The Chairman of Lead Advisory Partners, Prince Abimbola Olashore has restated the underlying strengths and long-term potential of the Nigerian economy, despite the prevailing challenges and inadequate stimulation of the productive sectors of the economy.
In his x-ray of the Nigerian Economy to a global audience at the recent WCF Forum in Davos Switzerland, Prince Olashore rated Nigeria still as one of the fastest growing countries in the world with the largest economy in Africa and 23rd largest in the world.
“The Nigerian economy has grown on the average of about 6% per annum over a 10 year period. Though the economy has slowed down in the last 18 months as the adverse effect of the drop in oil prices is taking root, Nigeria has a far more diversified economy than people realise. It has a lot of untapped potentials, well established democracy, a firm rule of law and an authentic and sustained fight against corruption is taking roots. And even with the upheavals from the foreign exchange rates and the rising cost of certain imported good, Nigeria remains a strong emerging marker with low dangling fruits.”
Despite our seeming over dependence on Oil and Gas, that sector is only about 12% of the Nigeria’s GDP with yet ample opportunities in solid minerals, infrastructure and also in the service sector. He reiterated that the Federal Government of Nigeria has provided many investment opportunities in many sectors of business, some of which are, Manufacturing, Coal, Tourism, Energy Sector, Telecommunications, Export incentives, and Export Adjustment Fund Scheme, among others.
Giving a careful breakdown of the Nigerian Government’s investment in the economy, he highlighted that the government has given industrial incentives to industries with locally sourced raw materials, industries with support on food production programmes through local manufacture of chemicals, equipment and light commercial vehicles, industries with multiplier effects such as flat sheet mills and machine tools industry including foundries and engineering industries for spares parts, investment in research in research institutes particularly in the area of adaptive research institutes and commercialisation of local inventions.
He explained that the Nigerian Government also welcomes investors in areas such as the Coal, Gemstone cutting and polishing, Gold processing, Mineral benefaction plants for gypsum talc, kaolin, marble, dolomite, barite, Lead and zinc, Processing of salt from sea water, Small and medium-scale plant for sheet metal production, and Bottled mineral water.
He further pointed out that all areas of investment in the energy sector are considered to be pioneer product or industry, and as a result, there is a tax holiday of 5 to 7 years for investments in the sector. There has been a deregulation of this sector resulting in the emergence of Independent Power Producers (IPP) that will soon start operation in Nigeria.
“In the telecommunications sector, Government provides non-fiscal incentives to private investors in addition to a tariff structure that ensure that investors recover their investment over a reasonable period of time, bearing in mind the need for differential tariffs between urban and rural areas. Rebate and tax relief are provided for the local manufacture of telecommunications equipment and provision of telecommunication services.
“Export proceeds can also be retained in foreign currency in a domiciliary account with any authorized bank in Nigeria. A special export development fund has been set up by the government to provide financial assistance to private sector exporting companies to cover a part of their initial expenses in some export promotion activities, including training courses, symposia, seminars and workshops, export market research, advertising and publicity campaigns in foreign markets, trade missions, and other items.
There is also an export adjustment fund scheme which serves as supplementary export subsidy to compensate exporters for the high cost of local production arising mainly from infrastructural deficiencies, and other negative factors beyond the control of the exporter.
“Calabar in Cross River State of Nigeria has been designated as the primary Export Processing Zone (EPZ) territory in Nigeria. Incentives within the territory include tax holiday relief, unrestricted remittance of profits and dividends earned by foreign investors; no import or export licenses are required, up to 100% foreign ownership of enterprises sale of up to 25% of production is permitted in domestic market, amongst others.
All exports under the Nigerian value added tax (VAT) system are zero-rated and dividends received from investment in export-oriented businesses are to be free of tax”
He assured the international delegates in Davos Switzerland that “Lead Advisory Partners is able to welcome and work with foreign investors in the Nigerian economy.
As you know, if you want to operate in any foreign economy, you need local knowledge. You must understand the norms, you must also have the understanding of the laws that are applicable in the economy. We are able to work with investors by communicating their intentions so that they can be differentiated in the market place and more especially we are able to work with investors in executing their plans”.
Lead Advisory Lead Advisory Partners is a specialised consultancy providing in-depth strategy, top level advise and sound execution guidelines to discerning corporate clients in Nigeria. It is the first ever strategic partner from Nigeria, to the Davos Switzerland WCF Forum.