NIGERIAN INVESTMENT PROMOTION COMMISSION

NIPC Home Page

TABLE OF CONTENTS

Foreword

Statement of the Executive Secretary/CEO

1.0EXECUTIVE SUMMARY

2.0INTRODUCTION

2.1Objectives of the Report

3.0CORPORATE PROFILE

3.1Our Vision3.2Our Mission

3.3Our Mandate

3.4Objectives of the Commission

3.5Organizational structure of the Commission

3.5.1Operational Departments

3.5.2Support Departments

3.5.3Service Units in the Office of the Executive Secretary /CEO

3.6Summary of Work Plan for the NIPC

4.0 HISTORICAL BACKGROUND

5.0 OPERATING ENVIRONMENT

5.1Nigeria in Perspective

5.2Challenges of the Operating Environment

5.3Constraints Faced by NIPC During the Year Under Review

5.4FDI Trend in 2004

5.5FDI Inflows to Nigeria

6.0 CORPORATE ACTIVITIES OF THE COMMISSION

6.1 National Council on Investment

6.2 Inter-Agency Collaboration

6.3 Presidential Cassava Initiatives

6.4 Role of NIPC in Micro, Small and

Medium Enterprises (MSME) Projects

6.5 Policy Advocacy

6.6 Workshop on Market Fires

6.7 Presidential Advisory Council on Investment

6.8 Tracking of FDI in the Commission

6.9 NIPC Registration/Grant of Business Permit

6.10 Grant of Pioneer Status Incentives

6.11 Grant of Expatriate Quota

6.12 Sensitization of NIPC Activities

6.13 Investment Missions/Business Investment Forum

6.14 Match-Making Meetings

6.15 Promotional materials

6.16 NIPC Newsletter

6.17 Image Building

6.18 Technical Collaboration with other International Agencies

6.19 Courtesy Calls on the Executive Secretary/CEO

6.20 Staff Training

6.21 Staff Promotion

6.22 Pension Scheme

6.23 Medical Scheme

6.24 Legal searches

6.25 Memoranda/due diligence

6.26 Litigations

6.27 Service Charter

6.28 Communication System in The Commission

6.29 Policy on Nursing Mothers

6.30 Corpers

6.31 Industrial Training

6.32 End-of-year Get-together

7.0 DEPARTMENTAL REPORTS

7.1 Department of Investment Promotion

7.2 Department of Investor Relations

7.3 Department of Policy Advocacy and External Relations

7.4 Department of Human Resources Development

7.5 Department of Finance and Administration

7.6 Office of the Executive Secretary/CEO

7.6.1 Corporate Development Unit

7.6.2 Research and Intelligence Unit

7.6.3 Legal Unit

7.6.4 Zonal Coordination Unit

7.6.5 International Investors Council

7.6.6 Multilateral and Plurilateral Unit

7.6.7 Information Technology Unit

7.6.8 Internal Audit Unit

7.6.9 Press and Protocol Unit.

8.0 PRIORITIES FOR 2005

FOREWORD

On assumption of office in May 1999, the government of Chief Olusegun Obasanjo hinged its political programme on the provision of good governance in all its ramifications. These among others include: upholding the sacredness of constitutional processes, democratic principles, rule of law, respect for human rights, transparency, accountability and a clear and uncompromising principle against corruption and corrupt practices which culminated in the establishment of ICPC and EFCC. The dividends of this may not have fully trickled down the entire fabric of the nation; however, phenomenal progress has been made which has resulted in rise in the flow of FDI to Nigeria.

Our country is now a safe haven for investors in view of the economic reforms through the NEEDS agenda that clearly opted for the promotion of a market economy based on free-trade system, viewing the private sector as the driving force for economic growth. The Federal Government guarantees the protection of foreign investments in Nigeria and allows free transfers of capital, profits and dividends.

The Council has re-invigorated the Commission to achieving its mandate through strategic guidance, policy formulation and approval of work plans and budgets in line with the Mission and Vision of the Commission in order to ensure that the Commission remains focused in achieving its goals.

Work has commenced on the design and development of a comprehensive investment policy for the country. Hopefully it will be completed in 2005.

The year 2004 was highlighted by investments into services, communications and manufacturing sectors.

In 2004, the Commission also implemented the study of Business Development System based on the model that has been proven successful among the best practices. This system has allowed for maximum development of resources to increase the competitiveness of Nigeria for FDI

We wish to acknowledge the support from Government and also thank all agencies in the public and private sectors that partnered with us or with whom we have interacted during the year under review, and all others whose support in the achievements recorded so far.

The efforts of Engr. Mustafa Bello, Executive Secretary/CEO, especially in implementing Councils strategic plans and his programme of linkages with investors, government agencies, coupled with the wealth of experience of my colleagues in the Council has direct bearing with the achievements recorded in the year 2004.

The 2004 report is the first in the history of the Commission, hence its robustness. It is informative and makes an interesting reading.

Chief Felix Ohiwerei

Chairman

STATEMENT OF THE EXECUTIVE SECRETARY/CEO

The Millennium Development Goals (MDGs) have renewed our focus on development and made possible a broad consensus on what is needed to attract FDI to the Nigerian Economy so as to reduce poverty and improve living conditions.

The Report of UNCTAD showed that global Foreign Direct Investment (FDI) inflows in 2004 rose by 6% to $612 billion, ending the downward trend that characterized the period 2001 to 2003. The upsurge in FDI was led by developing countries, which witnessed an estimated total rise of 48% compared to 2003, thus making developing countries attract 42% of global flows which is estimated to be $255 billion - the highest share in a decade.

Accordingly, FDI into Africa rose in the year under review, to an estimated $20 billion. A large part of this increase stems from investment in natural resource exploration hence natural resource rich countries like Nigeria, Algeria, Angola, South Africa, Mauritania and Libya were among the top 10 recipients of FDI inflows in Africa.

The year 2004 was a significant year for NIPC, not only in the numbers of investment facilitated, activities delivered, clients reached, but also for developing innovative strategies to reach our investors and forging closer alignment with agencies in the private and public sectors. NIPC FDI strategy through the 3-year Strategic Plan was also introduced in the year under review. Also, our transition from a regulatory agency to being a facilitator, the designing and delivery of investor-focused services that facilitates inward investments and aligning our workplans with the goals and aspiration of NEEDS was given greater impetus in 2004.

The result of all these is an upsurge in FDI inflow into the Nigerian Economy with the services sector accounting for 54.96% of total FDI into the country. This is followed by Telecommunication-23.06% and the third largest inflow was in the manufacturing sector, which accounted for 13% of total FDI into the country.

It is against this background that this report is put together to highlight NIPCs modest contributions as a driver of investments in Nigeria. The publication of this Annual Report is part of the accountability and transparency policy of the Commission. This production is the first published report of the Commission since its inception.

At this juncture, I wish to acknowledge the efforts of Mr. President, Chief Olusegun Obasanjo (GCFR), who has devoted his time and energy in leading Investment promotion in a way that no president in the history of this country has done. His tremendous passion for attracting FDI is unrivalled and he has remained supportive of NIPC without which the recorded achievements would have been elusive.

It is pertinent to also mention the unquantifiable support of the formidable NIPC Governing Council that consists of industrialists, captains of industry and technocrats. As a council of highly accomplished Nigerians, it has provided the much needed strategic direction which was blended with the support of Management and staff of the Commission to record the achievements enumerated.

I therefore invite you to explore, through this report. Some of our modest successes recorded in the competitive business of investment promotion.

Engr. Mustafa Bello, FNSE

Executive Secretary

1.0 EXECUTIVE SUMMARY

The 2004 Annual Report of the NIPC is put together to highlight NIPCs bold resolve and commitment to the actualization of the NEEDS agenda of the government as it affects the investment climate and also to serve as a guide for future improvements in service delivery in the Commission. It is also to serve as a guide for future government policy on investments.

The Annual Report aptly covers the functions and activities of the Commission bringing to the fore its achievements, strengths, weaknesses, constraints and recommendations for improvement. The Report seeks to highlight efforts of Government in creating a strong, private sector styled system of operation that would be a match for any IPA in the world.

The report also includes the numerous measures introduced by the Commission to improve the quality of its services and also enhances its capacity for service delivery. This included; networking with relevant agencies in the public and private sectors and emphasizing the need for effective collaborative partnership; the wealthy Nigerians Initiative (WNI), which aims at encouraging wealthy Nigerians at home and in diaspora, to invest in the Country; the National Council on Investment (NCI), which serves as an umbrella body comprising the NIPC, all the State Investment Companies, including FCT and a number of stakeholders in the country; the development of National Investment policy. All these are reportedly very supportive of efforts to create competitive and attractive Investment climate in Nigeria.

The report also captures the global FDI flows and the inflow of FDI into Nigeria. Nigerias progress towards sustainable economic growth and increase in FDI inflows is partly hinged on the government reform agenda and the deregulation of the oil and gas sector and the ongoing privatization of state-owned enterprises.

