Doing Business in Nigeria

Lagos Tafawa Balewa Square

Introduction
Welcome to the One-Stop Investment Platform, your first point of call for Renewable Energy and Energy Investments in Nigeria.
The platform will support you in your search for information on Nigeria as your business destination, alongside market intelligence on the country’s renewable energy and energy efficiency sectors.

Here investors can find information that will allow them to familiarise themselves with Nigeria as an ambitious country with substantial growth potential.
Find out interesting facts about the country, and learn what you should consider when building up your business so as to maximise its success.

Sections

Socio-Economic Context

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Official name: Federal Republic of Nigeria

Area: 923,768 km²

Population: 140 million (2006 census), 206 million (2020 estimate)

Population growth: 2.58 % per year (2019)

Seat of government: Abuja

Official language: English

Regional languages: Hausa, Yoruba, Igbo, and about 400 other languages

GDP: 448.10 billion (2019)

Per capita income (purchasing power parity): 5,980 US$ (2019 estimate)

Human Development Index (HDI): Rank 158 of 189 (2019)

Proportion below income poverty line (under US$1.90 per day): 53.5% (2019)

Employment to population ratio (% ages 15 and older): 51.9% (2019)

Distribution of income (Gini coefficient): 43,0 (2019)

Bertelsmann Transformation Index (BTI): Rank 111 of 137 (2020)

Doing Business Ranking: 131 of 190 (2020)

Nigeria’s Population

With a population of approximately 206 million inhabitants and an average annual growth rate of 2.58%, Nigeria is considered the most populous country in Africa, and represents almost half of the total population of West Africa. In addition, Nigeria is home to more than 250 ethnic groups and one of the world’s largest youth populations; roughly 65% are younger than 25 years. 
About 45% (2018) of the Nigerian population live in rural areas, where the majority of them are engaged in agriculture. The distribution of the population varies between the north and the south of the country. The most densely populated areas are the south and southwest of the country. Here most people live in the large cities of Lagos, Kano, Ibadan, Benin City, and Port Harcourt. The north of the country is sparsely populated, with the exception of the greater Kano area, Zaria, and Kaduna.
The proportion of the county’s urban population is constantly increasing. Lagos is the second-largest city on the African continent – one of the world’s “megacities”, with a population of around 14 million. The city has the highest population density in the country. Until 1991, Lagos was the capital of Nigeria and was then replaced by Abuja, the “Federal Capital Territory” in the centre of Nigeria. The population of Abuja is about 1.6 million. 

The Nigerian Economy

Nigeria achieved lower-middle-income status in 2014. 

The country’s economy has become the largest in Africa, and Nigeria is among the world’s top exporters of crude oil and natural gas. The volatility of the price of oil continues to influence Nigeria’s growth performance. While Nigeria’s gross domestic product (GDP) grew at an average rate of 7% per year between 2000 and 2014, economic growth has remained subdued since 2015. 

In view of the challenge of diversifying the country’s economy, the Nigerian government is committed to making the country more business-friendly in all areas. Improving the business environment is essential for private sector-driven growth, and this is a high political priority. Providing the foundation for economic diversification and growth requires a reliable infrastructure, and energy supply plays a key role in this.

The World Bank Doing Business Index ranks Nigeria 131 out of 190 countries – a move of 15 places upwards from 146th position in the 2019 report. For the second time, the report names Nigeria as one of the top ten countries with the most notable improvements during the review period. Nigeria improved significantly in the “starting a business, dealing with construction permits, getting electricity, registering property, trading across borders, and enforcing contracts” indices.

The banking sector has been one of the growth engines of the Nigerian economy in recent years. The telecommunications sector is the second sector in which the reform policy has led to success. The telecommunications market in Nigeria is one of the most dynamic in the world; Nigeria has around 167 million mobile phone connections. Mark Zuckerberg (Facebook) called Nigeria “the future Silicon Valley” because of its distinctive entrepreneurial culture of innovation and development.

Nigerian Business Etiquette

Due to its more than 250 ethnic groups, Nigeria is a country with a great diversity of languages. More than 400 languages and well over 1,000 dialects are spoken. English is now considered the unifying language, and the official language of the country. Therefore, foreign businesspeople can conduct their business in English throughout Nigeria. 

Further languages of communication are Hausa, Yoruba, and Igbo, the languages of the three main ethnic groups in the respective regions, as well as Pidgin or Naijá (Nigerian Pidgin), a mixed language of English and various national languages in the conurbations of Nigeria.

Nigerians are very polite people who address their business partners with great respect. Do not be surprised if you are addressed as “Sir” or “Madam”. More informal terms of respect are “Oga” (Boss).

