Nigeria

Map of Nigeria Federal Republic of Nigeria President: Umaru Yar’Adua (2007) Current government officials Land area: 351,649 sq mi (910,771 sq km); total area: 356,669 sq mi (923,768 sq km) Population (2006 est.): 131,859,731 (growth rate: 2.4%); birth rate: 40.4/1000; infant mortality rate: 97.1/1000; life expectancy: 47.1; density per sq mi: 375 Capital (2003 est.): Abuja, 590,400 (metro. area), 165,700 (city proper) Largest cities: Lagos (2003 est.), 11,135,000 (metro. area), 5,686,000 (city proper); Kano, 3,329,900; Ibadan, 3,139,500; Kaduna, 1,510,300 Monetary unit: Naira Languages: English (official), Hausa, Yoruba, Ibo, Fulani, and more than 200 others Ethnicity/race: More than 250 ethnic groups, including Hausa and Fulani 29%, Yoruba 21%, Ibo 18%, Ijaw 10%, Kanuri 4%, Ibibio 3.5%, Tiv 2.5% Religions: Islam 50%, Christian 40%, indigenous beliefs 10% Literacy rate: 68% (2003 est.) Economic summary: GDP/PPP (2005 est.): $132.9 billion; per capita $1,000. Real growth rate: 5.6%. Inflation: 15.6%. Unemployment: 2.9%. Arable land: 33%. Agriculture: cocoa, peanuts, palm oil, corn, rice, sorghum, millet, cassava (tapioca), yams, rubber; cattle, sheep, goats, pigs; timber; fish. Labor force: 57.21 million; agriculture 70%, industry 10%, services 20% (1999 est.). Industries: crude oil, coal, tin, columbite; palm oil, peanuts, cotton, rubber, wood; hides and skins, textiles, cement and other construction materials, food products, footwear, chemicals, fertilizer, printing, ceramics, steel, small commercial ship construction and repair. Natural resources: natural gas, petroleum, tin, columbite, iron ore, coal, limestone, lead, zinc, arable land. Exports: $52.16 billion f.o.b. (2005 est.): petroleum and petroleum products 95%, cocoa, rubber. Imports: $25.95 billion f.o.b. (2005 est.): machinery, chemicals, transport equipment, manufactured goods, food and live animals. Major trading partners: U.S., Brazil, Spain, China, UK, Netherlands, France, Germany (2004). Member of Commonwealth of Nations Communications: Telephones: main lines in use: 500,000 (2000); mobile cellular: 200,000 (2001). Radio broadcast stations: AM 83, FM 36, shortwave 11 (2001). Radios: 23.5 million (1997). Television broadcast stations: 3 (the government controls 2 broadcasting stations and 15 repeater stations) (2002). Televisions: 6.9 million (1997). Internet Service Providers (ISPs): 11 (2000). Internet users: 100,000 (2000). Transportation: Railways: total: 3,557 km (2002). Highways: total: 194,394 km; paved: 60,068 km (including 1,194 km of expressways); unpaved: 134,326 km (1999 est.). Waterways: 8,575 km consisting of the Niger and Benue rivers and smaller rivers and creeks. Ports and harbors: Calabar, Lagos, Onne, Port Harcourt, Sapele, Warri. Airports: 70 (2002). International disputes: ICJ ruled in 2002 on the Cameroon-Nigeria land and maritime boundary by awarding the potentially petroleum-rich Bakassi Peninsula and offshore region to Cameroon; Nigeria rejected the cession of the peninsula but the parties formed a Joint Border Commission to peaceably resolve the dispute and commence with demarcation in other less-contested sections of the boundary; several villages along the Okpara River are in dispute with Benin; Lake Chad Commission continues to urge signatories Cameroon, Chad, Niger, and Nigeria to ratify delimitation treaty over lake region, which remains the site of armed clashes among local populations and militias; Nigeria agreed to ratify the treaty and relinquish sovereignty of disputed lands to Cameroon by December 2003. Major sources and definitions

Geography

Nigeria, one-third larger than Texas and the most populous country in Africa, is situated on the Gulf of Guinea in West Africa. Its neighbors are Benin, Niger, Cameroon, and Chad. The lower course of the Niger River flows south through the western part of the country into the Gulf of Guinea. Swamps and mangrove forests border the southern coast; inland are hardwood forests.

Government

Multiparty government transitioning from military to civilian rule.

History

The first inhabitants of what is now Nigeria were thought to have been the Nok people (500 B.C.–c. A.D. 200). The Kanuri, Hausa, and Fulani peoples subsequently migrated there. Islam was introduced in the 13th century, and the empire of Kanem controlled the area from the end of the 11th century to the 14th.

The Fulani empire ruled the region from the beginning of the 19th century until the British annexed Lagos in 1851 and seized control of the rest of the region by 1886. It formally became the Colony and Protectorate of Nigeria in 1914. During World War I, native troops of the West African frontier force joined with French forces to defeat the German garrison in the Cameroons.

On Oct. 1, 1960, Nigeria gained independence, becoming a member of the Commonwealth of Nations and joining the United Nations. Organized as a loose federation of self-governing states, the independent nation faced the overwhelming task of unifying a country with 250 ethnic and linguistic groups.

