How to Invest in Nigeria?

Nigeria might be one of the planet's most underrated markets for doing business, considering the fact that many foreign investors, unfortunately, ignore the industrial potential due to the pre-conceived notion of Nigeria being an underdeveloped country. Well, our counter to anyone who possesses such a notion is that Nigeria is an untapped mine of opportunities that are soon becoming globally recognized. On one side, where we appreciate the perseverance of the corporate personalities that are bringing Nigeria to the global citadel, it is also noteworthy to mention how the vast availability of resources and the geographical placements in the mid-African Coastline have largely influenced industrial growth in the region. Trade possibilities, export and import partnerships, and mineral extraction facilities are only a few of the new advantages that have been unlocked by the nation’s quick yet unexpected progress over the years along with the increasing need for opening a corporate bank account in Nigeria for international investors.

It is a bit hard to believe that a country that had faced an economic downfall leading to recession not more than five years ago has picked itself up from the dust and is building a more modulated market. All this to enhance business growth and therefore, the Nigeria economy is creating new opportunities with its strong populous workforce. Further investment opportunities lie in growing business markets such as Construction, Tourism, Oil and Fuel, E-commerce, and Hospitality.

Growing Economy shifting Global Perspectives

Did we forget to comment that Nigeria has long surpassed South Africa in terms of overall GDP? Yes, we are not delusional at all; in fact, this was a long-gone case in 2014 when Nigeria became the economic powerhouse of the African Continent. Nigeria has received recognition from many indigenous investors who have been capitalizing on the vast opportunities and have thus contributed to the percentage jumps in the numbers. Crucial economic boosters have therefore given a unique standout to Nigeria, thereby becoming a convincing factor and an external influencer to attract foreign investments to the nation. Precise specifications about the current economic background of Nigeria are –

• Nigeria houses the second-largest oil and gas reserve in Africa
• Africa’s largest smartphone and electronics market, with 125 million users and counting
• The world’s fourth-largest producer and third-largest exporter of chocolate
• Education is quickly developing, and thus, more and more people are coming out as literate and Educated
• A market that has quickly embraced the convenience of E-commerce and therefore, has started demanding more such online facilities

Why Invest in Nigeria?

Well, if you aren’t convinced yet with the economic aspects, then let’s talk core business. Indigenous businesses and international corporations operate in this unique mixture of a business environment where traditional tactics are fused with modern tools. The landscape for learning is quite flexible in Nigeria to the extent that many industry professionals socialize with the youth and contribute towards crucial fields such as education and infrastructure. Lagos in Nigeria is currently a centrifuge for this corporate fusion of networks since it is the capital of the nation and receives adequate government attention for development, and therefore simplifies the administrative activities for companies such as tax payments, audit filing, registration, and incorporation.

Due to the newfound perseverance by the people and the exposure towards global innovation, Nigeria has become a beacon for doing business, attracting the gaze of investing entities far and wide –

• Cohesive growth between industry professionals and young visionaries has favoured the emergence of a startup revolution, with new companies using the internet to provide convenient services to simplify lifestyle.
• The various changes have generated a plethora of events where experiences and ideas collide, and therefore, shy and underrated technology innovators who were previously unrecognized are now being valued.
• The new generation of future workforce has inherited a specific curiosity for discovering possibilities beyond borders, which has led them to be technically empowered in terms of utilizing the internet for communication, education and holistic development.

How to Invest in Nigeria?

On 17 January 2019, the House of Representatives passed the Companies and Allied Matters Act (Repeal and Re-Enactment) Bill, and just for the sake of information flow, the said legal document had previously been passed by the Senate on 15 May 2018. This document is a proclamation that contains several relevant provisions in the context of Nigerian company law. The newly drafted Bill includes necessary legal amendments that can simplify the entry and exit for foreign national investors into and out of the Nigerian business market. Though most sectors do not have strict regulations for doing business, the government does strictly navigate a few, such as –

1. Oil and gas

• The law states that investors are to be competitive and cooperative in the award of contracts
• At least 51% of the shares of a company must be owned by Nigerian nationals or resident investors/entities

2. Shipping

• The Coastal and Inland Shipping Act under the legislation restricts the use of foreign-owned or human-crewed vessels for coastal trade in Nigeria
• Trade must be made through a partnership with Nigerian trade entities

3. Television Broadcasting

• Any company that is applying for a broadcasting license in any region of Nigeria must demonstrate that it is not representing any foreign interests
• The company must provide documents as proof stating that a significant stake of the company is owned and operated by Nigerians

4. Advertising

• Only a nationalized agency (which by definition is an agency in which Nigerian residential persons own not less than 74.9% of the company equity) can advertise to the Nigerian consumer market
• Thus, business partnerships with indigenous business entities are required

5. Private security

A foreign investor cannot acquire a share in equity or be a member of the board of a Nigerian private security company

6. Engineering

• Any company actively involved in engineering services must register with the Council for the Regulation of Engineering in Nigeria (COREN)
• A mandatory requirement for registration is that the company must have Nigerian directors registered with the COREN holding, and these registered directors must possess at least 55% of the company's shares

7. Aviation

To qualify for the grant of an aviation license or permit, the Nigerian Civil Aviation Authority must be provided with documents as evidence to inform that the license applicant is a Nigerian company or citizen

8. Pharmacy

The Pharmacist Council of Nigeria Act 2004 creates a provision for registration of non-Nigerian citizens only in cases such as -

• If the applicant's home country permits the reciprocal registration of Nigerian nationals
• The applicant must have been a resident in Nigeria for at least 12 months prior to the application

9. Negative list

The negative list is an anti-portfolio of businesses that are in restricted from any external investments or operations and are illegal if conducted by an entity apart from the government. According to the negative list, both Nigerians and foreign nationals cannot invest in the production of –

• Arms and ammunition, advanced weaponry, or explosive equipment
• Narcotic drugs, psychotropic substance,s and psychedelic compositions
• Manufacture and sale of the military, paramilitary, police, administrative staff, and prisoner clothing, uniform wear, and accessories (such as caps, badges, medals).

Now that you have all the insight concerning investing in Nigeria, you are partially set to sail the uncharted seas of glory that await in the Nigerian market. We also realize how exhausting the process can be for company incorporation and starting a business in Nigeria for foreigners; thus, let us assist your endeavour and reduce your adversities. Contact us to know more about how to set up a business in Nigeria.