Nigeria Investment Information

Nigeria is becoming one of the most attractive honey pots for Investments and Foreign Direct Investments (FDI) in Africa. In effect, our country is undergoing major transformations as the largest and one of the fastest growing economies in Africa.

This page is compiled from the official guides provided by various government ministries, departments, commissions, agencies and parastatals to highlight the indicators and wide range of opportunities and incentives available to potential Foreign Direct Investors in the Government’s prioritized sectors such as Agriculture, Trading and Retail Services, ICT, Manufacturing, Mining, Oil and Gas, Power, Tourism and Hospitality, Fintech and many more.

 

INVESTMENT IN AGRICULTURE

 

Africa is blessed with the largest arable land on earth due to the comparatively lower rate of chemicalization and pollution of the natural environment. The Food and Agriculture Organization of the UN estimates that up-to 60% of the world’s arable land is in Africa, of which, large tracts are in Nigeria stretching from the tropical savanna in the north to the coastal rain-forest in the south, and the mangrove of the Niger-delta complemented by tropical and semi-temperate weather prevalent across the country. That makes agriculture an important sector of the Nigerian economy with high potential for employment generation, food security and poverty reduction. 

Nigeria’s agricultural diversity promotes the cultivation of a wide variety of agricultural produce from exotic fruits, vegetables, tree crops to root crops. Although the Nigerian Agricultural sector was largely dominated by effective subsistence farming which thrived significantly by smaller region, modern farming methods and improved distribution infrastructure have paved way for commercialization on a larger scale. To maximize the economic potential of our natural vegetation, the government has turned to foreign science to map-out soil characteristics across the country and provide detailed daily report on prevailing conditions aimed at encouraging more commercial and mechanized farming to leverage Nigeria’s agricultural ecosystem to transform the country into a leading agribusiness and agro-allied industrial nation. 

As a result, the Government’s Agriculture Promotion Policy 2016-2020, preceded by the Agriculture Transformation Agenda 2011-2015, had achieved significant progress in meeting domestic food demands, generating exports, and supporting sustainable income and job growth. According to the Nigeria Investment Promotion Commission (NIPC), the Agricultural sector contributes 25% of Nigeria’s Gross Domestic Product (GDP) and accounts for 48% of the labour force. The sector’s growth rate over the last 5 years averaged 4%. Crop production dominates the sector, accounting for 22.6% of GDP alongside livestock (1.7%), fisheries (0.5%) and forestry (0.3%). Despite the symbolic progress, the Nigerian Government highly welcomes healthy investment in Agriculture to the policy objectives of: 

doubling the growth rate of the integrated agriculture sector thereby increasing the contribution of the sector to the national GDP;

significantly reducing food imports and become a net exporter of key agricultural products;

integrating agricultural commodity value chains into the broader supply chains of domestic and foreign industries, driving job growth, increasing the contribution of agriculture to wealth creation, and enhancing the capacity of the country to earn foreign exchange from agricultural exports;

becoming self-sufficient in tomato paste, rice, and wheat;

promoting the responsible use of land, water and other natural resources;

facilitating food security, food safety and quality nutrition; and

creating a mechanism for improved sector governance by the supervising government agencies.

Investment Incentives

Agro-industrial ventures benefit from a five-year tax holiday, an agricultural credit scheme guaranteed by the CBN, subsidized fertilizers and zero import duties on raw materials used to make livestock feed.

Government has deliberately designed investment incentives to support private sector participation in the sector. While some of these incentives are in form of tax holiday, exemptions, and reliefs, there are many more that leverage on specific government policies, performance of the companies as well as relevant international investment treaties. Some of these are:

Income tax relief for a period of three years and which can be extended for a period of one year and thereafter another one year or for one period of two years – Pioneer Status Incentives

Zero Import Duty: Zero percent import duty tariffs (custom, excise and value added) for import of agricultural equipment and agro-processing equipment.

Increased tariff with additional levy on any commodity that Nigeria produce (rice, starch, sugar, wheat, tomato etc.) to promote domestic production and local content.

Exemption of interest from tax on loans granted to agricultural activities.

Exemption from Value Added Tax (VAT).

Access to Agricultural Credit Guarantee Scheme which is up to 75%.

Avoidance of double taxation agreement which eliminates double taxation with respect on income and capital gains.

Investment promotion and protection agreement provides reciprocal baseline protections for investments.

Nigeria qualifies for the Africa Growth and Opportunity Act (AGOA).

For more information, please refer to the Compendium of Investment Incentives from NIPC. 

Investment Opportunities

The Agricultural sector is open to private participation and investment opportunities abound across the various value chains. Broad categorization of these includes:

Mechanized crop production such as rice, maize, millet, cassava, sugar cane, tomato and the cash crops such as cocoa, palm kernel, rubber, among others.

Food processing and preservation across the value chains of the sector

Beef processing and packaging

Fruit juice/canned fruits

Beverages and confectionery

Cash crop processing – cocoa, palm kernel, rubber, among others

Exploitation of timber and wood processing activities

Livestock cultivation – dairy and aquaculture (fisheries) development

Horticulture development.

Agricultural input supplies and machinery.

Water resources development especially for irrigation and flood control infrastructure.

Commodity trading and transportation.

Development and fabrication of appropriate small-scale mechanized technologies for on-farming processing and secondary processing of agricultural produce.

Development of private irrigation facilities.

Production of improved seeds and agro-chemicals.

Production of feeds and feeds ingredients.

Market Research. 

Other Reasons to Invest

Availability of arable land across the country including 3.14 million hectares of irrigatable land;

Favourable weather conditions that support all-year-round agricultural activities;

Known and mapped-out soil characteristics across the country to guide crop cultivation;

Supportive government policy that is geared towards encouraging mechanized farming and agribusiness; and

Huge demand gap between the supply of agricultural produce and the industrial activities.

 

INVESTMENT IN WHOLESALE AND RETAIL

 

Nigeria is one of the most open services markets in Africa, receiving an overall rated score of 27.1 on the Services Trade Restrictions Index (STRI) published by the World Bank. Due to a growing base of Nigerian consumers, wholesale and retail sales (trade services) has become the second largest sectoral contributor to Nigeria’s GDP, 16.4% in 2018 with an estimated market size of US$109 billion.

With such huge market size, Nigeria one of the most attractive investment market for retailers in Africa, largely attributed to a growing middle class. A wide range of foreign investors, including South Africa’s retail giants – Shoprite and Pick n Pay, the Dutch retailer SPAR, and many more operate in Nigeria. These foreign investments are complemented by a host of domestic private investors who are building a chain of retail stores all across the country.

