Trade And Investment

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.

Investment in Solid Minerals

Nigeria’s mining sector is diverse in mineral resources including high value commodities. 44 different types of minerals have been identified in more than 500 locations. In order to tap into the potential of this promising industry, Administrative and bureaucratic procedures have been scaled down to the minimum for the effectiveness of Government policies and programmes like the 2020 Solid Minerals Development Fund (SMDF) to which the government has expressed its readiness in furnishing $500-million to unlock $1.5-billion in third party investments and financing in the mining sector. Investors have easy access to working capital and other credit facilities. The government designated a number of strategic minerals that it believed had the potential to make a significant contribution to Nigeria’s economic development including Barite, Limestone and many more

Solid Mineral Deposits in Nigeria

Talc

Over 40 million tonnes deposits of talc have been identified in Niger, Osun, Kogi, Ogun and Kaduna states. The Raw Materials Research and Development Council (RMRDC)’s 3,000 tonnes per annum catalytic plant is the only talc plant in the country. The talc industry represents one of the most versatile sectors of the industrial minerals of the world. The exploitation of the vast deposits would therefore satisfy local demand and that for export.

Gypsum

Gypsum is an important input for the production of cement. It is also used for the production of Plaster of Paris (P.O.P) and classroom chalks. A strategy for large-scale mining of gypsum used in the cement industries is urgently required to sustain the existing plants and meet the future expansion. Currently, cement production is put at 8 million tonnes per annum while the national requirement is 9.6 million tonnes. About one billion tonnes of gypsum deposits are spread over many states in Nigeria.

Iron Ore

There are over 3 billion metric tonnes of iron ore in deposits found in Kogi, Enugu and Niger States as well as the Federal Capital Territory. Iron Ore is being mined at Itakpe in Kogi State and is already being beneficiated, up to 67 per cent of iron. The Aladja and Ajaokuta Steel complexes are ready for consumers of billets and other iron products for down-stream industries.

Lead/Zinc

An estimated 10 million tonnes of lead/zinc veins are spread over eight states of Nigeria. Proven reserves in three prospects in the east-central area are 5 million tonnes. 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 has specific gravity of about 4.3. Over 7.5 million tonnes 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.

Gold

There are proven reserves of both alluvial and primary gold in the schist belt of Nigeria located in the south-western part of the country. The deposits are mainly alluvial and are currently being exploited on a small scale. Private investors are invited to stake concessions on these primary deposits.

Bitumen

The occurrence of bitumen deposits in Nigeria is indicated at about 42 billion tonnes; almost twice the amount of existing reserves of crude petroleum. Analytical results suggest that this potential resource can be used directly as an asphalt binder. Most bitumen used for road construction in Nigeria is currently imported.

Coal

Nigerian coal is one of the most bituminous in the world owing to its low sulphur and ash content and therefore the most environment-friendly. There are nearly 3billion tonnes of indicated reserves in 17 identified coal fields and over 600 million tonnes of proven reserves.

Rock Salt

The national annual demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tonnes. A colossal amount of money is expended annually to import these chemicals by chemical and processing companies including tanneries and those in food and beverages, paper and pulp, bottling and oil sector. There are salt springs at Awe (Plateau State), Abakaliki and Uburu (Ebonyi State), while rock salt is available in Benue State. A total reserve of 1.5 million tonnes has been indicated, and further investigations are now being carried out by Government.

Gemstones

Nigeria is enriched in multiple coloured gemstones and is the most important producer of gems in West Africa. Gemstone mining has increased in various parts of Plateau, Kaduna and Bauchi states for years. Sapphires found in these areas are retrieved from secondary deposits of weathered alkali basalts. Good prospects exist in this area for viable investments. The government of Nigeria is seeking to expand its mining enterprise with the aid of international loans and investment.

Gemstones identified for commercial development include: Aquamarine, Tourmaline, Emerald, Sapphire, Garnet, Ruby; and other gems of less value like Topaz, Amethyst, Fluoride, Zircon, Morganite, Iolite, Kunzite and Flourspar which are among the world’s best. Good prospects exist in this area for viable investments.

Kaolin

An estimated reserve of 3 billion tonnes of good kaolinitic clay has been identified in many localities in Nigeria. Lift from page 4 and 5 of Local Sourcing of Raw Materials.

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.

Investment Incentives

In addition to the general incentives for foreign investors in Nigeria, here are some specific to the solid minerals and mining sector:

Deferred royalty payments.

Exemption from customs and import duties for plant, machinery and equipment for mining operations.

Possible capitalization of expenditure on exploration and surveys.

Extension of infrastructure such as roads and electricity to mining sites.