The keys to successful business interactions in Nigeria are adaptability, flexibility, and patience. Establishing personal relationships is important, with the introductory section of meetings often lasting more than an hour. Business conversations often extend to conversations about family, hobbies, and other interests. This is an important part of meetings, and it is worth it in every respect. As you have found business partners in Nigeria, you have also made friends.

Shaking hands is very important, and it is common to exchange a handshake with everyone you meet. This applies to times without a dangerous virus making its rounds through the world.

Status of Women in the Business World

In 1999, the Nigerian constitution guaranteed gender equality. However, significant steps are needed to further implement this in all areas of life. According to the National Policy on Women (2002), the proportion of women in parliament is to be increased by 30%. In the 2019 parliamentary elections, only seven female senators out of a total of 109 were elected to the Nigerian Senate. 

One in five households is headed by a woman. Nigerian women are self-confident and modern, and a large number of women’s organisations are committed to driving progress in gender equality in Nigeria.

You will meet highly qualified, committed female business partners in Nigeria in technical and other areas. Female business partners from abroad are as welcome in Nigeria as their male colleagues.

Labour in Nigeria

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The Nigerian labour market is very flexible, with a large number of qualified and motivated workers at low labour costs. The service providers in the RE/EE sector are generally qualified and experienced professionals who are committed and loyal to their clients. Nigerian employees are known for their willingness to learn and their commitment to improvement – both in production and service. 

“Self-managed teams” are very popular in the Nigerian economy: a typical team carries out all its planning itself to achieve its goals, with minimal intervention from management. 

Land Acquisition

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A foreign investor cannot acquire land in Nigeria. He/she will need to partner with a Nigerian to establish a company before land can be allocated.

In states, land registration and administration procedures are undertaken by the Land Use and Allocation Committees (for urban land) and Land Allocation Advisory Committees (for non-urban land). In the Federal Capital Territory (Abuja), the Department of Land Administration under the Federal Capital Territory Administration (FCTA) is the responsible authority. 

Land application and allocation procedures vary from state to state.

Industrial Zones

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The Nigeria Export Processing Zones Authority (NEPZA) is responsible for establishing, licensing, regulating, and operating “Free Zones” by providing a competitive incentive scheme, excellent support facilities, and service to create an enabling environment for export manufacturing and other commercial activities.

Active Free Zones by State

 

State

Free Zone

Adamawa State

Sebore Farms EPZ

Akwa Ibom State 

ALSCON EPZ

Cross River State 

Calabar Free Trade Zone (CFTZ)

Enugu State 

Enpower Free Trade Zone

FCT 

Centenary Economic City

Abuja Technology Village Free Zone

Newrest Airline Service & Logistic FTZ

Jigawa State 

Maigatari Border Free Zone 

Kano

Kano Free Trade Zone (KFTZ)

Lagos State 

Newrest Airline Services & Logistic EPZ

Dangote Industries Free Zone

Ladol Free Zone

Lagos Free Trade Zone

Lekki Free Zone

Nigeria Aviation Handling Company (NAHCO)

Nigeria International Commerce City (Eko Atlantic)

Snake Island Integrated Free Zone

Tomaro Industrial Park

Quits Aviation Services FZ

Pan African Catering Services FZE

NASCO FZ

Alaro City Lekki Free Zone

Ogun State

Ogun Guangdong Free Trade Zone

Contact details for the Free Zones can be obtained from the NEPZA website.

 

Active Free Zones by State
© GIZ/2019 Nigeria Export Processing Zones Authority, Active Free Zones by State, Source: https://www.nepza.gov.ng/index.php/free-zone/active-free-zones

 

Policy and Regulatory Framework

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Political Situation

Nigeria is a multi-ethnic and culturally diverse federation that consists of 36 states and the Federal Capital Territory. The states are organized into the following six geopolitical zones: 

South-West Zone Lagos, Ekiti, Ogun, Ondo, Oshun, and Oyo
South-South Zone Akwa-Ibom, Bayelsa, Cross River, Delta, Edo, and Rivers
South-East Zone Abia, Anambra, Ebonyi, Enugu, and Imo
North-West Zone Kaduna, Kano, Katsina, Jigawa, Kebbi, Sokoto, and Zamfara
North-Central Zone Benue, Kogi, Kwara, Nassarawa, Niger, and Plateau
North-East Zone Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe

The 36 states have 774 districts consisting of 768 Local Government Areas (LGAs) as municipal administrative units and the Federal Capital Territory Abuja (FCT) with six district councils. Each of the 36 states is governed by a government headed by a State Governor and a State House of Assembly. The local government councils, which are regarded as the third tier of government below the federal and state levels, receive monthly subsidies from a national “federation account”.