Rioting broke out in 1966, and military leaders, primarily of Ibo ethnicity, seized control. In July, a second military coup put Col. Yakubu Gowon in power, a choice unacceptable to the Ibos. Also in that year, the Muslim Hausas in the north massacred the predominantly Christian Ibos in the east, many of whom had been driven from the north. Thousands of Ibos took refuge in the eastern region, which declared its independence as the Republic of Biafra on May 30, 1967. Civil war broke out. In Jan. 1970, after 31 months of civil war, Biafra surrendered to the federal government.

Gowon's nine-year rule was ended in 1975 by a bloodless coup that made Army Brig. Muritala Rufai Mohammed the new chief of state. The return of civilian leadership was established with the election of Alhaji Shehu Shagari as president in 1979. An oil boom in the 1970s buoyed the economy and by the 1980s Nigeria was considered an exemplar of African democracy and economic well-being.

The military again seized power in 1984, only to be followed by another military coup the following year. Maj. Gen. Ibrahim Babangida announced that the country would be returned to civilian rule, but after the presidential election of June 12, 1993, he voided the results. Nevertheless, Babangida resigned as president in August. In November the military, headed by defense minister Sani Abacha, seized power again.

Corruption and notorious governmental inefficiency as well as a harshly repressive military regime characterized Abacha's reign over this oil-rich country, turning it into an international pariah. A UN fact-finding mission in 1996 reported that Nigeria's “problems of human rights are terrible and the political problems are terrifying.” During the 1970s, Nigeria had the 33rd highest per-capita income in the world, but by 1997 it had dropped to the 13th poorest. The hanging of writer Ken Saro-Wiwa in 1995 because he protested against the government was condemned around the world.

As leader of the multination peacekeeping force ECOMOG, Nigeria established itself as West Africa's superpower, intervening militarily in the civil wars of Liberia and Sierra Leone. But Nigeria's costly war efforts were unpopular with its own people, who felt Nigeria's limited economic resources were being unnecessarily drained.

Abacha died of a heart attack in 1998 and was succeeded by another military ruler, Gen. Abdulsalam Abubakar, who pledged to step aside for an elected leader by May 1999. The suspicious death of opposition leader Mashood Abiola, who had been imprisoned by the military ever since he legally won the 1993 presidential election, was a crushing blow to democratic proponents. In Feb. 1999, free presidential elections led to an overwhelming victory for Gen. Olusegun Obasanjo, a former member of the military elite who was imprisoned for three years for criticizing the military rule. Obasanjo's commitment to democracy, his anticorruption drives, and his desire to recover billions allegedly stolen by the family and cronies of Abacha initially gained him high praise from the populace as well as the international community. But within two years, the hope of reform seemed doomed as economic mismanagement and rampant corruption persisted. Obasanjo's priorities in 2001 were symbolized by his plans to build a $330–million national soccer stadium, an extravagance that exceeded the combined budget for both health and education. In April 2003, he was reelected.

Nigeria's stability has been repeatedly threatened by fighting between fundamentalist Muslims and Christians over the spread of Islamic law (sharia) across the heavily Muslim north. One-third of Nigeria's 36 states is ruled by sharia law. More than 10,000 people have died in religious clashes since military rule ended in 1999.

In 2003, after religious and political leaders in the Kano region banned polio immunization—contending that it sterilized girls and spread HIV—an outbreak of polio spread through Nigeria, entering neighboring countries the following year. The Kano region lifted its ten-month ban against vaccination in July 2004. On Aug. 24, there were 602 polio cases worldwide, 79% of which were in Nigeria.

Since 2004, an insurgency has broken out in the Niger delta, Nigeria's oil-producing region. The desperately impoverished local residents of the delta have seen little benefit from Nigeria's vast oil riches, and rebel groups are fighting for a more equal distribution of the wealth as well as greater regional autonomy. Violence by rebel groups has disrupted oil production and reduced output by about 20%. Nigeria is one of the world's largest oil producers and supplies the U.S. with one-fifth of its oil.

In Aug. 2006 Nigeria handed over the oil-rich Bakassi peninsula to Cameroon, in compliance with a 2002 World Court ruling.

The Niger River and its tributaries (including the Benue, Kaduna, and Kebbi rivers) drain most of the country. Nigeria has a 500-mile (800-km) coastline, for the most part made up of sandy beaches, behind which lies a belt of mangrove swamps and lagoons that averages 10 mi (16 km) in width but increases to c.60 mi (100 km) wide in the great Niger delta in the east. North of the coastal lowlands is a broad hilly region, with rain forest in the south and savanna in the north. Behind the hills is the great plateau of Nigeria (average elevation 2,000 ft/610 m), a region of plains covered largely with savanna but merging into scrubland in the north. Greater altitudes are attained on the Bauchi and Jos plateaus in the center and in the Adamawa Massif (which continues into Cameroon) in the east, where Nigeria's highest point (c.6,700 ft/2,040 m) is located.