According to the Nigeria Investment Promotion Commission (NIPC), the e-commerce retail segment is growing at about 110% per annum and worth over US$12 billion. The prospects of the market segment are particularly strong with over 50% of the population being internet-savvy. Nigeria has the largest online market for apparel and footwear in Africa; it is expected to grow from US$104 million in 2014 to $1billion in 2019. Homegrown online retailing outlets like Jumia and Konga are leading the growth of this market segment. These domestic companies allow for cash-on-delivery payment, which caters to the still largely cash-based consumer base in Nigeria.

INVESTMENT IN INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)

The Nigerian information and communication sub-sector are the briskiest industry to invest in. Having evolved from a very low tele-density of 1.89% in 1993 to a magnificent 12.29% in 2018, and 14.70% in the first quarter of 2020, representing an annual average of 10% to the national GDP and about 95% of the IC segment of the economy; the industry has grown phenomenally while the country remains a major market for the fastest growing and largest telecommunications industry in Africa. With a population size of about 206 million, around 60% of whom are active internet users, the ICT industry presents attractive investment opportunities. Through various electronic platforms, Nigeria’s ICT network has revolutionized business transactions by providing the highly mobile-technology-driven population seamless ability to communicate, buy, bank, invest, distribute, and explore anytime and anywhere access to the internet is available

Nigeria, being Africa’s leading economy and population, has an overwhelming appetite for mobile connectivity. Most Nigerians have a mobile Internet connection, with up-to 15 million being active on social media. The shift that is taking place in Africa’s ICT sector is driven by a strong desire to attract new businesses and the booming market is reaping these benefits, stimulating economic growth and making way for a more digital future, a future stand to be brighter for investors.

According to the Federal Ministry of Communications, Key performance indicators are evident in the US$ 32 billion of Foreign Direct Investments (FDI) made by service providers and others, from 2001 to date, in a Sector that now employs several millions of Nigerians and expatriates. There are no fewer than 152 million active telephone lines, as well as 97 million connections to the internet, translating to 107 per cent teledensity. Nigeria now boasts over 30,000 base stations, and 11 terabytes of data landing on Nigeria’s shores through five submarine cables. This exponential effort to establish and improve ICT infrastructure is in-line with the government’s overall vision to make the ICT Sector the main pillar and catalyst of a robust Nigerian economy as ICT is mainstreamed into all aspects of national life. 

To fulfil its mandate, the government also adopted a multi-stakeholder approach through various commissions and agencies, including the private sector, with favourable policies for investment. With infrastructure in place and room for more, the opportunities for investment in Nigeria’s ICT sector are numerous in a wide range of trends such as cloud computing, mobile web services, smart grids, social media, payment systems and fintech, ecommerce, online learning, biometrics, eGovernment, eHealth and many more.

 

INVESTMENT IN MANUFACTURING

 Having the largest market in Africa, Nigeria’s manufacturing industry is on a growth trajectory due to various government interventions/programmes implemented in recent years. The sub-sector’s capacity utilization has gained a 20% increase in average growth rate between the 1990s and recent years and its contribution to National GDP has also grown steadily to an annual average of 9% within the past five years.

According to the Nigeria’s Industrialization Plan, the Manufacturing sector in Nigeria is geared towards accelerating industrial capacity to increase the sector’s contribution to GDP. The Federal Government of Nigeria hopes to generate an additional US$20 billion to US$30 billion in manufacturing revenues over the next 3 to 5 years and substitute imports and diversify exports, diversify the economy from petroleum, create jobs and generate wealth. Foreign investors are welcome to participate wholly or in partnership with local companies in manufacturing or industrial projects like Food processing – Fruits, vegetable oils, oil seeds, roots and tubers processing, Cereal and grain milling; Sugar production, Confectionaries and beverages, ceramic and glass production, solid mineral processing and so on.

According to the Nigeria Investment Promotion Commission (NIPC), Lagos and its surroundings are home to about 60% of Nigeria’s industrial activities. Other key industrial centers are Kano, Aba, Ibadan and Kaduna. Nigeria’s most important manufacturing industries include beverages, cement, textiles and chemicals.

Textile Manufacturing

The garment and footwear industry accounts for about 2% of the national GDP. It once ranked as the second largest in Africa with over 250 factories operating above 50% installed capacity. At its peak, the Nigerian Textile industry employed about 25% of the total manufacturing workforce and averaged an annual growth of 67% mostly attributed to locally grown cotton. The industry is currently estimated to be able to produce about 1.4 billion different pieces of textile products. With huge demand for clothing by a fast-growing population, the industry has been unable to meet domestic demand for African prints, shirting, bed sheets, furnishing fabrics towels, embroidery lace, garments, table and bed linen, guinea brocades, wax prints, java prints, jutes, fishing nets, among many other textile products. To this end, several Government initiatives, such as the N100bn Textile and Garment (CTG) Intervention Fund managed and disbursed by the Bank of Industry (BOI), are in place to revamp the industry, attract investments and safe guard it from extraneous factors

Cement Manufacturing

Cement manufacturing has grown to be an important activity in the economy with Nigeria becoming home to the world’s largest emerging cement companies. The demand for cement is seasonal in nature, and it is expected to continue to grow most especially as there exists a huge housing deficit and the increasing demand to use cement in road construction. As at the year 2020, The industry is largely dominated by two firms controlling over 80% of the domestic market. However, the industry’s prospects for growth has attracted investments from both domestic investors and foreign multinational companies. Over the last five year, there has been aggressive drive towards the modernization and expansion of cement plants which have seen the capacity of the industry multiplied, currently at over 45million tones, and efficiency improved. With this in progress, the industry has begun expanding to neigbouring countries like Cameroun and began export to neighbouring West African markets putting Nigeria on the brink of meeting its target of local demand and making the country a net exporter of cement.

Chemical Food Processing

The food processing industry is another vastly developing industry in the Nigerian manufacturing sub-sector. The industry has grown at an average of 3% over the last 5 years contributing an annual average of 4% to the GDP, employing about 5% of the local workforce. Although, the industry is composed of mainly small and medium enterprises, there is a consistent upsurge of new entrants of multinational food companies and an aggressive expansion of existing operations geared to meet the demand of the local market. This has been motivated by the apparent expansion of the middle-class armed with rising incomes and growing awareness for food safety and dietary quality prompting demand for low-carbohydrate, low-fat, and even sugar-free food and beverages. Some of the new investments on the horizon includes Dangote Group’s $800 million investment in dairy production, consortium of Vicampro Farm, BlackPace and Kiremko planned investment in potato processing factory in Plateau and Kaduna expected to cost about US $ 45 million with a processing capacity of 30,000 to 40,000 tons, the plant will be the largest in West Africa, and a host of large bakeries, biscuit and waffle factories are increasingly being built. These investments would complement existing investments by Cadbury Nigeria, Unilever Nigeria, De-United Foods Industries, FrieslandCampina WAMCO Nigeria, and many more. Despite the increasing investments by local processors and continued upsurge of multinational companies into the industry, bulk of the intermediate and processed inputs utilized are still imported. The increasing importation of food, beverage and packaging technology, 15% in 2017 alone, there is an air of relief that most of these imports would be soon be available locally, more so that the basic raw materials, agricultural produce such as cocoa, peanuts, palm oil, corn, rice, sorghum, millet, cassava, yams, rubber, cattle, fish among many others, are available locally.  

