INVESTMENT

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INVESTMENT

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 labour, 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, wheat.

Root crops: Cassava, yam, ginger, potato, coco yam.

Legumes: Soya beans, groundnuts, cowpeas.

Fruits: Mango, banana, oranges, guava, papaw, 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, grape vines 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.

(f) Development and fabrication of appropriate small-scale mechanized technologies for on-farm processing and secondary processing of agricultural produce.

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.

(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.

(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.

-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:

- 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.

- 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.

-Statement of financial capability
-Statement of technical capability
-Proof of statutory existence of company

-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.

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.

- Statement of financial capability
- Statement of technical competence
- Proof of statutory existence of company.
- Evidence of tax clearance
- Payment of prescribed fee

- 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.

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.

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;

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 inthe following areas:

(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

- 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.

* Facilitating entry into the telecommunications market by private enterpreneurs.

* Creating a regulatory enviroment for the supply of telecommunications equipment and facilities.

* 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.

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, plotical, 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 thanthe 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 108 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 telecomms equipment initiated over five years ago was not concluded as a result of the plotical 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 attrached as an annex to the application and shall contain the following among others:

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:

- Payment of 10% deposit of the selling price of the standard factory building within 3 months of approval;

- 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

- 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 comanies which are 100% foreign owned and those with part foregn equity participation only.

INVESTMENT REQUIREMENTS

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

- 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 viabe industry had in 1991 evolved a touriam policy. The main thrust of the policy is to make Nigeria a prominent tourism destination in Africa, generate foreign exchang, 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:

-           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 for N10,000.00. Completed form submitted with original receipt.

ix. Approval from the appropriate professional bodies where applicable.

b. Expariate 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.

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.

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

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).

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.

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).

e. Technical Committee on Business Approvals

A committee of NIPC has been constituted to consider and grant or reject applications for business permit, pioneer status and expatriate quota within 14 days. The committee is headed by the Executive Secretary.

1) Maintaining a Hangar. Existing hangar owned by the airline needs refurbishment and modern equipment;
2) Aircraft Engine Workshop - A workshop that can effect A, B, C, & D checks on various grades of aircrafts used in the Country and in the West African sub-region;
3) Development and management of a five-star hotel in Lagos.
4) Provision of catering equipment and infrastructure to meet the needs of the airline industry;
5) Establishment of a modern aircraft training facility;
6) Development/construction of airport terminals.

1) Liner Services - Foreign Shipping Companies can engage in the provision of Liner Services through joint sailing agreement with Nigerian shipping companies;
2) Cabotage - Government encourages joint ventures in the ownership and operation of light vessels between ports, which must be fully registered in Nigeria;
3) Ship Acquisition and Ship Building Fund/Lifting of Crude Oil and Gas;
4) Pollution Control in the Oil Producing Coastal Regions
5) Search and Rescue - provision of equipment to meet various requirements;
6) Training /Technical Assistance;
7) Tanker Trade - joint venture with Nigerians in the exportation of Nigerian crude oil;
8) Proposed Nigerian Maritime Consultancy Centre - this will cover the following:

a) Marine engineering spare parts supplies;
b) Ships and Port management;
c) Ships, Ports and boat supplies;
d) Seaports, oil terminals and ship communication equipment;
e) Seaports and ships educational material;
f) Combined maritime publications.

There is need for modernization of the Nigerian Railway System which is still based on the prevailing technology at its inception early in the century, that is the 3" - 6" (1067mm) guage. These include:

1) Conversion of wagon bearings to roller bearings;
2) Conversion of train braking system from vacuum to air;
3) Conversion of AB coupler to more effective system;
4) Modernisation of track maintenance;
5) Improvement of ticketing system;
6) Manpower development and training.