Learn more about the states at NIPC.

Political System

British influence and control over what was to become Nigeria – and the most populous country in Africa – grew in the 19th century, and a series of constitutions after the Second World War granted Nigeria greater autonomy. After independence in 1960, politics was characterised by coups d’état and mostly military rule until the death of a military head of state in 1998 allowed for a political transition. 

In 1999, a new constitution was adopted and a peaceful transition to a civilian government took place. The government still faces the enormous task of institutionalising democracy and reforming an oil-based economy whose revenues have been squandered by corruption and mismanagement. Also, long-standing ethnic and religious tensions persist in Nigeria. Although both the 2003 and 2007 presidential elections were marked by significant irregularities and violence, Nigeria is currently experiencing the longest period of civilian rule since its independence. The 2007 general elections marked the first civilian change of power in the country’s history, and the 2011 elections were generally considered credible. The 2015 general elections were a watershed moment in the political history of Nigeria, as the presidential election led to the defeat of an incumbent party that had been in power since 1999. 

Modelled on the United States Constitution, the Nigerian Constitution provides for a separation of powers between a strong executive, an elected legislature, and an independent judiciary. Critics of the Constitution argue that the federal government retains too much power at the expense of the states. Although the constitution proclaims personal freedom and a secular state, it also allows Muslims to follow Sharia (Islamic) law.

Current Government

National elections were held in 2019, for the sixth consecutive time since Nigeria’s return to democracy in 1999. The incumbent president, Muhammadu Buhari won the elections, and was sworn in for a second term on May 29, 2019. He has identified fighting corruption, increasing security, tackling unemployment, diversifying the economy, enhancing climate resilience, and boosting the living standards of Nigerians as the main policy priorities that his government seeks to continue to pursue in his second term up till 2023. 

Judicial and Legal System

Nigeria’s legal system is based on a combination of statutory (legislative) law, English common law, customary law, and, in the north, Islamic law (Sharia). Nigeria’s federal and state courts apply statutory and English common law, whereas local courts recognise the legitimacy of customary and Islamic law. The deficiencies in the existing legal and the criminal justice system partially explain the popularity of Islamic law in the 12 northern states. Sharia is criticised for the imposition of draconian penalties, although no death penalties have so far been carried out based on Sharia law.

Protection of Industrial Investment and International Trade Business

Nigeria’s membership in the World Bank’s Multilateral Investment Guarantee Agency and the application of the Bilateral Investment Promotion and Protection Agreement between Nigeria and all interested countries ensure adequate protection of foreign investments in Nigeria. The instruments of the Patent and Design Decree of 1970 provide protection and transferability of shares of co-owners of a patent or design registered in Nigeria, while the Trademark Act of 1956 protects the exclusivity rights of the owner of a trademark.

Investment Policy

The Nigerian Investment Promotion Decree of 1995 abolished all quantitative and qualitative barriers to free investment in the country, especially for foreign investors. Foreign investors can buy an unlimited number of shares in listed companies through the Nigerian Stock Exchange in any currency eligible for cover, and 100% equity participation in companies is also permitted. 

The decree established the Nigerian Investment Promotion Commission (NIPC) as a one-stop-shop to facilitate the realisation of investments, and to enable investors to access profitable business opportunities and obtain the necessary pre-investment permits.

The Nigerian government has introduced several incentives to attract foreign investors. These include a favourable company income tax, Pioneer Status grants, Free Trade Zones, and tax relief for research and development. Investors can also repatriate 100% of profits and dividends, while full ownership of companies is granted in all sectors apart from oil and gas.

The Nigerian Investment Promotion Commission Act, Cap N117, LFN 2004 (NIPC Act) established the Nigerian Investment Promotion Commission (NIPC) which is the principal government agency responsible for promoting and coordinating foreign investment in Nigeria. All Nigerian companies with foreign equity participation are required to register with the NIPC and obtain a certificate of company with foreign participation. The Federal Ministry of the Interior is responsible for issuing the other main foreign investment approvals that companies with foreign shareholders who wish to do business in Nigeria and/or employ expatriate personnel are required to obtain before commencing business in Nigeria. 

Foreign investors are guaranteed access to the authorised foreign exchange market to repatriate dividends, interest payment on loans, returns on capital upon divestment, and the proceeds of judgment debts, subject to obtaining – at the time of their investment in Nigeria – a document called a Certificate of Capital Importation (CCI).