In addition to Abuja and Lagos, other major cities include Aba, Abeokuta, Ado, Benin, Enugu, Ibadan, Ife, Ilesha, Ilorin, Iwo, Kaduna, Kano, Maiduguri, Mushin, Ogbomosho, Onitsha, Oshogbo, Port Harcourt, and Zaria.

Nigeria is easily the most populous nation in Africa and one of the fastest growing on earth. The inhabitants are divided into about 250 ethnic groups. The largest of these groups are the Hausa and Fulani in the north, the Yoruba in the southwest, and the Igbo in the southeast. Other peoples include the Kanuri, Nupe, and Tiv of the north, the Edo of the south, and the Ibibio-Efik and Ijaw of the southeast. English is the official language, and each ethnic group speaks its own language. About half of the population, living mostly in the north, are Muslim; another 40%, living almost exclusively in the south, are Christian; the rest follow traditional beliefs.

The economy of Nigeria historically was based on agriculture, and more than half of the workforce is still engaged in farming (largely of a subsistence type). The chief crops are sorghum, millet, soybeans, peanuts, cotton, corn, yams, rice, palm products, cacao, and rubber. In addition, poultry, goats, sheep, and cattle are raised. Crop production has fallen in recent years and Nigeria must now import food.

Petroleum is the leading mineral produced in Nigeria; it is found in the Niger delta, in the bights of Benin and Biafra, and on the Bakassi peninsula along the Cameroon-Nigeria border, a disputed area where the two countries have been involved in clashes. (In 2002 the International Court of Justice awarded the peninsula to Cameroon, but the decision has yet to be implemented.) Petroleum production on an appreciable scale began in the late 1950s, and by the early 1970s it was by far the leading earner of foreign exchange. The growing oil industry attracted many to urban centers, to the detriment of the agricultural sector. In the 1980s a decline in world oil prices prompted the government to bolster the agricultural sector. Nonetheless, both refinery capacity and agriculture have not kept pace with population growth, forcing the nation to import refined petroleum products and food. Other minerals extracted include tin, limestone, columbite, coal, low-grade iron ore, and gold.

Industry in Nigeria includes the processing of agricultural goods and the manufacture of textiles, footware, soap, tobacco products, paper, cement, fertilizer, chemicals, and steel. Fishing and forestry are also important. In addition, traditional woven goods, pottery, metal objects, and carved wood and ivory are produced. Nigeria's road and rail systems are constructed basically along north-south lines; the country's chief seaports are Lagos, Warri, Port Harcourt, and Calabar.

Except when oil prices are low, Nigeria generally earns more from exports than it spends on imports. Other important exports include cocoa, rubber, and palm products. The main imports are machinery, chemicals and refined petroleum products, motor vehicles, manufactured consumer goods, and food. The leading trade partners are Great Britain, the United States, Japan, the Netherlands, and France.