1) modern buses equipped with communication system;
2) trams to facilitate passenger movement in both rural and urban areas;
3) suitable haulage trucks for goods and services;
4) service facilities at the terminals on both the highways and destinations;
5) collection of tolls for the use of the service facilities provided to help sustain the system;
6) computerization of services to enhance efficiency and control of operations;
7) commercialization of terminal facilities;
8) central terminals in various urban and rural locations in the country with service facilities.

1) Dredging of the River Niger; 2) Rehabilitation of Warri and Lokoja Dockyards, operational vessels, pollution control, etc; 3) Study and Development of River Benue System for all year round navigation; 4) Dredging of Oguta Lake for effective navigation with larger vessels.

The establishment of the Onne Free Port Zone makes Nigeria the focal point for the oil and gas industry in West Africa. It provides incentives such as, easy registration in the Nigerian oil and gas market - drilling, construction, pipe coating, ship repair, etc, minimum bureaucracy, free corporate tax, import and export duties exemption for goods within the zone, 100% foreign repatriation of capital and profit, 100% foreign ownership, free pre-shipment inspection for imported goods, free expatriate quota and the possibility to sell products and services in the West African sub-region.

It also offers excellent business opportunities to investors wishing to participate in both planned and existing projects that require huge investment - the Bonny Terminal, Eleme Petrochemical complex (NNPC), fertilizer plant (NAFCON), aluminum smelter plant (ALSCON) and the West African Gas Pipeline (Escravos - Ghana).

1) Bulk Cargo Terminal - major bulk commodities such as coal, sugar, petroleum, grain, ore and bauxite, can be handled here.
2) Onne Self-Run Transit Terminal - this will accommodate a container terminal, a RORO terminal and a center with trans-shipment facilities for the West African sub region and neighbouring land-locked countries.
3) Lagos Specialised Trans-Shipment Terminal - this will provide a break away from the usually congested Apapa and Tin Can Island ports, serving both the manufacturing and trading sectors.

CONTACT ADDRESSES
Nigeria Airways Limited
Airways House
Murtala Mohammed Airport
Ikeja, Lagos
Tel: 234-(1)-493-7464, 497-0872/3
e-mail: wt-md@skypower-ng.com

Federal Airports Authority of Nigeria
Murtala Mohammed International Airport
P.M.B. 21607
Ikeja, Lagos
Tel: 234 (1) 496-8080, 496-8084

Nigeria Civil Aviation Authority
Aviation House (Domestic Wing) Ikeja Airport
P.M.B. 21029, 21038
Ikeja, Lagos
Tel: 234 (1) 493-0030, 470-8951, 493-0026

Nigerian Airspace Management Agency
Murtala Mohammed International Airport
Domestic Wing
P.M.B. 21084
Ikeja, Lagos
Tel: 234 (1) 470-8956 Fax: 234 (1) 497-0870
e-mail: iidrisu@nama.com

Nigerian College of Aviation Technology
P.M.B. 1039
Zaria
Tel: 234 (69) 322-021/2, 330-233; Fax: 234 (69) 334-756/869

Federal Ministry of Aviation
Federal Secretariat
Abuja
Tel: 234 (9) 523-2053, 523-9101, 523-2112

National Maritime Authority
4, Burma Road
Apapa, Lagos
Office of the Director-General
Tel: 234 (1) 587-1673, 580-4800-4
Fax: 234 (1) 545-0722
e-mail: dgnma@nigeria-maritime.com
Web-site: www.nigeria-maritime.com
Office of the Director (Commercial & Operations Department)
Tel: 234 (1) 587-2068, 580-4800
Fax: 234 (1) 587-0477
e-mail: docnma@nigeria-maritime.com

Federal Ministry of Transport
Annex 3, New Federal Secretariat Complex
Shehu Shagari Way
Abuja
Tel: 234 (9) 523-7051 - 3

Nigerian Ports Authority (NPA)
Tofa House, Plat 770
Central Business District Area,
Wuse, Abuja
Tel: 234 (9) 523-7140-4
Fax: 234(9) 523-7143