Economic Recovery and Growth Plan 2017–2020 (EGRP)

The Economic Recovery and Growth Plan (ERGP), a medium-term plan for 2017–2020, has been developed to restore economic growth while leveraging the ingenuity and resilience of the Nigerian people. The EGRP is consistent with the aspirations of the Sustainable Development Goals (SDGs).

EGRP builds on existing sectoral strategies and plans such as the Strategic Investment Plan (SIP), the National Industrial Revolution Plan (NIRP), and the Nigeria Integrated Infrastructure Master Plan (NIIMP).

EGRP is innovative in that it signals a changing relationship between the public and private sectors, based on a close partnership. In implementing the plan, the government will closely collaborate with businesses to deepen their investments in the agriculture, power, manufacturing, solid minerals, and services sectors, and support the private sector in becoming the engine of national growth and development. 

The key priorities are:
  • Stabilizing the macroeconomic environment
  • Achieving agriculture and food security
  • Ensuring energy sufficiency (power and petroleum products)
  • Improving transportation infrastructure
  • Driving industrialisation, focusing on small- and medium-scale enterprises

The EGRP outlines new initiatives, such as ramping up oil production to 2.5 million barrels per day by 2020, privatising public enterprises and assets, and revamping refineries to reduce petroleum product imports by 60%. Other initiatives include environmental restoration projects in the Niger Delta, which demonstrate the federal government’s determination to bring environmental sustainability to the forefront of its policies. As part of this plan, oil revenues will be used to develop and diversify the economy.

Further prioritisation is given to agriculture and food security with the government’s commitment to funding social safety nets through 2020. The associated 2017 “Budget of Recovery and Growth” funds a nationwide social investment programme that focuses on job creation, home-grown school feeding, and cash transfers to vulnerable populations.

National Policy on Environment

Nigeria has committed itself to the implementation of Agenda 2030 and, within this framework, to national environmental policy. Therefore, some complementary policies, strategies, and management approaches are to be introduced to ensure, among other things:

  • Integration of environmental concerns into key economic decision-making processes
  • Consideration of environmental remediation costs in major development projects 
  • Use of economic instruments in the management of natural resources
  • Application of environmentally sound technologies

Environmental impact assessments should be carried out before the start of any major development project.

To be successful, this policy must be based on the following principles of sustainable development:

  • The precautionary principle, according to which serious or irreversible damage must be prevented; and
  • The lack of complete scientific knowledge must not be used as a reason for postponing cost-effective means of preventing environmental degradation.
Support Through International Cooperation

Nigeria is supported by the development assistance programmes of a large number of donor agencies and private foundations, such as:

  • World Bank Group
  • African Development Bank (AFDB)
  • Canadian International Development Agency (CIDA)
  • European Union (EU) 
  • French Development Agency (AFD)
  • German Agency for International Cooperation (GIZ)
  • KfW Development Bank
  • International Monetary Fund (IMF)
  • Islamic Development Bank (IsDB)
  • Japan International Cooperation Agency (JICA)
  • United Kingdom Foreign, Commonwealth and Development Office (FCDO)
  • United States Agency for International Development (USAID)
  • Bill & Melinda Gates Foundation
  • Agencies of the United Nations (UNDP, UNICEF, FAO)
Membership in International Organizations:
  • Organisation of African, Caribbean and Pacific States (ACP)
  • African Continental Free Trade Area Agreement (AfCFTA) (Nigeria signed the AfCFTA on 7 July 2019 but has not yet ratified it, the AfCFTA entered into force on 30 May 2019)
  • African Development Bank (AFDB)
  • African Union (AU)
  • Commonwealth of Nations
  • Community of the Sahel-Saharan States (CEN-SAD)
  • Economic Community of West African States (ECOWAS)
  • Food and Agriculture Organization of the United Nations (FAO)
  • Group of 15 (G-15)
  • Group of 24 (G-24)
  • Group of 77 (G77)
  • International Atomic Energy Agency (IAEA)
  • International Bank for Reconstruction and Development (IBRD)
  • International Chamber of Commerce (ICC)
  • International Civil Aviation Organization (ICAO)
  • International Confederation of Free Trade Unions (ICFTU)
  • International Criminal Court (ICC)
  • International Criminal Police Organization (INTERPOL)
  • International Development Association (IDA)
  • International Finance Corporation (IFC)
  • International Fund for Agricultural Development (IFAD)
  • International Hydrographic Organization (IHO)
  • International Labour Organization (ILO)
  • International Olympic Committee (IOC)
  • International Maritime Organization (IMO)
  • International Monetary Fund (IMF)
  • International Organization for Migration (IOM)
  • International Organization for Standardization (ISO)
  • International Red Cross and Red Crescent Movement (ICRC)
  • International Telecommunication Union (ITU)
  • Multilateral Investment Guarantee Agency (MIGA)
  • Non-Aligned Movement (NAM)
  • Organisation for the Prohibition of Chemical Weapons (OPCW)
  • Organization of the Islamic Conference (OIC)
  • Organization of the Petroleum Exporting Countries (OPEC)
  • Permanent Court of Arbitration (PCA-CPA)
  • United Nations (UN)
  • Universal Postal Union (UPU)
  • World Customs Organization (WCO)
  • World Federation of Trade Unions (WFTU)
  • World Health Organization (WHO)
  • World Intellectual Property Organization (WIPO)
  • World Meteorological Organization (WMO)
  • World Tourism Organization (UNWTO)
  • World Trade Organization (WTO)
Major International Treaties:

