INVESTING IN NIGERIA

 A PRESENTATION AT THE NIGERIA MINING ROADSHOW

SHETTIMA BARMA
DEPUTY DIRECTOR
NIGERIAN INVESTMENT PROMOTION COMMISSION

AUSTRALIA | AUGUST 2018

Private and Confidential
 Nigeria – Australia

Comparative statistics GDP ($’bn)

Nigeria Australia
1574
NIGERIA Australia 1465
1350 1323
Capital Abuja Canberra 1208
Official Language English English
Land Area 910,770 km² 7,741,220 km2
People (2017)
515 568
Population (m) 191 25 481
404 376
Pop. growth rate (%) 2.6 1.1
Median age 18.4 38.7
Economically active pop. (15-64) 98m 41.8m
Economy (2017) 2013 2014 2015 2016 2017
GDP nominal ($’ bn) 375.8 1,323
Agriculture (% GDP) 24.5 3.6
Industries (% GDP) 22 26.1
Population (m)
Services (% GDP) 53.6 70.3
GDP growth rate (%) 0.8 2.2
Nigeria Australia
411
Inflation (%) 15.7 1.3
Labour (2017) 61%
Labour force (% of pop.) 59m (31) 13m(52)
Trade (2017)
181 Age 15-64
Import $’bn, (% of GDP) 30.7 (8.2) 221.4(17)
Export $’bn, (% of GDP ) 44.5 (11.8) 229.7(17)
Trade balance (% of GDP) 13.8(3.6) 8.3(<1) 24 33
61%
Investment Climate (2017) 0.1%
EoDB 145 14 2015 2020 2025 2030 2035 2040 2045 2050
GCI 125 21

Sources: United Nations World Population Prospects; World Development Indicators, World Bank Doing
1
Business (EoDB) Report 2017; Global Competitiveness Index (GCI) 2017-2018; www.countryeconomy.com
Nigeria in global
context

2
How the world will look in 2050

Regional % Change, 2017–2050 Forecast

Africa 101.2

Oceania 40.4

Latin America and Caribbean 20.8

Northern America 20.3

Asia 16.7

Europe -3.6

Total population, bn

2017 1.3 7.6

2050 2.5 9.7

2100 4.5 11.2

Source: United Nations World Population Prospects: the 2017 Revision, medium variants 3
 The African growth story is real

1988 - 2000 2001 - 2012 2013 - 2030

GDP growth (CAGR)

Above 5%
Between o% and 5%
Less than 0% (negative)

Number of economies growing faster than 5% a year

24
21 1988 - 2000

11 11 2001 - 2012

2013 - 2030
7 8
6 6
2
3 1 1 3 4
1

Asia-Pacific CIS Central and Southeast Middle East SSA

Europe (CSE)

Source: EY’s 2015 Africa Attractiveness Survey 4

 But a wide perception gap exists: present optimists, absent doubters

Africa is the most Respondents who are not

#1 attractive investment
destination in the world
established in Africa

believe attractiveness Africa is the second

least attractive
66% has improved over the
past year investment destination
in the world

believe attractiveness Believe attractiveness

improved over the past
81% will improve over the 30% year
next three years

Respondents who are already Believe attractiveness

established in Africa 50% will improve over the
next three years

Source: EY’s 2015 Africa Attractiveness survey (total respondents:501) 5

 Nigeria could be the fastest growing African economy to 2050

5%
Projected average real GDP growth p.a., 2016-2050
4.2%
Nigeria could be the fastest growing African economy, and could
move up the GDP rankings, to 14th by 2050, if it can diversify its
4% economy away from oil and strengthen its institutions and
infrastructure.
1.9%

3%

2%
2.3%

1%

0%

-1%
China

Argentina

Poland

France
India

Pakistan

Mexico

Turkey

Thailand
Iran
Egypt

Netherlands

Germany
Saudi Arabia

Brazil

United States

Italy
Bangladesh

Canada
Nigeria

Indonesia

United Kingdom
Russia

Spain
Vietnam

Colombia

Japan
Australia

South Korea
South Africa
Philippines

Malaysia

Average pop growth p.a % Average real growth per capita p.a % Average GDP prowth p.a. (in domestic currency)