Brewing Industry

Nigeria has the second largest beer industry in Africa, next to South Africa. Despite the global downturn in beer consumption, Nigeria’s market continues to thrive. The industry is expected to continue to grow at about 23% over the next few years remaining a vital component of the manufacturing sector of Nigeria. The landscape of the industry is dotted by major multinational brewing companies jostling for position in the domestic brewing market. The market is regional in nature with local brands holding sway in their respective regions. At the national level, the industry has moved from being a duopoly market to an oligopoly one with Nigerian Breweries Plc (NB Plc) 61%, Guinness Nigeria 27%, and Consolidated Breweries 10% being the major market shareholders. South African Breweries Miller (SABM), a more recent entrant to the market, continues to grow its influence in the market; NB Plc, one of the local subsidiaries of the global brand Heineken, has the largest capacity and coverage, with about 8 breweries located across the country and estimated to have total annual capacity of 13.5mn hl. Guinness, owned by Diageo, operates 4 breweries with an estimated total annual of 7.5mn hl. SABM has an estimated capacity of 1.8mn hl built mainly through the acquisition of Pabod Breweries in Port Harcourt, International Breweries in Ilesa and Onitsha in a strategic drive to control regional markets. Despite this capacity coupled with other smaller plants, there is still a gap demand of about 53m hl due largely to the growing population with its attendant vibrant youth and growing middle class.  

Investment Incentives

In addition to the general investment incentives with tax holidays and relief, the following are applicable to the Manufacturing sector.

The Raw Materials Research and Development Council provides grants for research and development that leads to the greater use of Nigerian raw materials in domestic industry.

Zero interest on loans for the fabrication of any local plant and machinery

 

INVESTMENT IN OIL AND GAS

 

Oil, natural gas and related products account for 90% of Nigeria’s total export volume and more than 80% of the government revenues. Nigeria is Africa’s largest producer of petroleum and the 6th largest in the world, with an average capacity of 2.5 million barrels of crude oil daily. As a member of OPEC, Nigeria also ranks as the world’s 8th largest exporter and has the largest natural gas reserves in Africa, ranking 7th position globally.

However, the local refining capacity is only 24% which creates a huge gap between the demand for refined petroleum products and local supply. Towards bridging this gap, the downstream industry has been opened to private sector participation and foreign investments and with the President’s signing of the Petroleum Industrial Bill (PIB) into law as the new Petroleum Industrial Act (PIA) in August 2021, conditions have become much more favourable to foreign investors. By various government schemes and policies like better profit sharing, Nigeria’s oil and gas remains one of the most lucrative sectors to invest in. For this reason, Oil giants like Total, Chevron, ExxonMobil, Elf, Shell, ConocoPhillips, Eni and China’s CNOOC all have operations in Nigeria.

According to the Nigeria Investment Promotion Commission, the country has attained an annual average production of about 2,000 billion standard cubic feet (BSCF) of natural gas; of which about 70% is utilized while 30% is still being flared annually. Towards ensuring zero percent gas flaring, the Federal Government has embarked on comprehensive and integrated gas utilization master plan/programmes which includes the development of Liquefied Natural Gas (LNG) plants and Independent Power Plants (IPP). Consequently, domestic gas consumption has continued to expand. Major gas grid infrastructure is being built to enable flexible delivery structure of high-quality gas across major industrial plants and homes.

The state-owned Nigerian National Petroleum Corporation (NNPC) which has become much more liberalized under the new PIA 2021, accounts for more than 50% of oil production and over 40% of gas supply. The local refining capacity is put at 24%. This creates a huge gap between the demand for refined petroleum products and local supply. Towards bridging this gap, the downstream industry has been opened to private sector participation. The Nigerian oil & gas sector is regulated by the Department of Petroleum Resources (DPR). The country is a member of the Organization of Petroleum Exporting Countries (OPEC). Major international oil companies (IOC) currently operating in the country include, but not limited to: Total, Chevron, ExxonMobil, Elf, Shell, ConocoPhillips and Eni. Nigeria signed an accord with some of the world’s largest oil companies that could unlock billions of dollars of investment in an offshore oil field, and there is room for more.

Investment Incentives

In addition to the general investment incentives, graduated royalty rates approved for oil companies are as follows:

• On shore production – 20%
• Production in territorial waters and continental shelf areas up to 100 meters Water depth – 18.5%
• Production in territorial waters of continental shelf areas beyond 100 meters – 16.67%

INVESTMENT IN THE POWER SECTOR

 

The Energy sector is one of the most exciting due to the room it leaves for a variety of possible innovations and creativity in the entire energy value chain ranging from power generation to conversation to storage to distribution to meter reading to billing etc. Currently, Nigeria’s largest power source is the post-colonial Kainji hydroelectric power dam with a compromised capacity of 740MW out of Nigeria’s total supply of almost 5,000MW attained as of 2016.

With a fast-growing population and rapid industrialization of the country, the current power capacity is said to be only 12% of what the country needs. In order to bridge the huge gap between demand and supply of energy in the country, the Federal Government had enacted the Electric Power Sector Reform Act (EPSRA) 2005 which liberalized, diversified and commercialized the energy sector. As a result, there has been an increased private sector involvement and a healthy diversity of solutions including renewable energy resources including hydro-electricity, solar, wind and biomass energy. However, the biggest challenge for investors has been to keep tariffs as low as the Nigerian consumers are already used to. The Federal Government has already put in place tax holidays, investment incentives and other protections for foreign direct investors in this sector. 

Clean and renewable energy is highly encouraged by the Government as it will reduce the country’s dependence on fossil fuels and provide an economically stable source of energy to the power generation mix. The major challenge with the energy sector is keeping the tariffs low within the supply chain to ultimately achieve an affordable price to the end-consumer.  Although the Government enforced the embedded generation to enables energy producers supply power to distribution companies on mutually agreed terms of tariff, investors are advised to critically examine the cost dynamics peculiar to this sector and apply long-term ROI for success.