Nigerian Railway Corporation (NRC)
Yellow House, Plot 739
Off Ibrahim Babangida Avenue
Maitama District
P.M.B. 5016, Abuja
Tel: 234 (9) 523-1912/3

Nigerdock Nigeria, plc
C/o Federal Ministry of Transport
2nd Floor, Annex 3, Federal Secretariat,
P.M.B. 1136,
Abuja

Nigeria Shippers' Council
51, Usuma Street, Maitama District
P.M.B. 296, Garki
Abuja
Tel: 234 (9) 523-0653

As part of the efforts to provide an enabling environment that is conducive to the growth and development of industries, inflow of foreign direct investment (fdi), shield existing investments from unfair competition, and stimulate the expansion of domestic production capacity; the federal government of nigeria has developed a package of incentives for various sectors of the economy. These incentives, it is hoped, will help revive the economy, accelerate growth and development and reduce poverty.

Nigerian government accepts the private sector as the engine of growth and the creator of wealth, while the government's major responsibility is to provide the enabling environment for the private investors to operate. In this regard, laws which had hitherto hindered private sector investments have been either amended or repealed and a national council on privatisation has been established to oversee orderly divestment to private operators in vital areas of the economy such as mining, transportation, electricity, telecommunications, petroleum and gas.

Nigerian government's policy of economic deregulation and liberalisation has opened up new windows of opportunity to all investors wishing to invest in the country's economy. In this connection, an interest rate regime

Supportive of the real sector of the economy as well as an exchange rate that is market determined are the object of government policy. The security of life and property of the citizens are being vigorously pursued with the reorganisation and strenghtening of the nigerian police force.

In addition, the nigerian investment promotion council (nipc) has been strenghtened to enable it serve as a one-stop office for clearing all the requirements for investment in the country. The tarrif structure is being reformed with a view to boosting local production.

Government has introduced a new visa policy to enable genuine foreign investors to procure entry visa to nigeria within 48 hours of submission of required documentation.

Existing "expatriate quota" requirement for foreign nationals working in nigeria is in the process of being replaced with "work permit" which will be administered by the nigerian investment promotion council (nipc).

Within the past few years following the end of military dictatorship in nigeria, government has progressively introduced a number of incentives designed to promote investments. These are grouped as follows:

Taxation:
fiscal measures have been drawn to provide for deductions and allowances in the determination of taxable income of manufacturing enterprises, including:

· pioneer status, which is a concession to pioneer companies located in economically disadvantaged areas, providing a tax holiday period of five to seven years. These industries must be considered by the government, to be beneficial to the country's economy and in the interest of the public.
Companies that are involved in local raw material development; local value added; labour intensive processing; export oriented activities; in-plant training; are also qualified for additional concessions.

Up to 120% of expenses on r&d are tax deductible provided that such r&d activities are carried out in nigeria and are connected with businesses to which allowances are granted. The result of such research could be patented and protected in accordance with internationally accepted industrial property rights.

30% tax concession for five years to industries that attain minimum local raw materials utilisation as follows:- - agro 80% - agro allied 70% - engineering 65% - chemical 60% - petro-chemical 70%

15% tax concession for five years. The rate is graduated in such a way that an industry employing one thousand persons or more will enjoy 15% tax concession while an industry employing one hundred will enjoy only 6%, while those employing two hundred will enjoy 7%, and so on.

10% tax concession for five years. This applies essentially to engineering industries, while some finished imported products serve as inputs. This is aimed at encouraging local fabrication rather than the mere assembly of completely knocked down parts.

10% tax concession for five years. This concession will apply to industries that export not less than 6% of their products.

20% of the cost of providing basic infrastructures such as roads, water, electricity, where they do not exist, is tax deductible once and for all.

100% tax holiday for seven years and additional 5% depreciation over and above the initial capital depreciation.