The outlook for 2005 is promising considering the current economic team and the tenacity with which government is implementing the reform agenda. It is expected that the economy will be better managed and tailored to service the needs of the people, investors and the economy in general. This in line with the macroeconomic targets as indicated by government in the NEEDS document and budget statements for 2005. These indicators are:

Real GDP Growth rate of 6%

6% reduction in poverty incidence

9.5% inflation rate

Two million minimum of new jobs to be created.

4.8% growth in real private consumption expenditure

8.5% growth in non-oil sector

Greater domestic utilization of raw materials is also in sight through the implementation of government policy on import restriction prohibition of some imported products

Departmental reports were also included in the report to familiarize our clients and other government agencies and the public generally with the functions NIPC and the efforts made to compliment government developmental challenges.

Finally strategic recommendations and priorities for government attention are highlighted.

2.0INTRODUCTION

Corporate Annual Reports are expressions designed as part of accountability and transparency in the conduct of the corporate activities of organizations particularly public sector agencies.

For NIPC, it is the first time since its inception that, such a report is being prepared and published. It is for this reason that the report contains details to enable our esteemed readers to understand our core functions, mandate and the activities carried out during the year under review. This also coincides with the first anniversary of Engr. Mustafa Bellos tenure as ES/CEO.

The report, which is the result of collective efforts of the Governing Council, the ES/CEO, Management and the staff of the Commission, highlights the achievement and institutional challenges during the reporting period. The report also sets the agenda for Investment Promotion in 2005.

The objective of the report among others include:

i. To collate, analyze and articulate the key activities of the Commission in the last one-year.

ii. To highlight landmark achievements and matching the challenges with achievements.

iii. To track and evaluate compliance and due diligence in the implementation of policies and programmes.

iv. To evaluate the performance of NIPC during the period under review against its mandate and core objectives.

v. To present a report that would offer management and Council the opportunity to review, appraise priorities and strategies adopted in 2004 against actual performance with a view to improving during the year 2005.

Sometimes, after a long period of stagnation, there suddenly emerges a newfound capacity to meet up with expectations of stakeholders in a line of business. In the case of NIPC, this unique opportunity was provided by the appointment of Engineer Mustafa Bello as the ES/CEO backed up with the formidable Governing Council chaired by Chief Felix Ohiwere, which, consist of accomplished industrialist and experienced technocrats with good track records of achievements in the public and private sectors in Nigeria and beyond. The Council embarked on far reaching repositioning that, gave the Commission a new lease of life. The strategy employed by the Commission through the 3-year strategic plan brought about positive attitudinal changes on the part of management and of the Commission.

During the reporting period, NIPC witnessed real transformation that was characterized by process re-engineering, alignment and realignment of programs and systems as well as the streamlining and mainstreaming of investment Promotion and Facilitation policies and programmes. It was also a period of proactive repositioning of NIPC to play its role and effectively deliver its mandate.

While taking responsibility for errors, Corporate Development Unit welcomes comments and observations on this report as we believe in continuous improvements in line with our commitment on our standards and quality of service as encapsulated in our Service Charter.

Incidentally, it was also during the same period that Corporate development Unit was established as focal point for coordinating the strategic planning efforts of the Commission and ensuring that policies, programmes and systems are aligned to and streamlined to conform with the Corporate plans and mandate of NIPC.

Amos Y. Sakaba

(Head of Corporate Planning)

3.0CORPORATE PROFILE

3.1OUR VISION:

To be the Pre-eminent Investment Promotion Agency in the Emerging Markets.

3.2OUR MISSION:

To proactively Position and Promote Nigeria as the Preferred Investment Haven.

3.3OUR MANDATE

The Nigerian Investment Promotion Commission (NIPC) is the agency of the Federal Government established under the NIPC Act 1995.

The Commission is mandated to encourage, promote and co-ordinate investment in the Nigeria Economy. The enabling law empowers the Commission to grant approvals on fiscal concessions on industry related incentives such as:

(i) Pioneer industries;

(ii) Local raw material utilization;

(iii) Export oriented industry;

(iv) Implant training;

(v) Investment on infrastructural facilities;

(vi) Research and development;

(vii) Investment in economically disadvantaged areas; provided that the fiscal incentives for which approvals are given shall be for tax concessions.

(a)Attract investments in and outside Nigeria through promotional means;

(b)

Register and keep records of all enterprises as applicable;

(c )Advice the Federal Government on policy matters including fiscal measures designed to promote the industrialization of Nigeria.

(d)It is the duty of the Commission to serve as a coordinating and approval center at the Federal level, for all governmental approvals with respect to the establishment and operation of industries or business undertakings, and with respect to the operation of governmental measures and schemes aimed at promoting investments in the country.

3.4OBJECTIVES OF THE COMMISSION

In line with best practice and to ensure a sustainable, dynamic and effective investment promotion, the following are the main objectives of the NIPC:

To project Nigeria as a safe country to invest in and prosper

To highlight investment opportunities in Nigeria by sector.

To identify Nigerians who will invest in these opportunities.

To empower Nigerians to invest.

To identify and encourage targeted countries and groups outside Nigeria to invest in the economy.

To portray Nigeria as objectively combating corruption advanced fee fraud, and improving infrastructure.

To position NIPC to effectively facilitate investment promotion in Nigeria.

3.5ORGANIZATIONAL STRUCTURE OF THE COMMISSION

The commission is structured to operate with three core operational departments, two support departments and ten service Units in the office of the Executive Secretary/Chief Executive Officer.

3.5.1Operational Departments

Policy Advocacy and External Relations

Investor Relations

Investment Promotion

3.5.2Support Departments

Finance and Administration

Human Resources

3.5.3Service Units in the Office of the Executive Secretary/CEO

Legal Unit and Council Secretariat

Secret Registry

International Investor Council Secretariat/HPACI

Research and Intelligence

Information Technology

Corporate Development

Press and Protocol

Multilateral and Plurilateral matters

Internal Audit

Zonal offices and Special Duties

Table: 3.9.1 Summary of work plan for the NIPC (July 2004 December 2007)

Activity

Strategy

2004

2005

2006

2007

Policy Advocacy & External Relations

1

2

3

4

1

2

3

4

1

2

3

4

1

2

3

4

Preparation of National Investment Policy

Collect, aggregate existing policies

Consultative meetings/discussions

Comparative studies against global best practises

National Conference on investment

Initiate approval process/documentation

Monitoring of Implementation of Changes/Amendments

Establishment of relationship with Sectoral National Councils

Present memorandum at various sectoral National Council meetings

Bi-annual Survey of Existing Investors

Liaise with relevant NIPC Departments

Design Questionnaire

Administer Questionnaire

Compile/Appraise submissions

Submission of Report

External Relations

Identify relevant foreign agencies/embassies

Meet periodically with identified Foreign Embassies/Agencies

Media Interactions

Appraise reports by International Agencies

Identify issues relating to countrys competitiveness

Forward recommendations on competitiveness

Formulate and negotiate memoranda of understanding with relevant international agencies

Participate in meetings on IPPAs

Implement relevant sections of the signed IPPAs

Participate in relevant National Economic Summits e.g. NESG

Investors Relations

Provision of wide range of information services to investors

Production of brochures, Fliers, CD-ROMs , Specter cards

National Stakeholders Forum

Seminars and Workshops on Pioneer status Administration and other incentives

Organization of In-bound Missions

Co-ordination of registration process for foreign companies

Printing of Business Permit Certificate and Forms

Grant of Expatriate Quota Positions: Verification of utilized quota with NIPC and Immigration

Investment Promotion

Investment generation

Hosting of BIFs

Study tours to select 1st Generation IPAS and WAIPA activities

Organize Nigerians in Diaspora Conference

Organise Conference of IPAS in ECOWAS sub-region

Outbound missions supported by Proinvest funding

UNIDO/NIPC Delegate Programme

Host Nigerian Investment Summit

Image Building

Fact sheets, documentaries brochures, and films.

Testimonials from existing investors and country presentations.

Communication

Media campaigns, Talk

Shows etc

Finance and Administration

Printing of Accounting Documents

Computerization of Payroll and Accounting Systems

Completion of Staff Canteen and Furnishing

Sinking of Borehole and Underground Water Tank

Construction of 33,000 litres Surface Fuel Tank

Maintenance of the Head Office Complex

Purchase of Consumables

Vehicle loan for staff

Purchase Vehicles

Purchase Air Conditioners:

Photocopiers

Alternate Energy Source (Solar) Development

Insurance of Capital Assets

Rent of ES Official Residence

Rent of Zonal Office Accommodations

Human Resources

Staff Training

Provision of Training Needs assessment of the Commission.

Comparative Assessment of existing policies based on the Training Needs Assessment of staff.