Nigeria Investment Incentives

The Federal Government of Nigeria has adopted rigorous efforts to ensure that areas of concern for Foreign investors such as redtapes, incorporation process, taxation and visa policies are relaxed to the fullest extent, to open up Nigeria’s economy to fair competition and prosperity. Consequently, in line with the NIPC Act 22, the Nigerian Investment Promotion Commission regularly consults with key Government agencies to negotiate specific incentive packages in identified strategic areas of investment interest.

These consultations have led to an increasingly attractive business environment with tax holidays for pioneer companies producing exportable goods, newly established industries in manufacturing or expansion of production in sectors vital to the economy. The Government also grants non-tax incentives to non-pioneer firms in addition to industry-specific incentives which are described on the specific page of each investment industry, and a number of general incentives as outlined below.

Favourable Tax Policies

Tax based incentives are implemented under different acts and in different forms e.g. holidays/breaks, reliefs, credits, exemptions, allowances etc. Generally, without considering any incentives, the taxes are comparatively low in Nigeria, with standard Companies income tax rate at 20 – 30% depending on the industry, Education cess tax at 2% for both company and income, Withholding tax of 5%. For foreign direct investors, the 10% withholding tax on dividends is the final tax on dividends. Value added tax (VAT) chargeable on goods and services is at 5%. The Capital Gains Tax rate is 10%, and shares in companies are generally exempt from capital gains tax. Stamp duty is chargeable on various documents at various flat and ad valorem rates, depending on the nature of the instrument, up to a maximum of 2% of the value involved. For details on various tax incentives,

Nigeria Investment Tax Policy

The main highlights of Nigeria’s favourable tax policies are the tax holiday and tax allowance incentives for investors. For example, tax holidays for up to five years may be granted to investors in the manufacturing and gas utilization sectors. Also, Companies operating in Nigeria’s export processing zones are exempted from all taxes including both import and export duties. Some other companies are also exempted from the VAT. Furthermore, import duty relief may be obtained on certain machinery, and there are tax allowances for using local raw materials in manufacturing, being a labour-incentive (and therefore employment-generating) business, expenditure on training, infrastructure, research and development and in economically disadvantaged areas. See others by NIPC highlighted below:

Personal Income Tax Act

Administered by the Federal Inland Revenue Service and State Boards of Internal Revenue Service, the following taxes are favourable to investors.

Tax credit allowable against tax payable on income derived from outside Nigeria

Section 11 PITA: where a resident derives income from a source outside Nigeria and the income is brought into Nigeria through Government approved channels, he shall be allowed a tax credit against the tax payable by him, but the tax credit shall not exceed the proportion of his total tax for the year of assessment which that income derived from outside and brought into Nigeria bears to his aggregate income chargeable to tax in Nigeria.

Consolidated relief allowance

Section 33 (1) PITA: allows a Consolidated Relief Allowance of N200,000 subject to a minimum tax of 1% of gross income whichever is higher, with the balance taxable in accordance with the Income table in the Sixth schedule to this Act.

Returns not to be filed where income is N30,000 or less

Section 43 PITA: no return of income shall be filed by a person whose only source of income in any year of assessment is employment in which he earns N30,000 or less from that source.

Income exempted

Section 19(1) PITA specifies several incomes that are exempted from tax, in the Third Schedule to the Act.

Exemption of dividend from tax

The Third Schedule PITA lists incomes exempted from Personal Income Tax Paragraph 25 of the Third Schedule PITA exempts some dividends from tax:

• Dividends paid to a person by a company incorporated in Nigeria, provided that:
  • • the equity participation of the  person in the company paying the  dividends is either wholly paid for in foreign currency or by assets brought into Nigeria between 1 January 1987 and 31 December 1992; and
    • the person to whom the dividends are paid owns not less than 10 per cent of the equity share capital of the company.
• For the purpose of the exemption referred to in 1), the dividend tax-free period shall commence from the year of assessment following the year in which the new capital is brought into Nigeria for the real purpose of the trade or business in Nigeria of the company paying the dividends and shall continue for five years if the company paying the dividends is engaged in agricultural production within Nigeria or processing of Nigerian agricultural products produced within Nigeria or production of petrochemicals or liquefied natural gas, and in any other case, the tax-free period shall be limited to three years.

 

Capital Gains Tax Act

General Capital Gains Tax is at the rate of 10% as administered by the Federal Inland Revenue Service.

Exemption on retirement benefits schemes

Section 28 CGTA: a gain shall not be a chargeable gain if income is accrued:

• as part of any superannuation fund (retirement or benefits fund) approved under Section 20 PITA;
• as part of any national provident fund or other retirement schemes established under the provisions of any Act or enactments for employees throughout Nigeria;
• of any of those funds that is exempt under paragraph (w) of the Third Schedule of PITA and;
• as a result of the disposal of a right to, or to any sum payable out of any superannuation fund.

Exemption of gains accruing on securities, stocks, shares

Section 30 CGTA: gains accrued to a person from disposal by him of Nigerian Government securities, stocks and shares shall not be chargeable gains.

Tax exemption on gain arising from take-overs, absorption or merger

Section 32 CGTA: gains arising from acquisition of shares either taken over, absorbed or merged by another company as a result of which the acquired company loses its identity as a limited company, provided no cash was exchanged in respect of the shares.

Tax exemption on proceeds re-invested

Section 33 CGTA: gains accruing to unit holders in a trust in respect of disposal of securities, shall not be chargeable on tax provided the proceeds are re-invested.

Double taxation relief

Section 41 CGTA: Any arrangement set out in an order made under Section 38 PITA and Section 45 CITA so far as they provide (in whatever terms) for relief from tax chargeable in Nigeria on capital gains by virtue of this section, have effect in relation to CGT.

 

IDITRA Pioneer Status Incentive

Under the Industrial Development Income Tax Relief Act (IDITRA), companies engaged in industries/products approved as ‘pioneer industries/products’ shall be

• granted income tax relief for a period of three years, which can be extended for a period of one year and thereafter another one year, or for one period of two years (Section 10(2)(a)(b) IDITRA);
• exempted from paying tax on dividends paid by the pioneer company during the pioneer period to the extent that they are paid out of income exempted from tax (Section 17(3) IDITRA); and
• the loss incurred during the tax relief period is also deemed to be incurred on the first day following the expiration of the tax relief period and can be carried forward to offset profits after the tax-exempt period.