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OPPORTUNITIES IN AGRICULTURE: The agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural produce. Although the agricultural sector remains a dominant employer of labor, serious investment is needed across the board to enhance production and increase the contribution of the sector to GDP. Investment is required in the following priority activities: (a) Crop production to achieve food security and to provide industrial raw materials. Potentials exist for the following crops: Cereals: Maize, rice, sorghum, corn, millet, and wheat. Root crops: Cassava, yam, ginger, potato, and cocoyam. Legumes: Soya beans, groundnuts, and cowpeas. Fruits: Mango, banana, oranges, guava, papaw, and pineapple. Vegetables: Cabbage, green pepper, carrots, lettuce, spice, onions, melons. Tree crops: Oil palm, cocoa, rubber, coconut, kola nut, coffee, she nuts, beniseed, cotton, cashew nut, sugar cane. Others: Commercial growing of flowers and ornamentals and experimental orchards for more temperate fruits-apples, grapevines and pears have been successfully established in the high plateau regions. (b) Food processing and preservation involving industries that will use agricultural produce as raw materials. (c) Livestock and Fisheries production which possess great potentials for development. Grazing lands are abundant, facilities for animal feed production are plentiful, and the in-land rivers, lakes and coastal creeks are sufficient to augment ocean fishery resources. (d) Agricultural inputs supplies and machinery, water resources development especially for flood control infrastructure and irrigation. (e) Commodity trading and transportation. (f) Development and fabrication of appropriate small-scale mechanized technologies for on-farm processing and secondary processing of agricultural produce. (g) Exploitation of timber and wood processing activities. Wide ranges of wood resources abound. OPPORTUNITIES IN THE OIL AND GAS SECTOR Foreign and domestic investors are being encouraged through improved fiscal incentives in the Nigeria oil and gas sector. In the Upstream and Downstream sectors, the following are some of the areas where there are pressing needs for investors. (A) UPSTREAM ACTIVITIES (i) Petroleum Exploration and Exploitation. (ii) Search for development of local substitute for such items as Medium pressure valve, pumps, shallow drilling equipment, Drilling mud, bits fittings, drilling cements etc. (iii) Manufacturing of consumable materials in exploration such as explosives, detonators, steel castings, magnetic tapes etc. (iv) Other areas in the services sector of the upstream are: 1. Construction and Installation 2. Maintenance 3. Pipelining 4. Well Services and 5. Transportation Support Services. (B) DOWNSTREAM ACTIVITIES: (i) Domestic Production and marketing of Liquefied Petroleum Gas (LPG) (ii) Manufacturing of LPG cylinders, valves and regulators, installation of filing plants, Retail distribution and development of simple, flexible and much less expensive gas burner to encourage the use of gas instead of wood and other fuels. (iii) Establishment of processing plants and industries for: - The production of refined mineral oil, petroleum jelly and grease. - The manufacture of bituminous based water/damp-proof building materials such as roofing sheets, floor tiles, rubber products, tarpaulin. Building of asphalt storage, packaging and blending plants to handle the product for export. (iv) Establishment of chemical industries such as distillation units for the production of naphtha and other special boiling point solvents used in plant and other food processing industries. (v) Establishment of industries for processing Linear Alkyl Benzene, Carbon Black and Polypropylene. (vi) Development of Phase II (Phase III to join later) of Nigeria’s Petrochemical Programmed. (vii) Participation in all phases of the Nigeria Gas Industry development programmed from exploration, gathering, production and processing to transmission. (viii) Establishment of small scale industries to produce chemicals and Solvents, for example Chlorinated methane, Formaldehyde, Acetylene, etc., from natural gas. (ix) Refining: One condition for purchasing Nigerian Crude Oil is the ownership of an efficient refinery. The shelter which the domestic petroleum products market enjoys, almost completely seals the prospects and viability of privately financed refinery for locally consumed petroleum products. However, opportunities exist for the construction of a refinery in bonded premises with adequate export facilities for dedication to the export market. Companies with the technological know-how can undertake turn-around maintenance of refineries. Refineries consume a lot of chemicals and utilize a broad range of spare parts. There is tremendous scope for small scale joint venture manufacturing concerns with foreign technical partners. Such ventures can start warehousing arrangements that will ensure continuity of supply at competitive prices. Other investment opportunities contingent upon refining and Ancillary activities are the manufacture of special products such as: - Industrial and food grade solvents - Insecticides - Cosmetics - Mineral Oil, petroleum jelly grease - Bituminous-based water/damp-proof building materials such as floor tiles, rubber products, tarpaulin, etc., and - Asphalt storage, packaging and blending plants to handle products for export and local use. Export of refined products surplus also exists as an opportunity in refining. (x) Products Marketing: Petroleum Product Marketing would seem sealed with hardly any opportunity except by way of establishing an independent marketing outfit or aspiring to establish dealership with the marketers. While indeed those opportunities remain viable, far more challenging opportunities may be explored in the areas of product transportation, by road and coastal tankers. Associated with products distribution and marketing is a chain of manufacturing and maintenance business such as lubricating oil reprocessing, LPG bottles and accessories, oil cans reconditioning, etc. The nations pipeline and depot network consists of 3,001km of pipeline of varying sizes as well as sixteen (16) storage depots. These pipelines and networks traverse the length and breath of the country. The system therefore must be maintained in a healthy state for effective and efficient distribution of products. OPPORTUNITIES FOR INVESTMENT IN THE SOLID MINERALS SECTOR Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors’ participation in this sector. PROFILE OF SOLID MINERALS DEPOSITS IN NIGERIA TALC An estimated reserve of over 100 million tones