Local Training

Foreign Training

Staff Welfare

End of Year Merit Award

Staff Sports Development

Membership of Clubs

Staff Pension Scheme

To have a Scheduled Service Status

Human Manager Software

To Computerize Human Resource Operations

Consultancy Services

Human Resources Manual (Handbook), Performance Management System, Housing Policy, Training Policy

Operational Manual, Accounting Manual, Corporate Governance Manual.

File Management Tracking Solutions and Access

Control Applications

Conduct of promotion interviews by appropriate committees for promotion and discipline.

Office of the Executive Secretary:

Research And Intelligence Unit

Web Content Development

Policy Analysis by sectors

Preparation of Sector Profiles. Agric,ICT,Solid Minerals, Tourism

Oil and Gas ,Power, Financial Services, Construction, Transport

General Information Gathering

Provision of Project Profiles

Provision of comprehensive FDI Statistics

Country Competitiveness Studies

Provision of information for Promotional Materials

Stocking and cataloguing of Books for the Library

Information Technology Unit

Maintenance and provision of LAN (local area network) and WAN (wide area network)

Development and maintenance of a robust and interactive web portal or website

Acquisition and maintenance of computer hardware and peripherals

Acquisition and maintenance of efficient and reliable internet connectivity

Software support

PABX, improvement & maintenance

Staff training

Legal Unit

Stocking of the Law library

Subscription to affiliate/Professional Bodies

Honorary International Investor Council (HIIC)

Co-ordinate the preliminary/inaugural meeting of the Council.

The Second Meeting of the Council

Preparation of reports and follow up of action points

Multilateral And Plurilataral Unit

Identify and establish beneficial relationships with relevant agencies of the Federal Government, Multilateral Institutions, IPAs and others.

Build and maintain relationships with relevant government agencies and other organizations involved in Multilateral events and trade matters.

Develop and articulate proactive bi-national relationship between Nigeria and other countries on trade matters.

Ensure that the Commission has a common position with other relevant government agencies on Bi-national issues

Corporate Development Unit

In-house training for staff of Corporate Development Unit

Development of draft Strategic Plan/review exercise

Project Account Monitoring

Coordination of the evolvement of a Service Charter for NIPC

Coordination of the activities of Interdepartmental Strategic Planning and Implementation Think Tank (SPITT)

Shared Vision and Values Retreat for Mgt/Staff of NIPC

Preparation of Annual Reports.

Audit Unit

Conduct of pre audit and value for money audit

Verification of assets

Ensuring adequacy of internal control

Stock taking

Quarterly audit

Zonal office inspection

Market survey

Press and Protocol Unit

Publicity of NIPC activities

Press briefing, Press invitation (special report)

Newsletter Publication

Advertisement, Event management

Corporate gifts, Protocol and Passages

National flags, Purchase of digital video and digital still cameras

Purchase of films, tapes and Albums

Zonal Office Coordination Unit

Conduct Research on Investment opportunities in the Zones

Participate at International Trade Fairs (Kaduna, Lagos & Enugu)

Zonal Investment Forums

Preparation of reports on activities of the Zonal Offices.

Prepare End of year reports on the operations of all the Zonal Offices.

4.0HISTORICAL BACKGROUND OF NIPC

Since preceding decades, the government of Nigeria had vigorously pursued economic policies aimed at liberalizing and promoting competition and investments in THE Nigerian economy.

To reaffirm its commitment to market-led economy, the government has enacted and continued to update relevant legal instruments that hitherto contained provisions inhibiting competition and investment in Nigeria. Furthermore appropriate incentives are continuously being put in place to encourage and promote private investments.

The Nigerian Investment Promotion Commission (NIPC) was established under the NIPC Act of 1995 as a successor to the Industrial Development Coordination Committee (IDCC). The NIPC law repealed the IDDC Decree N0 36 of 1989 as well as the Nigerian Enterprise Promotion Decree of 1989.

The IDDC was to serve as a coordinating center that would consider and grant all industry related approvals under one roof thus saving unwary prospective investors the frustrating merry-go-rounds associated with obtaining investment approvals from different approving centres. However, the IDCC was bedeviled by daunting problems, which militated against its optimal performance. They included lack of quorum at meetings, inadequate funding and intrusion into its statutory functions by other ministries. It was as a result of these problems that NIPC was established to take-over the responsibilities of approvals among other investment promotion functions handled by the erstwhile IDCC.

The major objective of government for establishing NIPC is to adequately address those problems that foreign investors associate with the Nigerian Indigenisation Decree of 1977. The decree restricted or even denied foreign equity participation in some category of business activities in the country. The NIPC Act removed these barriers thereby opening the economy to full foreign participation except in those enterprises concerned with the production of arms and other prohibitive items.

Furthermore, foreign investors can own 100% of the equity of any enterprise in the country. Also, foreign firms or individuals are now permitted by law to purchase the shares of a domestic firms, provided such purchase is effected through the Nigerian stock Exchange. It also provided the guarantees against nationalization or expropriation. Investors are guaranteed unhindered transferability of capital, profits and dividends.

Under the law, NIPC is given full powers to encourage, promote and co-ordinate all investments in the Nigerian economy.

The role of NIPC as a one-stop agency implies that it should serve as the only co-coordinating and approving center for the establishment of businesses with foreign involvement in the country. Some Administrative Agencies, Ministries and Departments of Government are however, also performing this function.

Its current organizational form is focused on becoming an effective investor-service organization and championing improvements in the investment climate in Nigeria as well as building an effective system of zonal offices in the six geo-political zones of the country. This focus will lay the foundation for future efforts to bring new investors to Nigeria.

The complete overhaul and re-orientation of the Commission to adopt investor friendly work ethics, style and essence of the private sector approach to management was effected. The mode of operation of the new NIPC is to identify constraints confronting old and new investors, bearing in mind the fact that existing investors are the greatest ambassadors of the economy, and satisfying them normally gives the right signal to new investors.

With an estimated population of over 130 million, Nigeria is the most populous country in Africa with huge natural and mineral resources including oil. It is a major player in the New Partnership for Africa Development (NEPAD) It is the regional power in West Africa and is Africas leading oil producer with an output capacity of over 2 million barrels per day. Nigeria alone account for an estimated 50% of the output of all ECOWAS countries put together.

Government efforts towards fighting Product counterfeiting through the activities of National Agency for Food and Drug Administration, (NAFDAC), the Standard Organization of Nigeria (SON), The Copyright Commission etc is commendable and very much on course. Also, some of the identified problems of Investors are being tackled systematically and sure-footedly.

5.0OPERATING ENVIRONMENT

5.1 NIGERIA IN PERSPECTIVE

Foreign Direct Investment (FDI) can be critical in introducing widespread technological change, improving the agility and competitiveness of firms, and providing access to skills and global markets. Successful cases show the importance of having government promote and welcome FDI, particularly in infrastructure such as communication and energy.

Inspite of Nigeria vast natural resources endowment, the Nigerian economy had been in steep decline over the past decades. The economy was yet to experience the necessary critical structural changes that would guarantee rapid growth and sustainable human development. Poverty and unemployment remained seemingly endemic. Educational and health facilities degraded and services provided had declined sharply in quality. The infrastructural facilities are in a state of decay inspite of heavy financial outlay injected into the power sector by government over the years.

The year also witnessed frequent prolonged crises between the federal government and the Nigerian Labour Congress over the proper pricing of petroleum products, which had a retarding effect on the economy.

The poor state of infrastructure continues to militate against the growth of the private sector and imposes high transaction costs. High demand for the development of infrastructure remains a major concern of investors.

The operating environment was also characterized by the uncoordinated activities of investment promotion in the country. In addition to the Nigerian Investment Promotion Commissions role as the major agency empowered to promote and facilitates investment into the country, other agencies like the Federal Ministries of Industry and Commerce are involved in related activities. All the outcomes of these exercises are never harmonized and properly documented and in some cases, the efforts are duplicated. This explains the inability to produce accurate FDI statistics on Nigeria.

Despite the daunting challenges, the present Administration of Chief Olusegun Obasanjo has demonstrated strong political will to make the Nigerian investment environment one of the most rewarding in the world. Government hopes to attract Foreign Direct Investment (FDI) based on the successful implementation of its Economic Reforms Agenda that is home grown and self imposed. The National Economic Empowerment and Development Strategy (NEEDS) which among others include: better management of the economy, restoration of investor confidence, implementation of a competitive package of incentives; substantially reducing the cost of business in Nigeria; and generally creating an enabling environment for ensuring high returns that investment in Nigeria offers remains the greatest and boldest action aimed at making Nigeria ready for massive FDI.

5.2CHALLENGES OF THE OPERATRING ENVIRONMENT

Some of the major constraints to attracting investment in Nigeria include inconsistency in government policies, and unfriendly investment environment. Others are social vices such as corruption, drug trafficking, insecurity, financial and economic crimes as well as inadequate and uncompetitive incentives. It is therefore necessary to highlight the efforts of government at improving the business climate in Nigeria:

In 2004, cases of insecurity and ethnic crises were very rampant. The Niger Delta areas and part of Plateau state were mostly affected. Expatriates were held hostage in the Niger Delta areas of Warri, Bayelsa and Rivers. Businesses were affected following price increase of petroleum products in an attempt to deregulate the oil sector.

