INTRODUCTION
Given Nigeria’s vast human and natural resources (which position her as a frontier market and potential investment haven) and against the background of the recent rebasing of her GDP (which resulted in her emergence as Africa’s largest economy), Nigeria should ordinarily not be rated among countries with low competitiveness. However, the World Economic Forum Global Competitiveness Report 2014–2015 placed Nigeria in the 127th position out of the 144 countries rated. This is the case, notwithstanding an array of investment incentives put in place by the Nigerian government in order to engender competitiveness and attract investments.
This article presents an overview of some of the various investment incentives available in Nigeria and the legal framework underpinning such investment incentives.
BASIC CONSIDERATIONS
In conceptualizing and formulating incentive packages, the Nigerian government has largely been
driven and guided by a number of key considerations including the following:
- Support for infant industries;
- Encouragement of investment in industries which have potential multiplier effects on the growth of the economy, including but not limited to employment generation & manpower development;
- Promotion of non-oil exports, with potential attendant positive impact on foreign exchange earnings; and
- Local Content Development.
FORMS OF INCENTIVES
In Nigeria, some of the various investment incentives provided under the relevant laws and regulations include tax holidays; tax credits; capital allowances; investment allowances; tax exemptions; duty drawback; subsidies; export expansion grants; export development funds; double taxation reliefs; and investment promotion and protection agreements, among others.
LEGAL FRAMEWORK
One of the key legislation enacted for the purpose of encouraging enterprises in Nigeria is the Nigerian Investment Promotion Commission Act (“NIPC Act”), 1995 (Cap N117, Laws of the Federation of Nigeria (“LFN”) 2004). The Nigerian Investment Promotion Commission (the “NIPC”) is established by the NIPC Act as the agency of the Federal Government of Nigeria charged with the duties of encouraging and promoting investment in the Nigerian economy and for other related matters (See
generally Section 4 of the NIPC Act).