Corporate Income Tax

Interest on bonds and short-term securities, and proceeds of the disposal of Government and corporate securities CIT (Exemption of Bonds and Short-Term Government Securities) Order 2011 provides tax exemption for interest earned on:

• short term Federal Government securities such as treasury bills and promissory notes
• bonds issued by Federal, State and Local Government and their agencies
• bonds issued by corporate bodies including supra-nationals

for a period of 10 years, with the exception of bonds issued by the Federal Government, which shall continue to enjoy such exempt from tax effective from 2011.

Exemption of interest on loan

Section 11(2) CITA provides exemption from tax interest on any loan granted by a bank to a company engaged in:

• agricultural trade or business; or
• the fabrication of any local plant and machinery; or
• providing working capital for any cottage industry.

Exemption of profits

Section 23(1) CITA: exempts the profits of the following companies from tax:

• a statutory or registered friendly society, in so far as such profits are not derived from a trade or business carried on by such society;
• a co-operative society registered under any enactment or law relating to co-operative societies;
• engaged in ecclesiastical, charitable or educational activities of a public character;
• formed for the purpose of promoting sporting activities;
• being a trade union registered under the Trade Unions Act;
• dividend distributed by Unit Trust;
• a body corporate established by or under any Local Government Law or Edict in force in any State in Nigeria;
• body corporate being a purchasing authority established by an enactment and empowered to acquire any commodity for export from Nigeria from the purchase and sale (whether for the purposes of export or otherwise) of that commodity;
• company or any corporation established by the law of a State for the purpose of fostering the economic development of that State.
• a company other than a Nigerian company which, but for this paragraph, would be chargeable to tax by reason solely of their being brought into or received in Nigeria;
• dividend, interest, rent, or royalty derived by a company from a country outside Nigeria and brought into Nigeria through Government approved channels;
• the interest on deposit accounts of a foreign non-resident company;
• the interest on foreign currency domiciliary account in Nigeria;
• dividend received from small companies in the manufacturing sector in the first five years of their operation;
• dividend received from investments in wholly export-oriented businesses;
• any Nigerian company in respect of goods exported from Nigeria;
• a company whose supplies are exclusively inputs to the manufacturing of products for export; and
• a company established within an export processing zone or free trade zone.

Deduction for research and development

Section 26 CITA provides for the purpose of ascertaining the profit or loss of any company for any period from any source chargeable with tax under this Act, there shall be a deduction, not exceeding an amount which is equal to 10% of the total profits of that company for that year as ascertained before any deduction is made under this section and Section 25 of CITA.

Companies and other organizations engaged in research and development activities for commercialization shall be allowed 20% investment tax credit on their qualifying expenditure for that purpose.

Reconstruction investment allowance

Section 32 CITA makes available to a company an investment allowance of 10% of the actual expenditure incurred on plant and equipment, in addition to an initial allowance under the Second Schedule of the Act.

Rural investment allowance

For companies not already benefiting from Section 32 and located at least 20 kilometers away from government facilities, Section 34 CITA provides that where a company incurs capital expenditure on the provision of facilities such as electricity, water or tarred road for the purpose of a trade or business, such company shall enjoy an additional allowance under the Second Schedule of CITA at the appropriate rate administered by the Federal Inland Revenue Service as follows: No facilities at all: 100%, No water: 30%, No electricity: 50%, No tarred road: 15%.

Gas utilization: Investment allowance

For companies in gas utilization (downstream operations), an additional investment allowance of 35% (which shall not reduce the value of the asset) is allowed, as an alternative to the initial tax-free period granted under Section 39(b) CITA to a company which does not claim incentive. i.e A company which claims the incentive shall not also claim the tax-free dividend during the tax-free period.

Gas utilization: Accelerated capital allowance

Section 39(c) CITA provides for accelerated capital allowance after the tax-free period for companies in gas utilization (downstream operations), administered by the Federal Inland Revenue Service as follows:

1. an annual allowance of 90% with 10% retention, for investment in plant and machinery.
2. an additional investment allowance of 15% which shall not reduce the value of the asset.

Gas utilization: Tax-free dividend

For investment of business in foreign currency or the introduction of imported plant and machinery during the period that is not less than 30% of the equity share capital of the company, Section 39(d) CITA provides for tax-free dividend during the tax-free period for companies in gas utilization (downstream operations).

Gas utilization: Interest deduction

Subject to obtaining prior approval of the Minister of Petroleum Resources for such loan, Section 39(e) CITA provides that interest payable on any loan obtained for a gas project shall be deductible, as administered by the Federal Inland Revenue Service.

Investment tax relief

For companies located at least 20 kilometers away from government facilities and incurring annual expenditure on such relevant facilities, Sections 40 CITA provides that where a company has incurred an expenditure on electricity, water, tarred road or telephone for the purpose of a trade or business carried on by the company, the company shall be allowed an “investment tax relief” at the following rates of expenditure: No facilities at all – 100%, No water – 30%, No electricity – 50%, No tarred road – 15%. A company shall not be allowed to claim the investment tax relief for more than 3 years; and the relief shall not be available to a company already granted the Pioneer Status.

20% Income tax rate for companies with turnover less than ₦1 million

Section 40(6) CITA provides for a lower rate of tax of 20% payable by companies in the preferred sector of the economy such as agriculture, manufacturing, solid minerals or wholly export trade for the first 5 years of commencement of business, where the turnover is less than ₦1 million as administered by the Federal Inland Revenue Service.

Value Added Tax Act

Applicable rate is 5% as administered by the Federal Inland Revenue Service.

Exemption from value added tax

Sections 2 & 3 First Schedule VAT Act list the goods and services exempted from VAT, as administered by the Federal Inland Revenue Service:

Part 1. Goods

• All medical and pharmaceutical products;
• Basic food items;
• Books and educational materials;
• Baby products;
• Fertilizer, locally produced agricultural and veterinary medicine, farming machinery and farming transportation equipment;
• All exports;
• Plants and machinery imported for use in Export Processing Zones;
• Plants, machinery and equipment purchased for utilization in gas down-stream petroleum operations; and
• Tractors, ploughs and agricultural equipment and implements purchased for agricultural purposes.
• Medical services;
• Services rendered by Community Banks, Peoples’ Bank and Mortgage institutions;
• Plays and performances conducted by educational institutions as part of learning; and
• All exported services

 Exemption of commissions on stock exchange transactions

Part II First Schedule VAT Act is modified in VAT (Exemption of Commissions on Stock Exchange Transactions) Order, 2014. The order shall be in force for a period of 5 years, as administered by the Federal Inland Revenue Service.

There is an exemption from VAT on commissions from the following:

• earned on traded value of shares;
• payable to Securities and Exchange Commission;
• payable to Nigerian Stock Exchange; and
• payable to the Central Securities Clearing System on stocks.