The holder of a mining lease shall be entitled to:

1. i) Depreciation or capital allowance of 75% of the certified true capital expenditure incurred in the year of investment and 50% in subsequent years
2. ii) Investment allowance of 5%

iii) Exemption from payment of customs & import duties

1. iv) Expatriate quota & resident permit for approved expatriate personnel

(g) 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 assets is disposed, 15% will be granted for replacement of an asset.

Investment in Tourism

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.

The Government’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.

A few well known ones are: Yankari Game Reserve where a wildlife diversity can be experienced, Cross River National Park – a haven of florafuna, waterfalls and naturally stunning landscape which stretches upto the boarder of Cameroun, Obudu Cattle Ranch, Kainji National Park, Tarkwa Bay, Coconut Beach, etc. Traditional African Festivals with potential for international sectors include the Argungu Fishing Festival, Eyo, Sharo, Igbo Yam Festival, Osun Festival and the All-in-one Calabar Carnival which now happens towards the end of December each year. Also bewildering to foreign travellers and explorers are historic sites like the Ancient Kano City Wall, Gidan Rumfa, Daura Emir Palace, Benin Wall; and traditional industrial processes like Kano Dye Pits and Leather Works, a few to mention.

However, many of these attractions are still largely untapped, undeveloped and remain as hidden tour gems enjoyed by a few. The shortage of modern infrastructure in some parts of the country has also contributed to the challenges in developing and popularizing these exotic places to global tourism standards. As a result of these impediments to tourism, the government has opened up to the private sector with favourable policies, programs and incentives to both local and foreign investors to revive the tourism potentials in the country. The diversity of Nigeria’s tourism resources along with economic liberalization policies provides investment opportunities in various areas as follows:

• Heritage/Cultural Tourism Resources Development of slave trade relics
• Establishment of museums and preservation of monuments
• Eco-tourism, including Wildlife Tourism Resources
• Development of hiking trails and Jeep tracks in the national parks
• Development of picnic and camping sites at strategic locations within the trail circuit system in the national parks
• Building of tourist lodges
• Building of reception centers at Natural/Physical Attractions
• Provision of cable bus system to take tourist through the very rugged but scenic terrain of the mountains especially in Kanyang, Obudu and Mambilla Plateau Construction of lodge cabins for expedition tourist and rangers.
• Establishment of hotels and resorts near waterfalls, springs, caves and temperate climate areas such as Obudu, jos and Mambila Plateau.

Beach Tourism potentials Establishment of boating and sport fishing facilities

• Development of water transportation Provision of educational facilities for water skiing and swimming
• Establishment of holiday resorts along the coasts.
• Development of Amusement parks, entertainment facilities and shopping services
• Development of arts and crafts which constitute symbol of the people’s cultural values and love for nature.

Investment Incentives

The provision of incentives in the 1990 National Tourism Policy were also to enhance private sector participation. Among many other general incentives applicable to all industries, The Nigerian Tourism Development Corporation’s policy states that 25% of tourism income in convertible currencies is exempted from taxation. Section 37 CITA (Corporate Income Tax Act) provides that such income must be generated from tourists and be put in a reserved fund to be utilized within 5 years for the building and expansion of new hotels, conference centers and new facilities for the purpose of tourism development.

Other Opportunities

Along with the core tourism business come other opportunities in related economies.

Transportation: The Nigerian Government is working to attain standard transportation network system to interconnect tourism sites, especially by Air, Road and Water. However, investment opportunities are open in all areas including water recreation transportation and rail services. An inter-modal transportation system linking roads, railways, air and maritime services is being promoted by the Government as part of the massive programme of infrastructural development and investment attraction.

Hospitality: The hospitality sector of the tourism industry seems to be the most competitive when it comes to hotels, resorts, other accommodation and intercontinental restaurants. With international brands like Starwood Hotel Groups – owners of Sheratons, Hilton, Le Meridien, Shangra Lai the Asian Hotel giant already having a presence in the country indicates the industry’s health. Meanwhile, most of Nigeria’s beautiful beach locations are still largely without accommodation facilities, which are good targets for investors in most tourism destinations across the globe.

Local Eateries: Just like in every other tourism industry, customers largely demand for exotic experiences including local food. Nigeria has a shortage of standard local eateries around tourists’ sites which avails a gap and a massive opportunity for local chain or franchise.

Local arts and craft: The souvenir culture among tourists and travelers are one that is hard to ignore. In other exotic tourism regions such as South East Asia, experts estimate that souvenir sales contribute as much as 15% of the local tourism revenue. However, in Nigeria, this add-on tourism potential was largely abandoned in the early 90s along with the entire industry. With a little revival and investment, this largely underestimated industry could make a significant come-back.