Construction and infrastructure projects are perfect avenues for making use of the country’s large population, it is by no means the only industry which stands to benefit from the sheer size of potential labour and customers on offer.
Business as part of man's activities thrives in a conducive and sustainable environment which in turn depends on the availability of infrastructure put in place by the government.
Nigeria, enjoying a good socio-economic profile among the comity of nations is a country abundantly blessed with oil resources, flora and fauna is a federation of thirty-six (36) states and a federal capital territory. Named by a British young lady, Dame Flora Louisa Shaw, Nigeria gained independence from the British Empire fifty-eight years ago with boundless optimism, splendour, and spectacle. Being the largest economy in Africa with a substantial growth rate, Nigeria stands as the prime investment destination of the 21st century.
Over the years, Nigeria, like other developing countries, has adopted a private sector-led growth with emphasis on policies that will promote investment and industrial development. The country has endlessly experienced justifiable economic growth judging by the year-by-year increase in Gross Domestic Product (GDP). From 2001 onwards, there has been extraordinary improvement prompted by favourable government policies on manufacturing geared towards autonomy, employment generation, and export promotion. Remarked as the third fastest emerging economy in the world after China and India, Nigeria is also a member of Commonwealth Nations.
Investment opportunities in Nigeria expand to sectors like agribusiness, power, solid mineral, health-care, the automotive sector, and business process outsourcing etc. Some of them are mentioned below.
Being a fast-growing middle-class economy, Nigeria definitely is a lovely choice for the automotive sector. In order to exploit the potential of the automotive sector, the Nigerian government in 2013 announced a new national automotive policy, the National Automotive Industry Development Plan (NAIDP), which seeks to discourage vehicle importation and stimulate local production. The National Automotive Design and Development Council (NADDC) seek to ensure the well-timed application of the provisions of the policy as part of its mandate to rejuvenate the auto industry.
The investment incentives include Pioneer Status (tax holiday) granted for 3 years and renewable for the next two years, 100 percent repatriation of profit net of taxes, unrestricted Capital allowance granted in full (100 percent), and Investment Promotion and Protection Agreement which helps to guarantee the safety of investment of the contracting parties in the event of war, revolution, expropriation, or nationalisation.
Business Process Outsourcing
In January 2007, the Federal Government launched the National Outsourcing Policy to promote an outstanding orientation starting with on-shore outsourcing and progressing through near shore to off-shore outsourcing by encouraging stakeholders involvement in developing a vibrant outsourcing sub-sector; to grow Nigeria’s image internationally as the preferred outsourcing destination and ICT business hub by developing a global competitive Information Technology enabled services sector; and to facilitate the development of appropriate ICT infrastructure to support capacity building for quality service delivery in the outsourcing sector.
There are international and local opportunities for investment in Business Process Outsourcing. Large companies in Europe and North America, across multiple sectors are constantly seeking lower cost alternative solutions for their business needs, which is estimated to be an approximately $500 billion market.
Also, a number of companies in the public sector, financial sector, hospitality and travel, healthcare, telecommunications, oil and gas, and retail in Nigeria have also begun to invest in Business Process Outsourcing alternatives. Apart from that, with the recent economic downturn, more firms in Nigeria, especially in the oil sector, are trying to cut operating costs by outsourcing some non-core business activities. The labour cost in Nigeria is very low as compared to other countries with a huge population of educated unemployed youth.
Incentives granted by the government in the Business Process Outsourcing (BPO) sector include Pioneer Status, Tax Relief for Research and Development, Minimum Local Raw Material Utilization, Investment Promotion and Protection Agreement (IPPA), Capital Allowance and Local Value Added.
Presence of Indian Businesses in Nigeria
The consensual relationship between Nigeria and India was established 60 years back starting with the trade relationships. Since the refurbishment of democracy in Nigeria in 1998-99, its trade with India has increased substantially — climbing from $293.71 million in 1999-00 to $875 million in 2005-06. As of 2007, the value of non-oil bilateral trade was estimated between $6-7.9 billion, which soared to approximately $12 billion in 2016. Indian companies have invested profoundly in Nigeria in manufacturing, pharmaceuticals, plastics, engineering, information technology, and communications. More than 100 companies, including some huge Indian set-ups, are currently operating in Nigeria owing to the enormous market scope. Some of the prominent names are Birla Cement (as New Chline), Stallion Group, PARCO Indian Group, Anand Dairy Farming, NIPCO, African Industries Group, Shapoorji Pallonji, Jawa International Limited, Godrej Nigeria Limited, Srei Infrastructure, Dabur, Bharti Airtel, Tata Group, Bajaj Auto, New India Assurance, Kewalram Group, Bhojwani Brothers Nig. Ltd., Bhojsons & Co. Nig.Plc, Essar Group, State Bank of India (in form of 8.6 percent share in Sterling Bank), Skipper T&D Corp., Simba Group, Ranbaxy, Churchgate Group, Enkay Indo-Nigeria Ltd., Dr. Hassan’s Hospital, Pearl International, Primus Super-speciality Hospital, Vedic Life Healthcare, NIIT Nigeria Ltd., APTECH Software Technology Park Ltd., etc. Several collective projects are also running in line for further solidification of Indo-Nigerian ties.
In conclusion, the business environment in the recent years in Nigeria has been robust and promising with new government policies to attract foreign investors. Nigeria-India relations have strengthened owing to trade relation between the two nations. With the multiplicity of linkages and interactions between companies, and economic governance institutions, the scope of flow of capital promises to continue widening.