The cost of doing business remained relatively high in the country. This is a summation of the weakening local currency, high interest rates and inflation, perennial insecurity of life and property, poor infrastructure, high tariffs to mention a few. It was these constraints that necessitated government to resolve to tackle them frontally through various policy reforms that are now yielding positive results.

5.2.1 THE ECONOMIC ENVIRONMENT

Investment is essentially an economic activity and therefore the existing opportunities as well as the constraints in the environment, can influence the perception of the investors decision for an investment destination. In this respect, Governments recent economic and fiscal measures are targeted at some of the major impediments to private sector investment in the Nigerian economy. For example: -

(i) The issue of paucity of purchasing power, unemployment and underemployment, which are the result of the poor performance of the economy over the recent past, are now being addressed. Already being implemented, are the poverty alleviation programmes, promised wage increase for workers in the public sector and the on-going firm empowerment of the private sector through the privatization and concessions programme.

(ii) Stabilization of the macro economic indicators namely, the exchange rate, interest rate, budget deficits and inflation rate including the recent attempt to address the multiple taxation syndrome;

(iii) Sustained efforts at reforming the ports and the Nigerian Customs and immigration Service is also significant; while the rationalization of the numerous agencies at the ports is being effected to ensure speedy operations and substantially removing barriers to foreign investments.;

(iv) To reduce the cost of doing businesss, the policy on probity, transparency and accountability, is being pursued; The Federal government also put in place institutional reforms to further enhances the investment climate and transparency. They include:

Setting up of Independent Corrupt Practices Commission (ICPC)

Setting up of the Economic and Financial Crimes Commission (EFCC)

Setting up security and Investment tribunal etc.

(v) On security and crime, efforts geared towards improving the operational capabilities of the law enforcement agencies at crime prevention, detection and control are continuing. The Police force is being strengthened, through appropriate training and recruitment of new personnel, and the updating of its operational equipment and structures;

(vi) The introduction of the Universal Basic Education (UBE) Scheme is designed to combat illiteracy and further enhance skills and human development in the long-run. In Africa, Nigeria probably has the highest pool of skilled and highly educated manpower.

5.2.2 INFRASTRUCTURAL DEVELOPMENT

Government is adopting a multi-dimensional approach in tackling the problem of inadequate infrastructural facilities, which constitutes the most single contributor to the high cost of doing business in Nigeria. Currently, Government is involving foreign private sector participation in the Nigerian telecommunications, transport, water supply and energy sectors, as a strategy for infusing managerial and operational efficiency into the system.

The capacity of the National Electric Power Authority (NEPA) has recorded substantial improvement. During the last three years, the government has upgraded generating capacity from below 2,000MW to 4,500MW. The government aims at attaining a minimum power generating capacity of 10,000MW and uninterrupted power supply to at least 60% of the population by 2007. To achieve this goal, specific power supply programmes have been put in place in addition to increased government spending in the sector. Also, the government is promoting Independent (private) power producers (IPPs) to augment its efforts at expanding generation and distribution of electricity. Meanwhile over 17 licenses have been granted to this effect. Meanwhile NEPA has been disbanded in readiness for privatization of the resultant 18 Companies

In its efforts at improving the telecommunication industry, government had deregulated a number of telecommunication undertakings. Tele-density has been greatly enhanced with the presence of private telecommunication operators. By the end of 2004, over 10 million telephone lines were in use in the country.

The rehabilitation of road network in the country was commendable in the year under review. In the first phase of this project, about 500 federal roads were earmarked for rehabilitation and substantial achievements were recorded. This is still on going in the New Year.

The ongoing privatization effort was on course during the period under review and is been pursued vigorously.

5.2.3 SMALL AND MEDIUM ENTERPRISES DEVELOPMENT

The Federal Government is addressing the problem/issue of local long-term fund for investment as a matter of high priority. In this regard, three development banks, the Nigeria Import- Export Bank, Bank of Industry and Nigeria Bank for Agriculture, Cooperatives and Rural Development, have been restructured and being re-capitalized to provide long-term loans at low interest rates. In addition, government has established the Small and Medium Enterprises Development Fund in which commercial banks put aside 10% of their pre-tax profit to fund small businesses.

5.2 CONSTRAINTS FACED BY NIPC DURING THE YEAR UNDER

REVIEW

5.3.1 INVESTMENT INCENTIVES

Investment incentives are generally designed to provide tariff, fiscal and other concessions to enterprises that meet certain criteria such as size, choice of sector, employment creation, location, and local content etc. This applies both to foreign and domestic investors. Thus, for the purpose of attracting identified strategic investments, The NIPC by its mandate is expected to execute full authority in the administration of the numerous incentives to encourage investment activities. This is however, not the case as some Federal Ministries and agencies are equally performing this function. This requires coordination and streamlining for effectiveness. The recent Presidential Committee on Problems of Investors go a long way in overcoming most of the constraints.

5.3.2 FUNDING

Funding has been a major constraint to the implementation of the activities of the Commission. Foreign investment is an important instrument within national economic and industrial development policies. NIPC, as the key institution for the attraction of this investment, need to be properly funded by government as is the practice all over the world. The present administration appreciation of the strategic importance of investment Promotion is expected to attract funding support for the Commission.

As is in practice, the Commission does not charge fees for most of its activities. International best practice is that IPAs are public good agencies that are to be funded through the public treasury to avoid sending wrong signals to investors. Yet, funding for NIPC had remained inadequate and incapable of supporting the high requirements and expectations for investment promotion and facilitation. The net effect is that the very elaborate Strategic Plan and Annual Work Plans of the Commission are not implemented effectively.

In the year under review, the actual receipts were quite below the expected expenditure. This necessitated the realignment of goals from time to time and in the long run, the Commission could not meet all the corporate goals set out for the period. It was an impediment in actualizing the work plan set by departments, which translated into not meeting the set targets. The funding mentioned in the NEEDS document was not made available inspite of the political clout being enjoyed by the Commission.

The funding would be used in the following areas:

(i)Target Investment Promotion

(ii)Capacity building (staff training and development)

(iii)Development of data bank

(iv)Facilitating field visits;

(v) Organizing regional and sectoral seminars to sensitize the local

entrepreneurs;

(vi) Production of investment promotion materials;

(vii)Computerization;

(viii)Establishment of zonal offices etc.

5.4GLOBAL FDI TREND FOR 2004

After three years of declines, Global foreign direct investment (FDI) inflows in 2004 are estimated to have risen by 6% to $612 billion, according to data released by UNCTAD as shown on table(2).

Even though, the flows to developed countries declined again in 2004, FDI inflows to developing countries and transition economies reached higher new record levels. With US$255 billion in FDI in 2004, a 48% increase over 2003, developing countries now account for 42% of world FDI inflows compared to 27% during 2001-2003. In Latin America and the Caribbean, FDI flows increased, for the first time in five years, by 37% to US$69 billion. Asia and the Pacific received US$166 billion in FDI, a 55% increase over 2003. Central and Eastern Europe received a record US$36 billion in FDI, while US$20 billion in FDI went to Africa.

The FDI inflows to Africa, which amount to 20 billion (table 1) translate to only 3% of global FDI. This to a large part is attributed to investment in natural resource exploitation, driven by a strong rebound in global commodity prices and demand for diamonds, gold, oil, platinum and palladium. As a result, such natural-resource-rich countries as Algeria, Angola, Libya, Mauritania, Nigeria and South Africa received more FDI.

UNCTAD believes that the likelihood of continuing high prices for key commodities may encourage transnational corporations (TNCs) to pursue new exploration projects in African countries, leading to sustained high levels of FDI.

Table 5.4.1 : FDI inflows in billion US dollars, by host region and major host

Economy, 2001-2004

5.5 FDI INFLOWS TO NIGERIA

fDi Magazine reported that Nigeria is experiencing a significant increase in FDI, a fact that is recognized by the UN World Investment Report. This is largely due to political stability and economic reform. In addition, Nigeria possesses a well-educated workforce, commitment to improving infrastructure and a wealth of unexploited natural resources. Its good trade links with the rest of West Africa gives Nigeria access to a market force of over 250 million, thereby making it a good target for foreign investment. Under President Olusegun Obasanjo, there is macroeconomic stability and GDP growth is estimated to have surpassed 5.5% in 2004.

Fig. 5.4.1, which shows the top recipients of FDI in Africa for the years 2002 and 2003 indicated that Nigerias FDI inflow in 2003 was $1.2b, which is one of the largest in Africa.

The success achieved from the deregulation of the telecom sector, which is depicted by the increase in the number of telecom operators among which include major players like MTN, Globacom and Vmobile and the huge profits declared by them is indicative of the vast potentials of Nigerias 130 million-strong consumer market. The tremendous unfolding improvements in infrastructure, coupled with the governments strong desire for accountability and transparency in the operation of government, makes Nigeria to become a competitive location for FDI.