A 25% import duty rebate was introduced in 1995 to ameliorate the adverse effect of inflation and to ensure increase in capacity utilisation in the manufacturing sector. Investors are however, advised to ascertain the current operative figures at the time of making an investment, because these concessions have undergone some ammendments in the past few years.

This incentive is given to manufacturing companies that incur capital expenditure for purposes of approved expansion of production capacity; modernisation of production facilities; diversification into related products. It is aimed at encouraging reinvestment of profits.

Under this scheme, a company would enjoy generous tax allowance in respect of qualifying capital expenditure incurred within five years from the date of the approval of the project.

Dividends derived from manufacturing companies in petro-chemical and liquefied natural gas sub-sector are exempt from tax.

Companies with turnover of less than n1 million are taxed at a low rate of 20% for the first five years of operation if they are into manufacturing.

Dividend from companies in manufacturing sector with turnover of less than n100 million is tax-free for the first five years of their operation.

Transferability of funds section 24 of nipc decree provides that a foreign investor in an enterprise shall be guaranteed unconditional transferability of funds through an authorised dealer in freely convertible currency of:

Remittance of proceeds (net of all taxes)and other obligations in the event of a sale or liquidation of the enterprise or

By the provision of section 25 of the same nipc decree, no enterprise shall be nationalised or

Expropriated by any government of the federation, unless the acquisition is in the national interest or for public purpose; and no person who owns either wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person.

Right of access to the courts for the determination of the investor's interest or right and the amount of compensation to which he is entitled.

In addition to all these safeguards, the nigerian government is prepared to enter into investment protection agreement with foreign enterprises wishing to invest in nigeria.

Any company incorporated in nigeria is allowed to have access to land rights for the purpose of its activity in any state in the country. It is, however, a requirement that industrial companies comply with regulations on use of land for industrial purposes and with environmental regulations. Land lease is usually for a term of 99 years unless the company stipulates a shorter duration.

The following fiscal incentives have been approved by the government in the gas production phase:

Tax rate under petroleum profit tax (ppt) act to be at the same rate as company tax which is currently at 30%;

Capital allowance at the rate of 20% per annum in the first 4 years, 19% in the 5th year and the remaining 1% in the books;

Capital allowance is 33% per annum onsight-straight-line basis in the first three years with with 1% remaining in the books;

All investments necessary to separate oil from gas from the reserves into suitable products is considered part of the oil field development;

Capital investment facilities to deliver associated gas in usable form at utilisation or transfer points will be treated for fiscal purposes as part of the capital investment for oil development;

Capital allowances, operating expenses and basis for assessment will be subjected to the provisions of the ppt act and the revised memorandum of understanding (mou).

Incentives for encouragement of exploitation and utilisation of associated gas for commercial purpose include:

An initial tax free period of three years renewable for an additional two years;

15% investment capital allowance which shashall not reduce the value of the asset;

All fiscal incentives under the gas utilisation down-stream operations in 1997 are to be extended to industrial projects that use gas in power plants, gas to liquid plants, fertiliser plants and gas distribution/transmission plants;

Interest on loans for gas projects is to be tax deductible provided that prior approval was obtained from the federal ministry of finance before taking the loan;

Incentives and fiscal measures approved by the government that favour and encourage large investment in the region include:

Initial tax holidays period has been extended from 3 to 5 years and renewable for another 2 years;

Petroleum industry
very similar generous incentives package was granted the joint venture system and is contained in the mou signed with oil companies. Details of this can be down-loaded from our soon-to-be-launched embassy website - ww.nigeriaembassyusa.org.

Without prejudice to governments deregulation of the financial sector, banks have been enjoined to recognise the differences in the gestation periods within each category of agricultural loans ranging from 6 months to 10 years, for crops, livestock, fisheries, forestry and wild life.