Zero Interest Loans

Small and medium-scale industries are eligible for loans from the Bank of industry and other development banks. These loans are mostly available to Nigerian business owners but there are no restrictions in situations of foreign partnership, industries favoured in the Zero Interest Loan policy:

• agricultural trade or business; or
• the fabrication of any local plant and machinery; or
• providing working capital for any cottage industry.

Remittances

The archaic exchange control laws have been repealed by the Government due to cumbersomeness. Foreign investors are now free to bring in investment capital and they are free to repatriate both profits, income and capital proceeds on such capital. Monies brought in or taken out may be so dealt with under either of two schemes:

Debt Conversion Programme

the Federal Government of Nigeria established the Debt Conversion Programme (DCP) in 1988 to create an attractive avenue for the importation and repatriation of capital, and to encourage the creation and development of export-oriented industries thereby diversifying the export base of the Nigerian economy. This program overseen by the Debt Conversion Committee (DCC) allows foreign companies to obtain an enhanced exchange rate when they are injecting new equity into a production project that has been approved by the Central Bank of Nigeria (CBN).

Under this scheme the foreign investor buys Nigeria debt stock with hard currency and then sells the stock to the CBN in return for naira to be invested in Nigeria. The CBN benefits by getting Nigeria’s foreign debt stock reduced, and the foreign investor gets an exchange rate better than other programs.

Inter-bank Foreign Exchange Market

The Nigerian IFEM evolved from Second-tier Foreign Exchange Market (SFEM) 1986, to the unified official market in 1987, the autonomous Foreign Exchange Market (AFEM) in 1995, and now the Inter-bank Foreign Exchange Market (IFEM) in 1999. However, the purpose has remained a relatively free market in which both the Central Bank of Nigeria (CBN) and the Authorized Dealers participate as traders. For details visit CBN website http://www.cbn.gov.ng

Special Incentives

Section 22 NIPC Act empowers the NIPC to negotiate, in consultation with appropriate Government agencies, special incentives for strategic or major investments.

Free transferability of capital and returns

Section 24 NIPC Act provides that a foreign investor in an enterprise, to which the Act applies, shall be guaranteed unconditional transferability of funds through an authorized dealer in a freely convertible currency, of:

• dividends or profits (net of taxes) attributable to the investment;
• payments in respect of loan servicing where a foreign loan has been obtained; and
• the remittances of proceeds (net of all taxes), and other obligations in the case of sale or liquidation of the enterprise or any interest attributable to the investment.

Protection against nationalization and expropriation

Section 25 NIPC Act provides guarantees to investors against nationalization and expropriation. Where an acquisition is made in national interest or for public purpose, the investor shall be entitled to:

• payment of fair and adequate compensation;
• a right of access to courts for the determination of the investor’s interest or amount of compensation to which the investor is entitled; and
• payment of compensation without undue delay, and authorization for its repatriation in convertible currency, where applicable.

Recourse to international arbitration

Section 26 NIPC Act grants a foreign investor the option of recourse to international arbitration machinery for the settlement of disputes. Where there is disagreement on the method of dispute settlement to be adopted, the International Centre for Settlement of Investment Disputes Rules shall apply.

 

Free Trade Zone (FTZ)

Free Trade Zones like the Calabar FTZ, Tinapa Free Zone and Tourism Resort, Kano FTZ, Lekki FTZ, Onne Oil and Gas Export Free Zone, Olokola FTZ, etc were designed to attract foreign direct investment, increase foreign exchange earnings, promote technology transfer and develop export-oriented industries in Nigeria. The Administering body, The Nigerian Export Processing Zone Authority (NEPZA) was established by the Nigeria Free Trade Zone Act 1992 to grant all approvals for operators within the FTZ to the exclusion of other government bodies and agencies.

There are currently 33 FTZs with 15 operational and 18 under construction. Foreign investors can set up businesses directly in FTZs without going through the process of incorporating a company in the customs territory. Registered companies may also apply as a separate entity to operate in an FTZ, that would append the company’s name with suffix FZE (Free Zone Enterprise) to gain the FTZ benefits.

 FTZ incentives:

• Exemption from all Federal, State and Local Government Taxes, Rates, and Levies
• Duty-free importation of capital goods, machinery/components, spare parts, raw materials and consumable items in the zones.
• 100% foreign ownership of investments.
• 100% repatriation of capital, profits and dividends.
• Waiver of all imports and export licenses.
• One-stop approvals for permits, operating license and incorporation papers.
• Permission to sell 100% of goods into the domestic market (in which case applicable customs duty on imported raw materials shall apply).
• For prohibited items in the custom territory, free zone goods are allowed for sale provided such goods meet the requirement of up to 35% domestic value addition.
• Rent-free land during the first 6 months of construction (for government owned zones).

 

Other Benefits

• Large and competitive market with huge and unmet demand.
• A growing and increasingly sophisticated middle class with tech-savvy young adults.
• Large and flexible workforce.
• An entrepreneurial population with innovative, creative and highly resilient.

100% Foreign Ownership

Sections 17 & 18 NIPC Act liberalize ownership of investment by any national in any enterprise except enterprises with activities listed on the ‘negative list’ which are prohibited for both foreign and Nigerian investors. The ‘negative list’ includes:

• production of arms, ammunition, etc.;
• production of and dealing in narcotic drugs and psychotropic substances;
• production of military and para-military wears and accoutrement, including those of the Police and the Customs, Immigration and Prison Services; and
• such other items as the Federal Executive Council may, from time to time, determine.

Foreign investor is not required to partner with local company, especially in the Free Trade Zones. However, it is highly advisable to have Nigerian representative(s) when dealing with the government.

 

AfCFTA Projections

The largest single trading block in the world is in the making. full implementation of the Africa Continental Free Trade Agreement is projected to drive investment interest in African countries that are the most suitable locations for production and investment. By virtue of her labour force, production capacity and market size, Nigeria is already the powerhouse among a hand-full of African countries that will eventually become the main players on the block of 54 countries all land-linked. Even in this positive standing, the government of Nigeria is not relenting in its efforts to improve Nigeria’s attractiveness as a destination and Nigeria’s competitiveness for production

The Companies and Allied Matters (CAMA) 2020 and Finance Act 2019 and 2020 have improvements aimed at helping small businesses better survive and thrive in the AfCFTA environment, Government engagements with the private sector have been with the organized private sector. The outcome of this alliance is that Industries in Nigeria will be able to enjoy the following benefits of the AfCFTA. 