Figure 5.5.1: The top ten recipients of FDI inflows in Africa, 2002 and 2003 (Billion of

Dollars)

Source: UNCTAD World Investment Report 2004

6.0 CORPORATE ACTIVITIES OF THE COMMISSION

6.1 NATIONAL COUNCIL ON INVESTMENT

The Commission successfully organized the first National Council on Investment, which was the congregation of stakeholders in the drive for FDI. The huge turnout by state stakeholders was an indication that the conference was long over due. The Council met to fashion out a national investment strategy for the country and also looked at ways of harnessing the vast potentials available in the country. It also addressed the inadequacies of the State Investment companies whose activities ignored the elements of investment promotion and facilitation. Designed to be an annual event, the NCI is also expected to facilitate streamlining of Investment Promotion activities nation-wide and to provide basis for a coordinated, streamlined and focused national investment promotion

6.2 INTER-AGENCY/EMBASSIES COLLABORATION

The Commission coordinated investment promotion activities in the country through effective liaison with other government agencies, as part of ongoing strategy to foster collaboration among relevant Ministries and Agencies of government in the business of investment promotion and facilitation. The Commission also networked with representatives of foreign Embassies and Missions in Nigeria as part of efforts to establish working relationships with them. The result of these collaborative efforts considerably improved on the overall co-ordination of the Commissions efforts at Investment Promotion in Nigeria

6.3 PRESIDENTIAL CASSAVA INITIATIVE

The presidential initiatives aimed at promoting cassava as a foreign exchange earner had gained momentum. The global demand and presented great opportunities for Nigeria to achieve appreciable industrial growth and generate income for the stakeholders as well as the catalyst for engendering food security. It was as a result of this importance that the NIPC was directed by the Presidency to recommend appropriate incentive packages designed to lure prospective investors and stimulate investment in the cassava production circle, as well as proffer a programme, of sensitization within the framework of the Commissions promotional strategies. This was done successfully and the strategies were being implemented to enable the country to be globally competitive in attracting investment into cassava and other agricultural commodities.

6.4 ROLE OF NIPC IN MICRO, SMALL AND MEDIUM ENTERPRISE (MSME) PROJECT OF THE IDA

The implementation of the International Development Association (IDA) Micro, Small and Medium Enterprise (MSME) project in Nigeria by the Commission continued to open up avenues for increased collaboration with international economic development institutions such as the World Bank, International Finance Corporation (IFC), Department for International Development (DFID) and United Nations Development Programme (UNDP) with the prospects of bringing on board other development programmes. The overall objective was to support Small and Medium Scale enterprises development in the country. The project had been declared active and the Monitoring Unit had been on ground. The meeting of the stakeholders to formerly launch the pilot scheme in Lagos, Abia, Kaduna and Federal Capital Territory had been set in motion.

6.5 POLICY INTERVENTION AND ADVOCACY

As one of its functions, the Commission is charged with the responsibility to remove bureaucratic bottlenecks in the process of doing business in Nigeria. The Commission had therefore put in place an effective mechanism for policy advocacy to tackle these problems. The Commission also visited ailing companies to appreciate the problems and made appropriate recommendations to government. Also, the Commission advocated on their behalf and obtained some special incentives. Some of the proposals submitted to government during the period under review included:

Collaboration with theFederal Inland Revenue Service (FIRS) to address issues related to investment climate in its tax reforms bill currently before the National Assembly.

Memo to Mr. President on the review of the Coastal and Inland Shipping (Cabotage) Act, 2003 that restricts 100% ownership of inland shipping to Nigerians. NIPC intervened for special concessions abnd exemptions on existing foreign investors.

Study by the Commission on the problems of the textile industry in Nigeria is designed to facilitate a package of incentives that would restore and turn around the fortune of the industry, which is threatened with several obstacles that require government intervention.

Several memoranda to the President requesting for waiver/reduction in tariffs, concessions in respect of the following investments had been made to the presidency:

Shoprite checkers, South Africa;

Keyvee Nigeria, Cayman Islands;

African Oxygen and Industrial Gases, India;

Conserveria Africana, Italy;

African Automobiles, Dubai

Parker Logistics;

Illovo Sugar, South Africa;

ZTE Corporation of China;

Namitech Ltd;

10.Afrihub Ltd. Etc.

6.6 WORKSHOPS ON MARKET FIRES

During the reporting period, the Commission served as Secretariat to the Technical Committee on Market Fires Workshop. The Committee was a product of the meeting of the stakeholders on market fires, which was convened by the NIPC on 15th January 2004. The Committee organized two workshops and campaigns in Abuja and Lagos on July 22/23 and July 29/30 respectively.

The essence was to sensitize the traders of the negative impact of fire disaster in terms of the colossal loss of property and investments as well as what is required to ameliorate future occurrence. Markets accounts for a sizeable percentage of investments in the country as they provide employment and serve as the engine of growth for the nations economy. It was against this background that NIPC made efforts to reduce or minimize the menace.

6.7 PRESIDENTIAL ADVISORY COUNCIL ON INVESTMENT

Mr. President set up the Honorary Advisory Council on Investment to advice on investment. Members were mostly international policy and business players who have excelled in their chosen fields. These are people that are in positions to authorize or influence the investment decisions of their companies and as well as play significant role in persuading their governments to invest in Nigeria. Baroness Lynda Chalker former member of Parliament for Wallasey is the coordinator.

Membership is also largely drawn from the Nigerian private sector. Public sector include the Economic Team Members, the Executive Secretary/Chief Executive Officer of NIPC, key relevant Ministers (Finance, Commerce, Agriculture, Communications, Solid Minerals Development, Agriculture, Power & Steel and Industry), the Economic Adviser and the CEOs of NNPC, NEPC, NEPA & BPE. The NIPC serves as secretariat for the council.

6.8 TRACKING OF FDI IN THE COMMISSION

In view of logistics problems different agencies operate independently thus making accurate FDI data difficult. The Commission had realized this and has commenced work aimed at streamlining the tracking of FDI. The convening of Inter-ministerial Committee on FDI is one of such measures adopted by the Commission for the tracking of FDI. Meanwhile the Commission relies on the FDI figures it generated internally through the permits and other approvals facilitated for foreign companies doing business in Nigeria. Also, the FDI figures released by international agencies like UNCTAD and FDI magazines remains the major source of FDI statistics.

The Commissions internal records which summarized total FDI inflow into the Nigerian economy for the year 2004 comprises of data / information gathered on Foreign Loans and Business Permit issued by the Commission. It reveals the total FDI inflow for the year 2004 to be $ 97.65 million. The provision of services alone, accounted for $53.67 million, which translate to 54.96% of total FDI inflow into the country. This is followed by communication with an amount of $22.52 million, which is equivalent to 23.06%. The third largest inflow is in the manufacturing sector, which attracted $12.69 million constituting13% of total FDI inflow into the country.

Source: NIPC Records

6.9 NIPC REGISTRATION/ GRANT OF BUSINESS PERMIT

In year 2004, the Commission registered a total of 63 new investments out of which 5 came from Oil and Gas, 4 from Engineering/Constructions, 18 from Manufacturing, 18 from Services, 5 from the Communications sector, 7 from Agro/Agro Allied, 3 each from Pharmaceuticals and the Transport sector. These investments brought in a total sum of $96.34 million by way of foreign capital injections, with the Oil & Gas sector accounting for the largest chunk of $88.57 million. A tabular representation of the sectoral approvals is shown on table 6.9.1

Table 6.9.1: Grant of Business Permit in 2004

S/N

SECTORS

N0. OF BUSINESS PERMITS GRANTED

1

Transport

3

2.

Pharmaceuticals

3

3.

Agro/Agro Allied

7

4.

Communications

5

5.

Services

18

6.

Manufacturing

18

7.

Engineering/Construction

4

8.

Oil & Gas

5

TOTAL

63

Fig 6.9.1 Grant of Business Permit 2004 by Sectors

Source: NIPC Records

6.10 GRANT OF PIONEER STATUS INCENTIVE

An increase in the number of Pioneer status granted was recorded in the year under review. A total of 20 Pioneer Status approvals were granted to deserving companies in 2004. compared to 13 in 2003. Amongst the total approval granted in 2004, the manufacturing Sector accounted for 7, Solid Mineral 1, Communication sector 4, Agro / Agro Allied 4, Infrastructure 2 and Oil & Gas sector 2. There was one Pioneer Status extension granted to an eligible company to enable it expand operations and recoup part of its investments as a result of losses suffered during the year in review.

Table 6.10.1:Grant of Pioneer Status Incentives

S/N

SECTORS

N0.OF PIONEER STATUS INCENTIVES

1.

Oil & Gas

2

2.

Infrastructure

2

3.

Agro/Agro Allied

4

4.

Communications

4

5.

Solid Minerals

1

6.