of talc has been obtained in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States. There are only two medium size talc processing plants currently operating in Nigeria and both are located in Niger State. The color of the Nigerian talc varies from white through milky-white to gray. The talc industry represents one of the most versatile sectors of the industrial minerals of the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only local demands but also that of the international markets as well. IRON ORE There are over 3 billion tones of iron ore found in kogi, Enugu, Niger, Zamfara and Kaduna States. Iron is currently being mined at Itakpe (Kogi State), which is more or less at the center of the region of crystalline iron deposits. The large deposit of oolitic iron ores of Kogi and Enugu States are yet to be fully explored. Itakpe iron ore is being beneficiated to 67% Fe. To feed Aladja and Ajaokuta Steel complexes. Besides there are three in-land rolling mills at Oshogbo, Jos and Katsina in addition to some privately owned rolling mills in Lagos and Kano. GOLD There are proven reserves of both alluvial and primary deposits of gold with proven reserves in the shiest belt covering the western half of Nigeria. At present exploitation of alluvial deposits is being carried out mostly by artisan miners in a few places in the country. A number of primary deposits, which are sufficiently big for large scale mechanized mining, have been identified in the northwest and southwest parts of the county. Private investors are invited to stake concessions on these primary deposits. It is interesting to note that the primary deposits are of relatively high grade and at shallow depth. Production costs will easily be as low as about $50 per ounce. BITUMEN The occurrence of Bitumen deposits in Nigeria is indicated at about 42 billion tones almost as twice the amount of existing reserves of crude petroleum. When fully developed, the industry will no doubt meet local requirements for road construction and also become a foreign exchange earner for the country. ROCK SALT The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hypochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals by various companies including tanneries, food beverages, paper and pulp, bottling and other industries including the oil companies. There are salt springs at Awe (Plateau State), Abakaliki (Enugu State) and Uburu (Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated, and further investigations are now being carried out by government to ascertain the quantum of reserves. GYPSUM Gypsum is an important imput for the production of cement. It is used for the production of Plaster of Paris (P.O.P) and classroom chalk, etc. A strategy for large-scale mining of gypsum used in the cement industries is urgently required to sustain existing plants and meet future expansion. Current cement production is put at 8 million tones per annum while the national requirement is 9.6 million tones. About one billion tones of gypsum deposits are spread over many states in Nigeria. LEAD/ZINC An estimated 10 million tons of lead/zinc veins are spread over eight States in Nigeria. Joint venture partners are encouraged to develop and exploit the various lead/zinc deposits all over the country. BENTONITE AND BARYTE These are the main constituents of the mud used in the drilling of all types of oil wells. The Nigerian baryte had specific gravity of about 4.3. Over 7.5 million tons of baryte have been identified in Taraba and Bauchi States. Large bentonite reserves of 700 million tonnes are available in many states of the Federation ready for massive development and exploitation. COAL Nigerian Coal is one the most bituminous in the world owing to its low sulpur and ash content and therefore the most enviroment friendly. There are nearly 3.00 billion tonnes of indicated reserves in 17 identified coalfields and over 600 million tonnes of proven reserves. GEMSTONES Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aguamarine, Emerald, Tourmaline, Topaz, Garnet, Amethyst, Zircon and Flourspar which are among the world’s best. Good prospects exists in this area for viable investments. KAOLIN An estimated reserve of 3 billion tonnes of good kaolinitic clays has been identified. TANTALITE Large deposits of Tantalite are known to occur in Nasarawa, Gombe and Kogi tates as well as the Federal Capital Territory. The deposits ar both alluvial and primary in the numerous pegmatite bodies that infest these ares. Grades of well over 50% Ta2O5 are found. Private investors are invited to stake concessions for the development and exploitation of tantalite in these areas. Pelletisation of Coal for Domestic Use Given the large deposits of brown coal in the tertiary sediments east and west of River Niger; Nigeria can cash in on foreign investors’ technology to produce coal pellets for industrial use, coal briquettes for domestic use; that is, to replace firewood. Incentives and Strategies for Investment Investment Incentives: - 3-5 years Tax Holiday. - Deferred royalty payments. - Posible capitalisation of expenditure on exploration and surveys. - Extension of infrastructure such as roads and electricity to mining sites, and provision of 100% foreign ownership of mining concerns. HOW TO OBTAIN A MINING LEASE IN NIGERIA There are two options available to a company or an individual to enter into mining industry in Nigeria. Through the acquisition of an existing mining property from the original owner. Approval must be obtained from the Ministry of Solid Minerals Development for such a purchase. By obtaining an application, either a Prospecting Right (PR), an Exclusive Prospecting Licence (EPL), or a Special Exclusive Prospecting Licence (SEPL), the application should state financial and technical capability qualifying the applicant for entry into the mining sector.     