• Free capital movement within the bloc
• Access to bigger market within the African Bloc
• Tax-free supply of raw materials
• Tax-Free exports to the bloc
• Room for easier expansion and growth
• Gains from improved intercontinental infrastructure as an impact of the AfCFTA implementation
• Healthy competition and quality improvements
• Bigger labour market
• Easier attainable partnerships across borders, allowing for a wider network of supply and distribution chain

 

Visa Incentives

In addition to the Special Business Visas like the multiple entry F4C (Frequently Travelled Executives Visa) with 5-year validity, The Nigeria Visa Policy 2020 introduced investor visas for the first time including Permanent Residence Visas like N3A for Small Scale Enterprise Investors, N3B for Medium Scale Enterprise Investors, N3C for Large Scale Corporation Investors, N3D for Ultra Large Scale Corporation Investors, and N3E for Oil & Gas and Power Sector investors. See details of these visas under the Business / Investor Visa Section.

Nigeria Priority Investment Industries

Nigeria is one of the fastest developing countries in the world, one of the resource-richest countries in the world, the most strategically situated country in Africa, and the largest market in Africa with a population of over 205 million people and a rapidly growing middle-class. With the Africa Continental Free Trade Agreement (AfCFTA) in the making soon to be the largest single trading block in the world and with Nigeria being one of the major players, Nigeria’s economy is projected by experts to be enroute to top 10 economies of the world by 2050, and possibly clocking a GDP of over $6 trillion.

The driving forces behind this rapid growth are the vibrant industries all of which have been wholly privatized to attract and boost local and foreign investments. As a result of favourable government policies and incentives, the Ease of Doing Business in Nigeria has steadily improved, attracting Foreign Direct Investments (FDI) from countries like China, the United Kingdom, France, Canada and the United States. The following are the most attractive industries to invest in Nigeria, due to existing favourable government policies in way of tax holidays, special incentives and privileges as well as protections for foreign investors.

Agriculture

This covers all related activities including Commercial Farming, Livestock, Aquaculture, Hydroponics and others. Among numerous other advantages, Agro-industrial ventures benefit from a five-year tax holiday, an agricultural credit scheme guaranteed by the Central Bank of Nigeria (CBN), subsidized fertilizers and zero import duties on raw materials used to make livestock feed. According to the Nigeria Investment Promotion Commission (NIPC), the Agricultural sector contributes 25% of Nigeria’s Gross Domestic Product (GDP) and accounts for 48% of the labour force. The sector’s growth rate over the last 5 years averaged 4%. Crop production dominates the sector, accounting for 22.6% of GDP alongside livestock (1.7%), fisheries (0.5%) and forestry (0.3%). The Government’s Agriculture Promotion Policy 2016-2020 had achieved significant progress in creating the conducive commercial environment to meet domestic food demands, generate exports, and attract foreign investment, among other merits.

Industry

Nigeria is a natural location for a variety of industrial activities due to the availability of natural resources, affordable labour cost and large market. Its manufacturing sector is reemerging due largely to the improving performance of the consumer and household goods industries and growth of the middle-class. Nigeria produces a large proportion of goods and services for the West African subcontinent. The industry sector contributes an annual average of 23% of the GDP. The major activities include oil & gas (9%), manufacturing (7%), and construction (5%). The sector is strategic to government’s objective of diversifying the economy in line with the Economic Recovery & Growth Plan.

Petroleum

Oil, natural gas and related products account for 90% of Nigeria’s total export volume and more than 80% of the government revenues. Nigeria is Africa’s largest producer of petroleum and the 6th largest in the world, with an average capacity of 2.5 million barrels of crude oil daily. As a member of OPEC, Nigeria also ranks as the world’s 8th largest exporter and has the largest natural gas reserves in Africa, ranking 7th position globally. However, the local refining capacity is only 24% which creates a huge gap between the demand for refined petroleum products and local supply. Towards bridging this gap, the downstream industry has been opened to private sector participation and foreign investments and with the passing of the new PIA (Petroleum Industrial Act) in August 2021, conditions have become much more favourable to foreign investors. By various government schemes and new policies like better profit sharing, Nigeria’s oil and gas remains one of the most lucrative sectors to invest in. For this reason, Oil giants like Total, Chevron, ExxonMobil, Elf, Shell, ConocoPhillips, Eni and China’s CNOOC all maintain operations in Nigeria.  

Manufacturing

The Manufacturing sector in Nigeria is geared towards accelerating industrial capacity to increase the sector’s contribution to GDP. The Government’s target is to generate an additional US$20 to US$30 billion in manufacturing revenues over the next 3 to 5 years and substitute imports and diversify exports, diversify the economy from petroleum, create jobs and generate wealth. Foreign investors are welcome to take part wholly or jointly in manufacturing or industrial projects like Food processing – Fruits, vegetable oils, oil seeds, roots and tubers processing, Cereal and grain milling; Sugar production, Confectionaries and beverages, ceramic and glass production, solid mineral processing and so on.

Construction

After experiencing a 7.5% decline in 2020 due to the economic effects of Covid-19, Nigeria’s construction is expected to make a 4% recovery growth in 2021. With the steady expansion of the real estate market and state support in the infrastructure and energy sector, Nigeria’s construction market is due to increase 3.2% annually between 2022 and 2025. Favourable Government policies and programs like the $2.7bn Infra-Co fund backed by the Central Bank of Nigeria (CBN), the Nigerian Sovereign Investment Authority (NSIA) and the Africa Finance Corporation Companies (AFCC); has attracted a investors into the sub-sector and boosted the confidence of existing players like Julius Berger, China Civil Engineering Construction Company (CCECC), Reynolds and Arab Contractors. The 2021 Appropriation Bill for Covid-19 economic impact recovery is also a step in the right direction for investors.

Mining

Mining is a growing and thriving sector accounting for 0.3% of national employment, 0.02% of exports and about $1.4 billion to Nigeria’s GDP, according to a 2017 report by the Federal Ministry of Mines and Steel Development. With untapped minerals like Baryte, Limestone, Gypsum, Lead/Zinc, Gold and more, Nigeria is literally a goldmine waiting to be explored. Despite its comparatively low production and output, the Mining sector thrives within a well defined regulatory structure supported by active professional bodies and agencies that are increasing shaping policies, creating programs and incentives favourable to investors in order to unleash this huge economic potential of this sector.