Manufacturing

7

TOTAL

20

Source: NIPC Records

6.11 GRANT OF EXPATRIATE QUOTA POSITIONS

The Commission in conjunction with Immigration Desk facilitated the grant of Expatriate Quota positions. A total of two hundred and fifty five (255) Quota positions were granted to 31 companies in 2004.

The grant of Expatriate Quota Positions according to sectors is shown on table 6.11.1

Table 6.11.1: Grant of Expatriate Quota Positions in 2004

S/N

SECTORS

N0.OF COMPANIES

EXPATRIATE QUOTA POSITIONS

1.

Manufacturing

7

124

2.

Oil & Gas

2

6

3.

Engineering/Construction

7

38

4.

Agriculture

1

4

5.

Communications

2

8

6.

Services

2

6

7.

Pharmaceuticals

1

1

8.

Transport

1

4

9.

Tourism

1

5

10.

Miscellaneous

7

59

TOTAL

31

255

6.12 SENSITIZATION OF NIPC ACTIVITIES

The Commission carried out a sensitization programme aimed at educating the Public on its activities and to seek public support for its programmes. To this end, courtesy visits were made by the Executive Secretary/CEO and Management of the Commission to relevant government ministries, State Governors, State Investment Promotion Agencies, Heads of relevant government Parastatals, High Commissions/embassies of foreign countries, Multinational companies, accomplished Industrialists, and other stakeholders was successfully carried out.

On the other hand, notable organizations and dignitaries also called on the Commission during the period under review. Most of the courtesy calls were to explore areas of collaboration and areas of investment from the Commission. This has helped the Commission to have a better appreciation of the challenges the investors grapple with in the Nigeria business environment and also to develop strategies to handle same. The surge in the number of enquiries is a further testimony of the realization of NIPCs role and effectiveness in investment promotion in the country.

Furthermore, the Commission hosted four (4) Press conferences and press interview for the year under review as follows:

Press Conference on National Council on Investment (NCI)

Press Conference on Market Fires

Press Conference on the Activities of the Commission( Pioneer status granted to MTEL)

Press interview to both Print and electronic Media

The result of the enhanced publicity found expression in the upsurge in interest and enquiries to the Commission as well as the goodwill it enjoys in the media and by other agencies.

6.13 INVESTMENT MISSIONS/BUSINESS INVESTMENT FORUMS

The Commission successfully organized foreign investment promotion forums. These forums were targeted to identified potential investors and multinational companies. The Commission carried out targeted investment missions to the following specific countries:

(i) Trim 2004: Investment mission to Canada in collaboration with direct mail involving several private sector companies in solid minerals and IT sectors.

(ii)Palm Oil Conference in Kuala Lumpur, Malaysia: MOU for investment with $ 1.5 billion spread over 10 years was secured. An identified investor had already visited Nigeria twice and are discussing on investment in the sector with some selected State Governments.

(iii)Nigeria China Business and Investment Forum Shanghai: This included site visits and meetings with various companies. The BIF was arranged to coincide with Chinese World Annual Conference and Trade Fair. Many MOUs were signed towards bringing investment into Nigeria most of which were followed up by NIPC and are in various stages of actaulization.

(iv)South Africa Made in Nigeria Expo:

Through partnership with PR-Africa, a made in Nigeria Expo, the Commission facilitated the presentation of Investment Forum in South Africa, which was generally successful and resulted in several MOUs between South Africa enterprises and Nigerian businessmen.

(v)Best of Nigeria Expo: London

Also, through collaboration with NTIC London, the Commission arranged and facilitated the participation of Nigerian companies in best of Nigeria Expo, which took place in London.

(vi)Others includes:

UK/China Delegate Program under the NIPC/UNIDO partnership

The Executive Secretarys targeted Investment Missions to Taiwan and Russia.

The UNIDO/NIPC delegate program to the UK. As a result of these discussions with 18 Small and Medium Enterprises for possible joint ventures partnerships with foreign partners are on-going.

6.14 MATCHMAKING MEETINGS ORGANIZED BY THE COMMISSION

The Commission organized Matchmaking meetings between potential investors and government agencies, private sector associations, consultants and private companies etc. These were interactive sessions for both parties to get acquitted to themselves, exchange copies of their business plans and begin the process of networking which will develop into investments in the country. The following meetings were held;

(i)Mobilized the Nigerian organized private sector (OPS) and individuals to meet with a Chinese delegation led by the chairman of the national peoples congress committee.

(ii) Hosted the Taiwanese trade delegation to a business dinner.

(iii) Brokered a meeting/dinner between OPS and the Russian business delegation to Nigeria.

(iv) Facilitated and participated in the Business Session organized by the Full Gospel Fellowship, as part of the activities of its 2004 convention in Abuja.

(v) Organised a business meeting for the visiting US delegation- African World Expo Group

(vi) Meeting between MAN Lagos and Russian trade delegation facilitated.

(vii) Hosting Chinese Chairman, Committee on National People Congress to business Meeting with top Nigerian public and private organizations

(viii) Globe Commodities of UK/ seven palm oil producing state in Nigeria.

(ix) March making session with Russian Trade delegation.

(x) March making session with US delegation from Oklahoma State with Nigerian entrepreneurs.

6.15 PROMOTIONAL MATERIALS

The Commissions publications are made available to prospective investors. These publications contained various information on the investment opportunities, incentives offering, and procedures for establishing businesses in Nigeria. During the period under review, 1000 copies each of the following publications were printed and distributed

(i) Investing in the Nigerian economy.

(ii) Investment Opportunities in Nigeria

(iii) NIPC at a glance

(iv) Investment Incentives in Nigeria.

(v)Production of Investment Guide to Nigeria on CD

6.16 NIPC NEWSLETTER THE INVESTMENT FACILITATOR

The Commissions Newsletter was produced during the period under review. The maiden edition was widely acclaimed by readers and stakeholders. The Newsletter is published quarterly and is aimed at highlighting the activities of the Commission and other relevant information to stakeholders.

6.17 IMAGE-BUILDING

The Commission embarked on image-building activities to counter the negative image of the country abroad. The Commissions image-building communications strategies developed and implemented for the country in include:

Placement of adverts in the international media.

Distribution of flyers at international forums.

Business and Investment Forums

In and outbound delegations

Syndicated New reports

6.18 TECHNICAL COLLABORATIONS WITH OTHER INTERNATIONAL

AGENCIES

The Commission had useful collaborations with some international agencies, which led to the sponsorship/project promotion as follows:

Sponsorship of WAIPAS Workshop by pro-invest leading to the formation of AIPAWAS (Association of the West African Investment Promotion Agencies.)

Project identification/profiling exercise with UNIDO, which resulted in the profiling of 75 projects currently being promoted. Another set of 35 projects are undergoing packaging under this collaboration.

Collaboration with UNIDO for the training of NIPC staff on COMFAR III Expert software for Project analysis and evaluation.

Through collaboration with UNIDO, Nigeria is a member of AFRIPANET.

Pro-invest: Sponsorship of 1st workshop in 2003, involving all the IPAs in West African region leading to the formation of AIPAWAS. Nigeria is currently occupying the seat of the office of the Vice-President in the organization.

6.19COURTESY CALLS ON THE EXECUTIVE SECRETARY:

Many courtesy calls on the Executive Secretary and Management staff of the Commission were recorded during the period under review. The purpose of most of the courtesy calls was to formally explore areas of collaboration and areas of assistance from the Commission. This has helped the Commission to fashion out how to assist investors grapple with the Nigeria business environment.

Table 6.19.1: Some of the recorded courtesy calls on the

Executive Secretary include:

S/N

ORGANISATIONS

1

The world Bank Country Director and DFID representatives.

2

Hallmark Bank management.

3

NAL Bank Management

4

NUB Bank Management

5

British Deputy High Commissioner

6

Adpure Nig. Ltd.

7

SME Manager

8

Nigeria Foundries Ltd.

9

Capital Bank Management

10

German Technical Service

11

Invest group

12

Ugandan High Commissioner

13

Bar. Gaius Anancha Yaro

14

Chinese delegation

15

Trade Representative of the Russian Federation

16

Polish Business delegation

17

Investment Delegation from USA

18

First grams Trade Fair and Exhibition Support Services (FGTES)

19

Zilon Dezicon ltd

20

Orifunmishe and Company

21

FSB International Bank Management

22

First City Monument Bank Management

23

Canadian Ambassador

24

Leader of European Union (EU)

25

Eco Bank Management

26

Diametrics Nig. Ltd.

27

Policy Magazine

28

Magnum Bank Management

29

Mutual Alliance Nig. Ltd

30

Junior chambers

31

Glo Mobile ltd

32

Delegation from Turkey

33

Opportunity Nigeria

34

Ekiti State Commissioner for Commerce

35

African Access Ltd.

36

Pacific Bank Management

37

Nigeria Trade and Investment Center London

38

Parker logistics

39

Iranian Embassy

40

Citizen Bank Management

41

NASME

42

Atlantic Shrimpers Nig. Ltd

43

Marina Bank Management

44

Petra Tech ltd.