Source: PWC Analysis, from “The long view: how will the global economic order change by 2050?” 6
Favourable demographics offer an affordable long term talent pool

4.2
Labour costs (US$/hr)

2.4
1.5 1.4 1.3
1.0 1.0
0.5 0.4

411
Population (millions) 371
333
297
264 35%
234
191 206
61%
3rd most
populous country
by 2050 4%

2017 2020 2025 2030 2035 2040 2045 2050

Source: United Nations World Population Prospects: the 2017 Revision, medium variants, 7
internet search
Nigeria’s
economy

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Economic Recovery and Growth Plan (ERGP)

Restoring Growth
• Macroeconomic stability
• Economic diversification

Investing in Our People Building a Globally Competitive Economy

• Social Inclusion • Investing in infrastructure
• Improved human capital 2017 - 2020 • Improving the business environment
• Job creation and youth empowerment • Promoting digital-led growth

Broad Policy Objectives

• Double manufacturing’s share of GDP • FDI target of $10bn

• Maintain a competitive exchange rate • Create 15m new jobs
• Reduce inflation from 18.6% to 9.9% • Grow GDP at average of 4.62%
• Increase tax/GDP ratio from 6% to 15% • Top 100 ease of doing business ranking by 2020
• Improve budget preparation and execution process • Rebalance domestic/foreign debt from 84:16 to 60:40

Source: ERGP document 9

ERGP: Priority sector objectives and private sector investment requirements

Services Manufacturing Agriculture Real Estate Oil and Gas Solid Minerals
• Increase internet • Focus on agro- • Ensure self- • Recapitalize • Increase oil • Facilitate
penetration from processing and sufficiency in Federal Mortgage production to 2.5 development of
47.4% to 75% industrial hubs tomato paste, rice, Bank from N2.5b mbpd coal to fire power
• Encourage local • Create forward and wheat to N500b • Accelerate plants
production of ICT and backward • Become net • Mobilize private building of critical • Integrate artisanal
hardware and linkages among exporter of key capital through pipeline miners into formal
software industrial sub- agricultural Government seed- infrastructure sector
• Channel funding sectors products funding in roads, • Promote domestic • Integrate mining
to entrepreneurs • Increase local • Fast-track the housing, and use of LPG and transport and
though content in raw development and agriculture CNG power needs in
accelerators and materials and execution of • Deliver 2m • Increase local national
incubators machinery irrigation projects housing units via refining capacity implementation
• Strengthen • Increase export • Extend the Anchor Family Homes • Develop domestic plans
enforcement of IP potential of Borrowers Fund gas infrastructure • Produce geological
rights manufactured Programme to all • Invest in technical for power and maps of the entire
• Increase tourism goods States and major & vocational domestic country
by 10% a year • Increase R&D, crops training needed by consumption
from 2017 technology and the industry
innovation

$94.11 $35.7b $25.5b $21.8b $15b $3.9b

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 Cautious economic recovery

Modest GDP growth… Inflation is 40% lower than the highs of 2017
Annual growth rate, % Recession Period 17th month of
18.72 consecutive
drop

% 9.62
1.95 9.00
8.20
8.00 11.23

2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2016 2016 2016 2016 2017 2017 2017 2017 2018 Jan. 13 Jan. 14 Jan. 15 Jan. 16 Jan. 17 Jun. 18

FX reserves risen by 51% over last 12 months Exchange rates converging…

US$bn Naira/USD Inter-Bank Parallel/IEFX
Premium Price 494.70
45.82 47.27 Feb. 2017
40.67
361.06
34.24 62%