Energy

The Energy sector is one of the most exciting due to the room it leaves for a variety of possible innovations and creativity in the entire energy value chain ranging from power generation to conversion to storage to distribution to meter reading to billing etc. Currently, Nigeria’s largest power source is the post-colonial Kainji hydroelectric power dam with a compromised capacity of 740MW out of Nigeria’s total supply of almost 5,000MW attained as of 2016. With a fast-growing population and rapid industrialization of the country, the current power capacity is said to be only 12% of what the country needs. In order to bridge the huge gap between demand and supply of energy in the country, the Federal Government had liberalized, diversified and commercialized the energy sector and also put in place tax holidays, investment incentives and other protections for foreign direct investors in this sector.

Services

The Nigerian services sector has remained resilient amidst hard-hitting economic circumstances. The strength of the sector has hinged on its consumer-facing nature which have seen it grow into a significant economic force. Over the last decade, the sector has met pent-up consumer demand and served a fast-growing middle class. Buoyed by government policies and increased private investments, growth in the sector has driven the diversification of the economy.

Trade Services

Due to a growing generation of Nigerian consumers, wholesale and retail sales (trade services) has become the second largest sectoral contributor to Nigeria’s GDP, 16.4% in 2018 with an estimated market size of US$109 billion. With such huge market size, Nigeria one of the most attractive investment market for retailers in Sub-Saharan Africa, largely attributed to a growing middle class. A wide range of foreign investors, including South Africa’s retail giants – Shoprite and Pick n Pay, the Dutch retailer SPAR, and many more operate in Nigeria. These foreign investments are complemented by a host of domestic private investors who are building a chain of retail stores all across the country.

ICT Sub-sector

The information and communication sub-sector contributed 12% in 2018 and has grown at about 4% over the last 5 years making it the fastest growing and largest telecommunications industry in Africa. With a population size of about 206 million, less than 60% of whom are active internet users, the information, communications and technology (ICT) industry presents attractive investment opportunities. Through various electronic platforms, Nigeria’s ICT network has revolutionized business transactions by providing the highly mobile-technology-driven population seamless ability to bank, invest, purchase, distribute, communicate, and explore anytime and anywhere access to the internet is available. This trend has opened doors to investment in many aspects of ICT including hardware, software, network, apps and related services.

Financial Sector

Following wide and far-reaching reforms, the Nigerian financial and insurance industry has steadily evolved into a more diversified, stronger and more reliable industry equipped to stimulate and support economic growth and sustainable industrial development of the country. According to the NIPC, the industry contributes about 3% to Nigeria’s GDP. With the launching of the new e-Naira digital currency in October 2021, Nigeria has enhanced the integration of electronic payments into our financial system, a step that has reduced the flow of physical cash in the economy and is gradually transforming the country into a cashless environment.

Banking industry

The banking industry is regulated and supervised by the Central Bank of Nigeria (CBN) under the Banks and Other Financial Institutions Act (BOFIA), CAP.B3, LFN, 2004. The industry has developed robustly driven by technology, with service offerings across various electronic platforms. As at December 2018, the industry’s customer deposits were in excess of N33 trillion (US$100 billion). By the end of the same period, the industry recorded over 200 million electronic transactions with a total value of over N9.5 trillion (US$31 billion) and has the potential for more, as about 40% of the population is still largely unbanked. This latent potential provides a huge opportunity for investors. For more information, please visit www.cbn.gov.ng

Insurance Industry

Nigeria’s insurance industry is one of the biggest in Africa, although its penetration is very low compared to its potential market size due largely to cultural and religious beliefs. Despite this, the industry remains resilient with total investment income in excess of N50 billion (US$160 million). With the implementation of the Pension Reform Act 2014 and the sustained implementation of tight monetary regime by the Central Bank of Nigeria, the insurance industry is expected to continue in the path of growth which is estimated to be at an annual average of 10% .The industry is regulated by National Insurance Commission (NAICOM) which is charged with the effective administration, supervision, regulation and control of the business of insurance in Nigeria. For more information, please visit www.naicom.gov.ng

Tourism and Hospitality

Tourism is one of the most important growing sectors of the Nigerian economy due to its inter-relativity to other sectors like Transportation, Infrastructure, Construction, Real Estate, ICT and the food industry. The government gave priority status to the Tourism Industry as far back as 1990 when the National Tourism Policy was launched, with the main policy thrust being to generate foreign exchange earnings, create employment opportunities, promote rural enterprises and national integration, among other things.

Nigeria’s Vision 2010 had set year 2005 as the nation’s year of tourism though not much was actualized due to crumbled infrastructure and the government’s poor implementation. However, today the tourism policies and programmes will now be aimed at making Nigeria the “Ultimate Tourism Destination in Africa” with a particular focus on boosting private sector involvement with investment incentives. Nigeria is blessed with a vibrant culture and multiple festivals with international marketing potentials, historical sites and naturally stunning sites ranging from tropical forests, magnificent waterfalls, beaches and climatic conditions with resort potentials conducive for holidaying.

Transport and Logistics

The Transportation, logistics and supply chain sub-sector is one of the fastest growing industries in Nigeria due to its depenancy on other fast-growing sectors like infrastructure construction, trade and eCommerce. With an estimated growth of $160 million annually, the sector is promising in every sense of the word. This is why the federal government has embarked on an aggressive campaign to transport and distribution network, workforce, road infrastructure, road congestion, road conditions, interstate highway access, vehicle taxes and fees, railroad access, water port access air cargo access, etc. to ensure innovation within the infrastructure development cycle of logistics and supply chain a well as attract local and foreign investments.

Education and Training

The rapid industrialization of Nigeria has seen a sharp increase in demand for skilled labour education. An estimated 80,000 Nigerians go abroad each year to obtain an education or some type of short-term training. That number, added to an existing 180 million people in the country within the learning age. There is an increasing demand for affordable education and training in specialized fields like ICT courses, Business, sciences and Foreign Languages.

Due to the global pandemic curbing young people’s ability to travel and study abroad, the market for quality education within the country is reaching an all-time high. With the exemption of profit taxes for education providers, as well as other incentives in place, the Government hopes to achieve home-trained labour-force for the growing industry and service sectors. 

Healthcare and medical

For thousands of years, Nigerians have traditionally believed in presentational healthcare through naturally healthy food and cleansing herbs. With this tradition carried into the modern era plus a plethora of other challenges, Nigeria has neither put allocated a significant portion of her budget nor dedicated as many programs to healthcare as she does for other sectors. However, the pandemic has seen Nigeria’s healthcare budget to over $1 billion in 2020 which is the highest in five years but still less than 5% of the total government budget for the year, falling short of the 15% United Nations requirement. Consequently, Nigeria’s health sector has an estimated deficit of $80 billion in health infrastructure gap and the annual budget for health sector in not sufficient to cater for the growing infrastructural needs of the health sector. As a result, the government encourages private sector involvement and foreign investments.