PERMIT REQUIREMENTS DURATION Entry permit into the mining sector -Statement of financial capability -Statement of technical capability -Proof of statutory existence of company Life Prospecting Right/Licence -Certificate of entry into mining -Prospecting Licence 1 Year renewals Alluvial-Max. Of 2 Bassalt-Max. Of 4 Lode-Max. Of 5 Exclusive prospecting Renewals exceeding 20.72) -Same as above Duration of 1- 5 Right/Licence (for areas up Years Depending on Reserves Mining Lease (gives right to mine specified land area of 80 hectares) -Possession of a Prospecting Right, Exclusive Prospecting Licence or Special Exclucive Prospecting Licence. -Submission of a plan of the prospecting done, a schedule of the mineral value found and a statement of ore reserves. -Submission of an enviromental impact assessment and production plan. Not exceeding 21 years Renewal depending on remaining reserves Special mining lease for an area larger than 80 hectares - Same as above. Metallic minerals not More than 21 years. More than 21 years. not exceeding 70 years. Renewals at minister’s descretion, for not more than 21 years. Entry into the mining Industry - Statement of financial capability - Statement of technical competence - Proof of statutory existence of company. - Evidence of tax clearance - Payment of prescribed fee Life Prospecting Right (P.R.) - Certificate of entry into the mining industry. - Payment of prescribed fee 1 year (Renewable annually) Exclusive Prospecting (E.P.L.) (for areas up to, but not exceeding 20.72km2) - Certificate of entry into the mining Industry - Extant Prospecting Right (P.R.) - Payment of prescribed fee 1 year renewable for: Alluvial Deposits- maximum of 2 renewals: Basslt:- Max. Of 4 renewals Max. Of 5 renewals Special Exclusive Prospecting Licence (S.E.P.L.) (For areas greater than 20. 72km2 & of difficult terrain Mining Lease (M.L.) - Certificate of entry into Mining Industry - Extant Prospecting Right (P.R.) - Payment of prescribed fee - Certificate of entry into mining Industry - Extant Prospecting Right (P.R.) - EPL or SEPL - Prospecting plant of the area showing Ore reserve estimates. - Payment of prescribed fee. 1-5 Years. Up to 21 years, renewable depending on remaining on reserve Special Mining Lease (SML) (for areas greater than that of ML. With difficult terrain and large capital out-lay). - Certificate of entry into mining Industry. - Extant prospecting Right (PR) - EPL and SEPL - Prospecting plan of the area showing on reserve estimates - Payment of prescribed fee. Up to 21 years renewable depending on the remaining on reserve. INVESTMENT OPPORTUNITIES IN THE POWER, STEEL AND ALUMINIUM SECTORS. POWER SECTOR: Government has concluded plans towards revitalization of installations of the National Electric Power Authority, NEPA to enable it meet its total installed capacity of 6000MW. Sufficient funds are being injected for the rehabilitation of ageing plants and equipment. In order to allow full private sector patricipation in power generation, transmission and distribution, government has accepted to deregulate the secror by the year 2000. This will allow local and foreign investors to build, own and operate and/or transfer independent electricity. All laws that inhibit private sector participation in the power sector are being reveiwed with a view to amending them and encouraging investment. This step will complement the de-consolidation of the industry as far as the state-owend NEPA is concerned. The hitherto largely over-centralised operations of this agency will be decentralised. Guidelines and framework for Independent Power Products (IPP’s) are now being put together folowing the interests and applications already put forward by independent producers from all around the world. Investment Opportunities exist for hydro-power generation in Mambilla Fall, Adamawa State and Agbokin fall in Cross-River State. NEPA will readily negotiate a Memorandum of Understanding (MOU) with any foreign energy company to cover the following areas: (i) Development of energy resources and infrastructures, (ii) Management of energy infrastructure; (iii) Commercialization of energy (iv) Training; and (v) Exchange of information and experience. It is expected that further discussions will centre on: (i) Construction and management of power stations by private companies; (ii) Production of Steam and gas turbine spare parts; (iii) Repairs and testing of power transformers; (iv) Development of wind turbines for generation of electricity; (v) Manufacture of distribution transformers and line hardware; (vi) Technology transfer through joint erection of new power plants; (vii) Training of NEPA staff in computer based maintenance system etc. NEPA and the foreign company will then set up a joint committee for the purpose of achieving these objectives. THE STEEL SECTOR: Plans by the Ministry to revitalise the steel sector are underway. As a first step to reviving the sector, technical audit and cost estimate for completion of Ajaokuta Steel Project are being contempleted. The Ministry is also planning to rehabilitate the Delta Steel Company and three in-land Steel Rolling Mills in the country with a view to making them function effectively. Staff training and development is also being given attention because local skilled manpower availability can motivate an investor into the industry. These are aimed at putting the sector in a state of readiness for foreign investment. In consonance with the nation’s technical and economic co-operation policies for this sector, some areas of joint co-operation have been identified, and investors will be encouraged to invest in the sector. Discussions will centre on joint venture commercial operation of the completed units of the Ajaokuta Steel Project. Investors will be encoureged in the following areas: (i) Iron Making Plant with capacity to produce 1.35 metric tonnes of billets; (ii) Billet Mill with capacity to produce 795,000 tonnes of billets per annum; (iii) Light Section Mill with capacity to produce 400,000 tonnes of bars per annum; (iv) Medium Section Mill with capacity to produce 130,000 tonnes of wire coils per annum; and (v) Engineering Workshops comprising: - The Power Equipment Repair Shop - Forge Fabrication and Rubberising Shop with capacity to produce 4,200 tonnes of fabricated structures. THE ALUMINIUM SECTOR: The Aluminium Smelter Company of Nigeria, ALSCON, is a joint venture project in which Nigeria owns 70% of the equity shares, while the remaining 30% is shared between AG Ferrostaal of Germany with 20% shares and Reynolds Inc. Of US with 10% shares. The present administration is making efforts to ensure that the aluminium smelter plant is properly funded. It has given invitation to private investors to invest in the company and /or take part of Nigeria’s 70% shares. The plant is one of the best and biggest in the world with the most modern technology. A number of countries have signed or are negotiating trade and economic cooperation agreements with Nigeria. Since the essence of these bilateral agreements is to foster unity: boost economic growth and technological co-operation, foreign investors should take advantage of existing bilateral ties and harken to the call to invest in the ALSCON project as in other projects in the power and steel sectors. COMMUNICATIONS SECTOR The deregulation of the telecommunications sector in 1992 through Decree 75 was to allow for private sector participation in the sector and