28.28 28.59 18%

31.28 305.31 305.87

Jan. 13 Jan. 14 Jan. 15 Jan. 16 Jan. 17 Jan.18 Jul. 18

Jan. 13 Jan. 14 Jan. 15 Jan. 16 Jan. 17 Jan. 18 Jun. 18

Sources: Central Bank of Nigeria, National Bureau of Statistics 11

 Improving
Nigeria’s Business
Environment

12
 Africa’s investment attractiveness

Biggest draws:
natural resources,
high growth rates
and large domestic
markets…

…yet concerns about business

environment persist

Source: EY’s 2015 Africa Attractiveness Survey 13

 Africa’s perceived barriers to investment…

Business environment is
most important barrier…

… incentives are least

important barrier

Source: EY’s 2015 Africa Attractiveness Survey 14

ob1

Security concerns should not discourage investments

Security incidents have reduced… …and are far from commercial hub
4,000

3,500
Sambisa
3,000 Forest

2,500

2,000

1,500

1,000

500

0
Comparative flying distances
Manila to Taipei, Taiwan 1,161 km
Deaths Per Month 12-month Moving Average Singapore to Central Java, Indonesia 1,169 km

Above represents incidents motivated by political, economic or social grievances

Bangkok to Kuala Lumpur, Malaysia 1,176 km

Sources: Council on Foreign Relations, www.timeanddate.com/worldclock/distances.html 15

Slide 16

ob1 update
oladipupo baruwa, 9/08/2018
 Business case for improving business operating conditions

Strong correlation between economic prosperity and ease of doing business

Income Per Capita (log scale) USD per person per year
100,000 Norway
USA
R² = 0.4918
# of Objs = 185
Brazil
Nigeria

10,000
Singapore

1,000
South Africa

100
200 180 160 140 120 100 80 60 40 20 0
Ease of Doing Business Rank (2017)

Source: World Bank Doing Business 16

 Ease of doing business reforms

President Muhammadu Vice President Yemi Osinbajo

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Buhari, G C F R SAN, G C O N

Presidential Enabling Business Remove critical bottlenecks Up by 24 places in 2018 World

Environment Council (PEBEC) & bureaucratic constraints Bank Ease of Doing Business
inaugurated in July 2016 to doing business in Nigeria ranking, now 145/190

No of announced No of initiatives Participating Success rate

Launch date reforms agencies

NAP 1.0 February 2017 8 22 12 72%

EO 1 May 2017 Transparency and improving the business environment

NAP 2.0 October 2017 11 22 29 52%

NAP 3.0 February 2018 9 28 26 68%

Source: Enabling Business Environment Secretariat Reports 17

 Reforms over the past 18 months
Starting a Business Getting Credit
▪ Online name reservation ▪ Borrowers have the right by law to access
▪ Consolidation of incorporation forms their credit reports .
into one form (CAC.1) which can be ▪ The operationalization of a modern, web-
completed electronically. enabled National Collateral Registry

Registering Property Paying Taxes

▪ Sworn affidavit not needed for title ▪ E-filing of Federal Taxes.
search at land registry (Lagos) ▪ Centralized electronic payment of all
▪ Digitization of land records and cadastral Federal Taxes.
mapping of Kano City.

Dealing with Construction Permits Trading Across Borders

▪ Publicized fees, procedures and laws. ▪ Reduction of documents for export from 10
▪ Operationalized the Lagos e-planning to 7 and similarly for import from 14 to 8.
platform.

Getting Electricity Entry & Exit of People

▪ Reduction of procedures for new grid ▪ Harmonization of four forms on arrival into
connections. one form by the Nigerian Immigration
Service.
▪ 48 hour visa processing timeline across
missions abroad.
Email: [email protected] | Website: www.pebec.gov.ng | Twitter: @EBESnigeria | Facebook: www.facebook.com/EBESnigeria

SOURCE: Enabling Business Environmnet Secretariat 18

Investing in solid
minerals

19
Policy Documents

Minerals and Mining Act

Nigerian Extractive Industries Transparency Initiative (NEITI) Act

The National Minerals and Metals Policy

Nigerian Minerals and Mining Regulations

Guidelines on Mineral Titles Application

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Nigeria is richly endowed with variety of solid mineral deposits and multiple
coloured gemstones

Overview Sokoto

▪ Nigeria’s mining sector is diverse in Katsina

Iron Ore
mineral resources including high value Zamfara Jigawa
Yobe Gold
commodities Kebbi Borno Diamond
Kano
▪ 44 Exploitable minerals in proven Chromite/Nickel
Uranium
commercial quantities in more than
Copper
500 locations Bauchi Gemstone
Kaduna
▪ Despite the abundant resources, Talc/Asbestos

