGERIAN IN COMMISSION PROMO#26For further details, please contact us NIGERIAN BERIAN INVE NIPC NVESTMENT COMMISSION PROMOTION NIGERIAN INVESTMENT PROMOTION COMMISSION Subscribe to the NIPC Newsletter http://eepurl.com/dkvoU1 Investment information www.theiguides.org/nigeria Mohammed Baba Deputy Director, Investor Relations Plot 1181 Aguiyi Ironsi Street Maitama District Abuja [email protected] [email protected] www.nipc.gov.ng