expand the nation’s communication facilities. The Nigeria Communications Commission (NCC) was established consequently to regulate the performance of the sector. The liberalisation thrust was further strengthened by the Nigeria Communications Commission (Amendment) Decree No. 30 of 1998 which deleted those provisions in the first decree that inhibited competition in the sector thus enhancing the expected role of private sector enterprises. The functions of Nigerian Communications Commission include: * Regulating the privatised sector of the telecommunications industry. * Facilitating entry into the telecommunications market by private enterpreneurs. * Creating a regulatory enviroment for the supply of telecommunications equipment and facilities. * Issuing of telecommunications licences. * Promoting fair competition and efficient market conduct among all players in the telecommunications industry. * Arbitrating disputes between participants in the telecommunications industry and protecting consumers against unfair practices. INVESTMENT OPPORTUNITIES IN TELECOMMUNICATIONS INDUSTRY IN NIGERIA 1. LOCAL MANUFACTURE OF EQUIPMENT The telecommunications industry in Nigeria is far from being developed. There is a dearth infrastructural facilities and this has placed a constraint on the provision of services to existing and potential customers. There is therefore an urgent need to expand the infrastructures in this sector if it is to effectively play its role in the economic, social, political, cultural and in fact overall development of the Nigerian society and properly integrate it into the international community. Such desired expansion can not be achieved under the present dispensation where the needed equipment are usually imported with attendant problems of foreign exchange procurement, freighting cost, long delivery period etc. There is therefore no other realistic option than the local manufacture of these equipment and spares. SWITCHING AND TRANSMISSION EQUIPMENT Local manufacture of switching and transmission equipment is requird since no single company exists in Nigeria or even neighbouring countries for this purpose. Hence any company that goes into the venture will have its market beyond the frontiers of Nigeria. CABLES In Nigeria, there are three companies engaged in the production of telecommunication cables using imported copper and other local resources like poly vinyl chloride materials for insulation. There is no company that is cuurently producing fibre optic cables in the country. The copper cable producing companies are producing only low pair capacity of 50, 100, 200 pairs. There is need for a plant that will produce high pair capacity cables that will enhance massive provision of lines to the teaming population. 2. FACILITIES AND SERVICES PROVISION With Nigeria’s population that is over 130 million people, an installed telephone capacity of about 700,000 lines and a telephone penetration of 0.65 lines to 100 persons, it is abundantly clear that telephone service to the populace is grossly inadequate. Even with the Government introduction of competition in the sector and the subsequent licensing of Private Telecommunications Operatos. (PTOs), the market has not experienced any noticeable chang. Although some of the PTO’s have commenced operation for over two years, they have not been able to collectively introduce up to 100,000 telephone lines into the country’s telecommunictions network. Hence, the sector is still a virgin land for investors wishing to provide and operate private network links employing cable, radio communications, data services, INTERNET Business and Satellite communication, Payphone services and Cellular radio phone services. 3. JOINT VENTURE FUNDING OF INVESTMENTS Apart from the absence of local manufacture of equipment and inadequate services, another major problem that has seriously affected the growth of the industry is insufficient financial resources. The industry is a capital intensive one and the banks in the country appear no to have strong financial muscle to handle massive investment in the sector. The industry has not also attracted individuals’ cooperative initiative probably as a result of the low level of income per capita in the economy. Hence joint venture partnership between foreign investors and Nigerians will be a veritable source of investment capital for the sector. At present there is no joint venture enterprise in the sector. The Nigeria-Turkey joint venture for the local manufacture of telecomm equipment initiated over five years ago was not concluded as a result of the political climate during this period. It is hoped that with the return of democracy in Nigeria, negotiation will once more commence on this issue. INVESTMENT PROCEDURES WITHIN THE NIGERIA EXPORT PROCESSING ZONES (EPZ) i) Any company, person or group of persons wishing to carry out approved activity within a zone shell apply to the Nigerian Export Processing Zones Authority NEPZA using the prescribed forms and shall submit such documents and information in support of the applications. The forms shall specify the application fees and such other details as the Authority may stipulate from time to time. A feasibility study in respect of the investment project, which the applicant wishes to undertake in the zone, shall be attached as an annex to the application and shall contain the following among others: - Project description; - Market survey; - Funding proposals; - Financial projections; - Environmental impact statement and control measures. ii) Application to undertake approved activity in the zone duly received, shall be considered by the Authority within 30 days of receipt and the Authority shall notify the applicant in writing og its decisions to grant the said approval or otherwise. The approval shall be subject to such terms and conditions as may be imposed by the Authority. iii) If the application is approved the investor may proceed to carry out the following: (a) Apply for company registration (b) If outright purchase of factory building is desired - Payment of 10% deposit of the selling price of the standard factory building within 3 months of approval; - Payment of the balance 90%, 5 months after; (c) Renting of factory building - Down payment of one year rent required not exceeding 3 months after signing the rental contract. Thereafter, rental charges shall be paid in the first quarter of every year. (d) Leasing the standard factory - Payment of 40% lease value on approval - Payment of 30% at the end of the 5th year - Payment of 30% balance at the end of the 10th year. (e) Leasing of serviced plots - Down payment of 40% on completion of factory