However, the mining sector only Niger Gombe Manganese

accounts for 0.3% of national Adamawa Silver

Bismuth
employment, 0.02% of exports and FCT
Plateau Sapphire
Tin Ore
about US$1.4 billion to the Nigerian Ruby
Columbite
Kwara
GDP Nassarawa Fluorite
Tantalite
Zircon
▪ The government has designated a Oyo
Taraba
Wolframite
Cordierite Magnesite
number of strategic minerals that it Osun Ekiti
Kogi Amethyst Molybdenite
believed had the potential to make a Benue
Rutile
Beryl
significant contribution to Nigeria’s Ogun Ondo
Lead/Zinc
Enugu
economic development. These Lagos
Edo Cross
Emerald
Ilmenite
Anambra
include: Barite, Gold, Bitumen, Iron Ebonyi River Tourmaline
Gypsum
ore, Lead/Zinc, Coal and Limestone Aquamarine Coal
Abia
Delta Imo Topaz Limestone
Akwa Spessartine Clay/Kaolin
Rivers Ibom
Bayelsa Morganite Bentonite
Barite
Kunzite
Phosphate
Quartz
Salt

Source: Nigeria Ministry of Solid Minerals Development, Investment Brochure 21

Compendium of Investment Incentives in Nigeria

 Compilation of fiscal incentives in Nigerian

tax laws and duly approved sector-specific
incentives
 6 principal sections
– Investment policies and protections
– General tax-based incentives
– Sector-specific incentives
– Tariff-based incentives
– Export incentives
– Special Economic Zones
 First step in understandingimpact of
incentives in achieving Government’s
economic objectives and considering
incentive reforms
https://www.nipc.gov.ng/investment-compendium/

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About NIPC

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NIPC’s principal functions

Nigerian Investment Promotion Commission (NIPC) was established by the NIPC Act 16 of 1995
to encourage, promote and co-ordinate investments in Nigeria

Project Attractive • Promote Nigeria as an attractive investment destination

Investment Image • Provide information on investment opportunities and capital sources

Investment • Promote investments in Nigeria, by Nigerians and non-Nigerians

Promotion • Co-ordinate all investment promotion activities in Nigeria

• Provide support services to investors and register enterprises in Nigeria

Investment • Match-make investors with specific projects and advise on partners for JVs
Facilitation • Provide information on investment incentives and approve Pioneer Status
Incentive applications
• Initiate and support measures that enhance the investment climate
Policy Advocacy • Evaluate the impact of investments and incentives in Nigeria and make appropriate
recommendations
• Advise Government on policy matters to promote Nigeria’s economic development

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 Investor Obligation and Protections in the NIPC Act

Registration
Ownership Guarantees Dispute Resolution
Obligation
• Enterprises in which • Nigerians and • Government will not • Amicable resolution
foreigners can foreigners can invest nationalize or by mutual discussion
participate are in any sector, except expropriate any or arbitration of
required to register for those on the enterprise investor/government
with NIPC before negative list • Right of access to disputes
commencing • No restriction on courts and fair and • Provisions of any
business foreign percentage adequate Bilateral Treaty with
ownership compensation if the investor’s
acquisition is in country will apply
national interest/for • Right of recourse to
public purpose international
• No restriction on arbitration under
repatriation by ICSID Rules
foreigners of
investment returns
or sale proceeds
through an
authorized dealer

ICSID = International Centre for Settlement of Investment Disputes 25

One-Stop Investment Centre (OSIC) at NIPC

 Houses 27 agencies to facilitate investments and reduce time required to process regulatory approvals and permits
 Provides assistance with information and requirements from incorporation to expansion
 Also supports with business visa facilitation
Type of Business Generic Agencies Specific/Sector Agencies

Software
development and
creative industry

Sample
business Power
entry
scenarios
Generation

Drug Manufacturing
for export

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For further details, please contact us

Mr Shettima Barma
Deputy Director

[email protected]
[email protected]

NIGERIAN INVESTMENT PROMOTION COMMISSION

Plot 1181 Aguiyi Ironsi Street
Maitama District
Abuja

www.nipc.gov.ng

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