45

Equitorial Trust Bank

46

Ambassador of Poland

47

NEPZA

48

Special Adviser to the President on AGOA

49

Marina Bank Management

50

American Hospital Corporation

51

Trade Mission office of Taiwan

52

National Association of Small Scale Industrialists

53

Diamond Bank Management

54

Prudential Trust Company

55

Chinese Vice Minister of commerce

56

Win Telecom Nig. Ltd.

57

IMB Bank Management

58

Callcash Nig. Ltd.

59

Standard Trust Bank Management

60

Chasel Hospital

61

Exide Battery Company Dubai

62

Vmobile Management

63

Coastline Nig. Ltd.

64

Quest Media

65

Thales ltd.

66

Hewelt Systems ltd

67

Korean American Business association

68

Chairman, House Committee an Housing and Urban Development

69

Rediscover Nigeria presentation

70

Ambassador of Korea

71

Taiwanese Investment Delegation

72

Dexterite Interactive presentation

73

Aluko and Oyebode Legal Consultant

74

Commerce Petrol Lagos

75

International Risk Management Group

76

President of Manufacturers Association of Nigeria (MAN)

77

Nigeria Greek Business Council

78

Russian delegation

79

Securities and Exchange Commission (SEC) Management

80

Accelon Nig. Ltd

81

Eko Supreme System Resources

82

Guarantee Trust Bank Management

83

UNIDO

84

First Interstate Bank Management

85

GSM Operators in Nigeria

86

Candoz Communication ltd.

87

Barbados Investment delegation

88

Ukrainian Ambassador

89

Panasonic Nig ltd

90

Kayvee Nig ltd

91

Sun Topway Solar Nig. Ltd

92

IRMG

93

African Development Foundation management

94

Chrome Oil Services Management

95

Inter Stella Communication ltd

96

Nigerian Economic Summit Group

97

Access to Justice Delegation

98

Abuja Chamber of Commerce and Industry Management

99

Algerian Ambassador

100

CCECC Management

101

Goesonic Digital Communication ltd.

102

Indian High Commissioner

103

UNIDO Vienna

104

Contact technologies ltd

105

Next International ltd.

106

Artec Group of Companies

107

Manchester Trade Center

108

Fountain Field ltd.

109

Software Technologies ltd

110

Nigeria - Polish Business Council

111

Illovo

112

Fadun Company ltd

113

Aqua Link ltd.

114

Jordanian delegation

115

Shoprite Investment Group.

116

International Republic Institute

117

Rice Processing Association of Niger State

118

African Steel ltd

119

Tawanese Delegation

120

KPMG/ NWAL South Africa

121

Xechem Management

122

Link Up International ltd.

123

BIDVEST Group, South Africa

124

Mr. Sodhi,

125

Rockson Engineering ltd

126

Indian/ Lebanese Business Community

127

Hamza Holding ltd.

128

ZTE Management

129

DHL Management

130

Infocom Resources ltd

131

Genie NT

132

DOME Management

133

De United foods

134

Educiare ltd

135

Broad Bank Management

136

Zhauns Engineering ltd

6.20 STAFF TRAINING

During the period under review, the Commission was able to train some staff within and outside the country. Twenty-four (24) staff, representing 14.0% of the entire staff attended training programmes due largely to financial constraints the Commission contended with during the reporting period.

6.21 STAFF PROMOTION

The Commission promoted members of staff that met the requirements as contained in the Condition of Service. This development was widely acknowledged by the staff, as it was long over due.

6.22 PENSION SCHEME

As part of ensuring a secured future for staff in and out of service, the Commission had put in place a pension scheme. The Board of Trustees was subsequently inaugurated on 2nd July 2004.

The Board of Trustees at its second meeting held on 1st December, 2004 considered and approved the appointment of Goldlink Insurance Company Limited and Unique Fusion Insurance Brokers Limited as Underwriter and Broker respectively. However, in view of the new national Pension Policy, Management is working on linking the Commissions Pension Scheme to it in the overall interest of staff.

6.23 MEDICAL SCHEME

As part of its welfare services in the health care delivery, the Commission engaged the service of Southern Rose Health Care Services Limited, a health maintenance organization. This health maintenance organization renders its services through some selected, well-equipped clinics with state-of-the art facilities nationwide. The aim was to ensure that staff are properly taken care of to enhance productivity.

6.24 LEGAL SEARCHES

The Commission conducted Legal searches at the Corporate Affairs Commission (CAC) on the companies that applied for the grant of either Business Permit or Pioneer Status. The aim was to detect companies that have doubtful information. This activity only commenced in 2004 and the Commission was able to uncover some companies that were not duly incorporated. This was also a new concept to ensure due diligence in the Commission activities.

6.25 MEMORANDA OF UNDERSTANDING

The Commission drafted and vetted 11 Memoranda of Understanding between NIPC and other Organisations. The Memoranda of Understanding are mainly on areas of collaboration. The increase in the number of MOUs in 2004 was an indication of the number of organizations willing to do business with NIPC and the country. The organizations include:

(i) NIPC and Tamalak International Commercial Broker

(ii) NIPC and the Nigerian Trade and Investment Centre

(iii) NIPC and Invest in Sweden Agency

(iv) NIPC and Ericsson Sveridge Agency

(v) NIPC and Novalink (formerly Lagolm Konsult)

(vi) NIPC and Deluxe Vactions

(vii)NIPC and Invest in Finland

(viii)NIPC and Candoz Communications Limited

(ix)NIPC, Digital Platform Limited and Federal Ministry of

Communications

(x)

NIPC and ISSL on the NISSEX EXPO 2005.

(xi)NIPC and PR AFRICA INTERNATIONAL LIMITED

6.26LITIGATIONS

During the year under review, the Commission was involved in only one Court case before an Abuja Magistrate Court. This was a civil case between: NIPC and Abuja Environmental Protection Board on the Commissions failure to settle the outstanding balance of its waste disposal bills. The matter was settled out of court. As a service provider, it is the policy of the Commission to avoid any form of litigation in order not to compromise or undermine the tremendous goodwill it enjoyed.

6.27 SERVICE CHARTER

The Commission produced a Service Charter during the year under review. The Service Charter is designed to facilitate quality of service delivery provided by the Commission for the benefit of its clients. The Charter outlined the standards and quality of services rendered by the Commission in line with its mandate and to which it is committed to providing and to be held accountable to.

The production was in line with Federal Government directives to Ministries, extra-ministerial departments and other Government Agencies to produce and be guided by their Service Charter. Full implementation is expected as soon as Council approves the Charter.

6.28COMMUNICATION SYSTEM IN THE COMMISSION

The evolvement of a good management operating procedure is the key to the success of any organization. Regular weekly management meetings were held to discuss the major activities of the Commission. Similarly, regular departmental meetings were conducted to ensure that staffs were briefed on the major policy decisions taken by the management and a feedback to management on its decision obtained from staff.

This system greatly reduced rumor mongering in the Commission to the barest minimum and also monitored the activities of the department on a continuous basis. Periodic general staff meetings with the Executive Secretary/Management were held in order to review and discuss more.

6.29POLICY ON NURSING MOTHERS

The Commission being a caring organization had provided for a conducive environment for the nursing mothers by enhancing the resumption and the closing times to enable them take care of their babies before and after closing for the day. The period of resumption is 10.00am while closing time is 3.00 p.m.

6.30CORPERS

The Commission as part of its contribution towards sustaining the NYSC scheme, engaged the services of 17 Corpers during the year under review.

6.31INDUSTRIAL TRAINING

The Commission gave opportunities to 33 students on Industrial attachment to acquire hands-on experience relevant to their areas of studies as part of its contribution to national manpower development.

6.32 END OF YEAR GET-TOGETHER

The Commission organized the end of year Get-together for the first time since its inception. It was an opportunity for staff of the commission to interact and relate with members of their families.

7.0DEPARTMENTAL REPORTS

7.1DEPARTMENT OF INVESTMENT PROMOTION

The Investment Promotion department was one of the core operational departments of NIPC. The mandate of the department is direct marketing i.e. targeting and encouraging investors to invest in Nigeria.

The objective was to project Nigeria as a safe country for investment, highlight investment opportunities and encourage target countries and groups outside Nigeria to invest in the economy.

7.1.1Functions

This department has the following as its major functions:

7.1.1.1.Investment Generation

The department coordinates the Commissions investment missions abroad i.e. Business and Investment Forums in different regions abroad.

It initiates new investment projects and agreements.

Identifies and periodically reviews viable investment and projects for promotion.

Targets high net worth Nigerians for investment generation.

7.1.1.2Image building

This is meant to improve Nigerias image globally. This comprises:

Campaigns to reduce investors worries, reverse the negative perceptions about corruption and personal safety and shall be done through the following:

Media and public relations activities, projecting positive side of Nigeria

Advertisements

Advisory Investment Council

Newsletters/publications

Reports and literature.