Companies in the agro-allied business do not have their capital allowance restricted to 60% but graduated in full - 100%;

Nigeria is richly endowed with a variety of solid minerals of various categories ranging from precious metals, stones and industrial

The ministry of solid minerals has worked out a package of attractive incentives for potential investors in the solid minerals sector, including:

Deferred royalty payments depending on the magnitude of the investment and strategic nature of the project;

In addition to roll-over relief under the capital gains tax (cgt), companies replacing their plants and machinery are to enjoy a once-and-for-all 95% capital allowance in the first year with 5% retention value until the asset is disposed of, etc.

The tourism sector was accorded preferred sector status in 1991. This makes it qualify for such incentives as tax holidays, longer years of moratorium and import duty exemption on tourism related equipment;

State governments are prepared to facilitate acquisition of land through the issuance of certificate of occupancy for the purpose of tourism development;

25% of income derived from tourists by hotels in convertible currencies are tax-exempt provided such income is put in a reserve fund to be utilized within 5 years for expansion or the construction of new hotels, conference centres, etc that are useful for tourism development.

All areas of investment in this sector are considered to be pioneer product or industry. As a result, there is a tax holiday of 5 to 7 years for investments in the sector.

There has been a deregulation of this sector resulting in the emergence of independent power producers (ipp) that will soon start operation in nigeria.

Government provides non-fiscal incentives to private investors in addition to a tariff structure that ensures that investors recover their investment over a reasonable period of time, bearing in mind the need for differential tariffs between urban and rural areas. Rebate and tax relief are provided for the local manufacture of telecommunications equipment and provision of telecommunication services.

Companies profits in respect of goods exported from nigeria, are exempt from tax provided the proceeds are repatriated to nigeria and used exclusively for the purchase of raw materials, plants equipment and spare parts.

Profits of companies whose supplies are exclusively input to the manufacturing of products for exports, are excluded from tax.

All new industrial undertakings including foreign companies and individuals operating in an export processing zone (epz), are allowed full tax holidays for three consecutive years.

As a means of encouraging industrial technology, companies and other organisations that engage in research and development activities for commercialisation are to enjoy 20% investment tax credit on their qualifying expenditure.

All companies engaged wholly in the fabrication of tools, spare parts and simple machinery for local consumption and export are to enjoy 25% investment tax credit on their qualifying capital expenditure while any tax payer who purchases locally manufactured plants and machinery are similarly entitled to 15% investment tax credit on such fixed assets bought for use.

Export proceeds can be retained in foreign currency in a domiciliary account with any authorised bank in nigeria.

A special export development fund has been set up by the government to provide financial assistance to private sector exporting companies to cover a part of their initial expenses in some export promotion activities, including training courses, symposia, seminars and workshops, export market research, advertising and publicity campaigns in foreign markets, trade missions, etc.

There is also an export adjustment fund scheme which serves as supplementary export subsidy to compensate exporters for the high cost of local production arising mainly from infrastructural deficiencies, and other negative factors beyond the control of the exporter.

Finally, nigerian government established in i991, an export processing zone (epz), which allows interested parties to set up industries and businesses within demarcated zones, with the objective of exporting the goods and services manufactured or produced within the zones.

Calabar in cross river state has been designated as the primary epz territory in nigeria. Incentives within the territory include, tax holiday relief; unrestricted remittance of profits and dividends earned by foreign investors; no import or export licenses are required; up to 100% foreign ownership of enterprises; sale of up to 25% of production is permitted in domestic market; etc,

All exports under the nigerian value added tax (vat) system are zero-rated and dividends received from investment in export-oriented businesses are to be free of tax.

performed by or on behalf of SWEDE CONTROL/INTERTEK SERVICES on behalf of THE GOVERNMENT OF THE FEDERAL REPUBLIC OF NIGERIA

In September 1999, the Federal Republic of Nigeria re- introduced the pre- shipment programme for inspection of imports.

Swede Control/ Intertek (SCI) is one of four Pre-shipment inspection companies chosen to participate in the program. The territories apportioned to SCI are shown in Appendix A.