building - 30% at the end of the 5th year - 30% at the end of the 10th year Construction must be completed within a period of one year which can be extended for another 6 months. A plan of the building shall be submitted to the Authority for approval. The land lease contract shall be signed within 2 months after allocation of land. The area occupied by such building shall be between 60%-70% of the leased land and construction shall start within 3 months after signing the lease contract. iv) With condition(s) in (iii) fulfilled, the investor may proceed to carry out the following: Remittance of Investment Capital through banks in the zone and notify the Authority on arrival v) When the factory building is ready, investor(s) may bring in machinery for installation and workers employed. Therefore, the Authority shall be required to carry out pre-inspection, and if found satisfactory, a certificate to commence production will be issued. vi) Companies intending to sell the permitted 25% of their total production in the domestic market, will be required to notify the Authority for necessary documentation and payment of appropriate levies and charges as applicable. vii) The company shall apply to the Authority for assessment of invested capital for later repatriation purposes. This is applicable to companies which are 100% foreign owned and those with part foreign equity participation only. INVESTMENT REQUIREMENTS 1. Industries must be guaranteed to be environmentally friendly. 2. At least 75% of total products to be exported. 3. Maximum of 25% of products can be exported to the customs. territory on payment of appropriate levies and duties. 4. Minimum investment capital outlay is 500,000 US Dollars or its Naira equivalent. TYPES OF INDUSTRIES PERMISSABLE IN NIGERIA EXPORT PROCESSING ZONES - Electrical and Electronic Products - Leather Products - Plastic Products - Petroleum Products - Rubber Products - Cosmetics - Garments - Chemical Products - Metal Products - Educational Materials and Equipment - Communication Equipment and Materials - Sports Equipment and Materials - Machinery - Handicraft - Optical Instuments and Appliances - Medical Kits and Instruments - Biscuits and Confectionaries - Printed Materials, Office Equipment and Appliances - Paper Materials - Food processing - Pharmaceutical Products. INVESTMENT OPPORTUNITIES IN THE TOURISM SECTOR The Federal Government of Nigeria in its determined efforts to develop and promote tourism into an economically viable industry had in 1991 evolved a tourism policy. The main thrust of the policy is to make Nigeria a prominent tourism destination in Africa, generate foreign exchange, encourage even development, promote tourism-based rural enterprises, generate employment, accelerate rural-urban integration and foster socio-cultural unity among the various regions of the country through the promotion of domestic and international tourism. It also aims at encouraging active private sector participation in tourism development. The following special investment potentials exist within the country: - Overland Safaris - National Parks - Game and Gorilla viewing - Deep Sea Recreational Fishing - Lake and River Fishing - Archaeological Tours - Beach Resorts and Hotels - Transportation-Water, land and sea - Surfing and snorkeling - Theme Parks and Exposition Centres PROCEDURES FOR ESTABLISHING A BUSINESS ENTERPRISE BY A FOREIGNER IN NIGERIA STEP 1 Incorporation of the Business at the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act, 1990. STEP 2 Registration of the company with Nigerian Investment Promotion Commission for the granting of Business Permit. IPC also grnats approvals for expatriate quota positions and incentives. a. Requirements for Business Permit i. Perchase NIPC form I . Completed form submitted with original receipt. ii. Certificate of Incorporation. iii. A minimum share capital holding in the joint venture. iv. Details of share holding in the joint venture. v. Joint venture/partnership Agreement where applicable. vi. Memorandum and Articles of Association. vii CAC’s Form CO2 and CO7 duly certified. viii. Evidence of capital importation for wholly foreign companies. ix. Approval from the appropriate professional bodies where applicable. b. Expatriate Quota In addition to the requirements listed under Business Permit, the following additional requirements have to be met for expatriate quota approvals. i. Evidence of acquisition of operational premises and operational machinery/equipment in the case of industrial establishment. ii. Evidence of Foreign Capital Importation. iii. Management and Technical Services agreement (for service companies). iv. Tax Clearance Certificate. v. Minimum authorized share capital of N5million. vi. Evidence that the personnel required is not likely to be available in Nigeria. vii. Minimum share capital of N15 million (for two automatic expatriate quota positions) and of N30 million share capital (in case of four automatic expatriate quota positions). viii. Supply names, address, qualifications and positions to be occupied by the expatriates. ix. The company must produce its project implementation program. x. The company must produce a training program for Nigerians in addition to management succession schedule. xi. The company will furnish its feasibility report where applicable especially for new and prior industries. c. Incentives These include pioneer Status and Technical Agreement incentives: PIONEER STATUS The benefit of a Pioneer Status Certificate is that the holder (i.e. the company) is exempted from payment of tax for a specified number of years (5 years or 7 years for companies located in economically disadvantaged areas). Requirements I. Certificate of Incorporation. ii. Memorandum and Articles of Association. iii. Feasibility study. iv. Tax Clearance Certificate. v. Joint Venture Agreement. vi. Evidence of acquisition and installation. vii. Evidence of development carried out at factory site. viii. NIPC Form II (to be purchased from NIPC at N10,000 and should be returned with original purchase receipt). ix. The company must not be more than one year old from its commencement date of production. x. Evidence of physical development of the factory site. xi. Joint venture must attain a minimum expenditure of N5 million. TECHNICAL SERVICE AGREEMENT This is a form of technical co-operation agreement in which a party will agree to offer technical services to a company for the payment of a fee. Details and terms of such agreements are normally worked out between the parties involved but such agreements should be registered with the National Office for Technical Acquisition and Promotion (NOTAP).