Courting multiplier persons/institutions who are not investors themselves but are agents who are in regular contact with potential investor. Some of the methods be used to attain these, include:

The use of professional advisors e.g. consultants, agents or representatives, lawyers.

Trade associations, chambers of commerce, commercial attachs.

7.1.1.3Communications

The department was responsible for developing functional image building program, which is self-sustaining. This will consists of classified advertisement in international newspapers and magazines, business spot surveys obtained through exclusive agreements with international publishers as well as intensive local T.V. and radio campaigns, sponsored segments on national T.V., distribution of pamphlets for example to airlines for boarding passengers etc.

7.1.1.4ACTIVITIES OF THE DEPARTMENT

(A)Investment Missions

The department during the period under review coordinated targeted investment missions to the following countries:

(i)Trim 2004. Investment mission to Canada in collaboration with direct mail involving several private sector companies in solid minerals and IT sectors.

(ii) Palm oil conference in Kuala Lumpur, Malaysia (MOU with projection

of $ 1.5 million spread over 10 years.)

(iii) Nigeria China business and investment forum Shanghai, which

included site visits and meetings with various companies.

(iv)UK/China delegate program under the NIPC/UNIDO partnership

(B) Promotional materials

The department coordinated the reprinting of each of the following promotional brochures:

Investing in the Nigeria Economy

Investment Opportunities in Nigeria

NIPC at a glance

Investment Incentives in Nigeria.

Investors Guide to Nigeria (Produced only on CD ROM.

(C) Investor tracking

Investor tracking and targeting activities included follow-up on:

1. Intl Sein Co. Ltd Korea

2. Hamdau & Ghaleb Toome Co. Syria

3. Nutric Co Indonesia

4. ZTE.

(D) Investment opportunities

New information on the countrys investment opportunities prepared for potential investors on SME businesses during the period under review and included:

1. Poultry farming

2. Beekeeping

3. Micro concrete roofing tiles

4. Fisheries (fish farming)

5. Cement block making (Solid Minerals)

(E) Collaborations with other International Agencies

The department had useful collaborations with the following agencies:

Sponsorship of WAIPAS workshop by pro-invest leading to the formation of AIPAWAS (Association of the West African Investment Promotion Agencies.)

Delegate program to UK by UNIDO.

Project identification/profiling exercise-UNIDO.

7.2DEPARTMENT OF INVESTOR RELATIONS.

The Department of Investor Relations (IR) provided pre-investment and after care services to prospective and existing investors.

The main objective of the Investor Relations Department include the provision of efficient support and after care services to prospective and existing investors and keep records of all foreign direct investment inflow into the country;

7.2.1Functions

Develop detailed strategies and work plans for the provision of proactive and responsive investor services;

Build and maintain relationships with Nigerian embassies abroad and Commercial Counselors of foreign missions in Nigeria, to identify investor needs and facilitate site visits for prospective investor.

Organise and participate in incoming investment missions, seminars and workshops;

Identify and periodically review viable investment and business

Coordinate all matchmaking services and arrange business meetings between local and international investors interested in forming joint ventures;

Assist investors to locate in Nigeria- site selection analysis;

Coordinate registration of foreign investors and the delivery of the information to the Information Management Division;

Facilitates the processing and timely delivery of government permits and sector- specific incentives;

Carryout any other functions that may be assigned to the department by the Chief Executive Officer.

7.2.3ACTIVITIES OF THE DEPARTMENT

7.2.3.1 Grant of Pioneer Status Incentives

In the year under review, a total of 20 Pioneer Status approvals were granted to deserving companies, as compared to 13 in 2003 and 24 in 2002. Amongst the total approval granted in 2004, the manufacturing Sector accounted for 7, Solid Mineral 1, Communication sector 4, Agro / Agro Allied 4, Infrastructure 2 and Oil & Gas sector 2.

7.2.3.2NIPC Registration/grant of Business Permit

In year 2004, the Department registered a total of 63 new investments out of which 5 came from Oil and Gas, 4 from Engineering/Constructions, 18 from Manufacturing, 18 from Services, 5 from the Communications sector, 7 from Agro/Agro Allied, 3 each from Pharmaceuticals and the Transport sector. These investments brought in a total sum of $96.34 million byway of foreign capital injections, with the Oil & Gas sector accounting for the largest chunk of $88.57 million.

7.2.3.3 Grant of Expatriate Quota Position

The Department, in conjunction with Immigration Desk, facilitated the grant of Expatriate Quota positions. In the year under review, the Desk granted a total of 255 Quota positions to 31 companies as compared to three hundred and ninety (390) positions granted to seventy-six companies in year 2003; and three hundred and twenty one positions granted to eighty companies in year 2002.

Table 7.2.3.1: PIONEER STATUS GRANTED TO COMPANIES in 2004 (Source: NIPC Records)

S/NO

NAME / ADDRESS OF COMPANY

LINE OF BUSINESS

TYPE OF SHARE HOLDING

FORM M VALUE

CAPITAL IMPORTATION IN USD

EQUITY / LEVEL OF INVESTMENT

(IN NAIRA)

EMPLOYMENT

GENERATIONSECTOR /REGION

COMMENTS

1.

Haruna Holistics

Bishop Haruna House, No. 8 Ogamiana Road

Okene, Kogi State

Quarrying and processing of Marble & Granite

Wholly Nigerian

$21,150.00

@

N2,686,050.00

-

N5 Million

(Equity)

N 12, 500, 000. 00

300

Solid Mineral / Africa

100% Indigenous Company

2.

Integrated dairy farms limited

1Ffriesland Road Vom-jos,plateau State.

Dairy farming and processing of fresh milk.

Wholly Nigerian

-

-

N 235, 000, 000. 00

146

Agriculture / agro-allied / Africa

100% Indigenous Company

3.

Sun-Flag Steel Nigeria Limited

37/38 Iganmu Industrial estate Off Eric Moore Road, Surulere, Lagos.

Manufacture of Iron rods

Joint Venture

Indians / Nigerian

-

$1,499,973.00

@

205,196,371.20

N1, 225,000,000. 00

150

Manufacturing / Asia

4.

Gas-Link (Nigeria) Limited

Block A Motorways center, 1st Floor Motorways Avenue Alausa, Ikeja, Lagos

Gas utility and independent power plant

Wholly Nigerian

$5,729,510.38

@

N660,241,104.58

-

N1, 250, 000, 000. 00

60

Infrastructure

(Power) / Africa

100% Indigenous Company

5.

BAT Iseyin Agronomy Limited

Plot PC 35 Idowu Taylor Street Victoria Island,Lagos

Cultivation, processing and preservation of food crops and trees

Joint Venture

British / Nigerian

-

-

N1,500,000.00

(Equity)

N2, 260,000,000. 00

52

Agro / Agro allied / Europe

No evidence of Capital Importation in file.

6.

Formosa Bottling Company Limited

6E Idejo Street, off Adeola Oderu, Victoria Island, Lagos

Production and bottling of fruit juice drinks and soft drinks

Wholly Nigerian

-

-

N100 Million

(Equity)

N 929, 000, 000. 00

730

Manufacturing / Asia

100% Indigenous Company

7.

Kotco Power Limited

Plot 102, Isheri road, Ojodu, Ikeja, Lagos

Manufacturing and refurbishment of Power and distribution of transformers

Joint Venture

Indian / Nigerian

-

$839,552.00

N270,000,000.00

(Equity)

N 260, 000, 000. 00

59

Infrastructure Power /Asia

Already captured under Business Permit Analysis

8.

Ehkay Corrugated Cartons Limited

2-10 Taiwo street Off Ogudu Road, Ojota Lagos

Manufacturing of paper pulp/paper)

Joint Venture

Indians / Nigerian

$326,606.00

@

N37,489,935.60

-

N85 Million

(Equity)

N167,000,000.00

140

Manufacturing / Asia

Inspection report stated an increase in share capital to N85m, but no documentary evidence in file.

9.

African Steel Mills Limited

Plot 337, Ikorodu Industrial Estate, Odugoyan, ikorodu, Lagos

Manufacture of Iron Rods

Joint Venture

Indians / Nigerians

$6,989,424.71 @

N901,985,258.83

$505,164.08

@

N68, 276,276.93

N20 Million

(Equity)

N 1, 200, 000, 000. 00

500

Manufacturing

/ Asia

10

Apex African Gas Limited

10 Abebe Village Road, Iganmu, Lagos

Production and manufacture of various types of Industrial gases

Wholly Foreign

Labanese

$1,581,525.40

@

N210,888,788.36

-

N100 Million

(Equity)

N 491, 550, 000. 00

100

Oil & Gas / Middle East

No evidence of Capital Importation in file.

11

Superbru limited

AgbarhaOtor,Ughelli,

Delta State

Processing of Sorghum to sorghum juice

Joint Venture

French / Indians / Nigerian

-

$500,000.00

@

N64, 750,000.00

N 400,000,000. 00