Nigeria is a party to the following non-proliferation agreements: 

  • Biological Weapons Convention (BWC)
  • Chemical Weapons Convention (OPCW)
  • Nuclear Non-Proliferation Treaty (NPT)
  • Partial Test Ban Treaty (PTBT)

Regarding the environment, Nigeria is a party to the following agreements: 

  • Biodiversity
  • Climate Change
  • Desertification
  • Endangered Species
  • Hazardous Wastes
  • Kyoto Protocol
  • Law of the Sea
  • Marine Dumping
  • Marine Life Conservation
  • Ozone Layer Protection
  • Wetlands

Shortly after 11 September 2001, Nigeria ratified a Mutual Legal Assistance Treaty with the United States. The treaty, whose ratification had been held up for 12 years, includes provisions for cooperation on anticrime, antidrug, and counter-terrorism initiatives. On the basis of this treaty, Nigeria closed its borders with neighbouring countries in 2019 to prevent terrorism from entering the country.

 

Starting a Business

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Below you will find a brief overview of important rules and regulations to take into account when starting a business in Nigeria.

Enlisting a lawyer helps foreign investors to quickly familiarise themselves with local conditions in Nigeria, and to find the best way for their investment project. Particular attention should also be paid to bribery regulations in the investor’s home country.

It is also advisable to involve the national investment authority, the Nigerian Investment Promotion Commission (NIPC), at an early stage. NIPC offers a detailed guide for starting a business in Nigeria, and has established a One-Stop-Investment Centre (OSIC) for investors.

Legal Company Forms

There are four types of companies recognised for doing business in Nigeria:

1. Private Limited Liability Company (LTD): This is the most common form of business set up by investors. It requires a minimum share capital of ₦10, 000. An LTD is a legal entity in its own right, separate from those who own it. Such a company requires a minimum of two (2) and a maximum of fifty (50) shareholders and directors. It is restricted from transferring its shares freely and prohibited from inviting the public to subscribe to its shares, debentures, and/or deposit money for fixed periods or payable at call, whether or not bearing interest.

2. Public Limited Liability Company (PLC): The minimum share capital for this type of company is ₦500,000. A PLC requires a memorandum of understanding (MOU) of two (2) shareholders. There is no restriction on the maximum number of shareholders or their right to transfer their shares freely. The public may be invited to subscribe to its capital and the shares may be traded on any securities exchange.

3. Company Limited by Guarantee (GTE): Generally incorporated as a not-for-profit, this kind of company limits its members’ liability to the number of their respective guarantees.

4. Unlimited Company: This type of company has no limit on the liability of its members.

The legal basis of company law in Nigeria is the Companies and Allied Matters Act 1990, which was revised in 2004. Under this act, possible company forms include a company limited by shares, a company limited by guarantee, and an unlimited company. All three types can be established as private companies or public companies.

Registration and Permission

All companies in Nigeria must be registered with the Corporate Affairs Commission (CAC). This can be done online at the CAC’s website, in person at the CAC, or at the One-Stop Investment Centre of the Nigerian Investment Promotion Commission (NIPC). 

Exceptions to the registration requirement exist for foreign companies if:

  • They have been invited by the Nigerian government for the implementation of a specific project;
  • They carry out individual projects for a donor country or an international organisation;
  • They are a foreign state-owned enterprise and are engaged exclusively in export promotion; or
  • They are an engineering office or technical experts involved in a specific project of the Nigerian government.

Foreign companies concerned can apply for this exemption to the National Council of Ministers.

Comprehensive guidance on setting up a company is provided by the Nigerian Investment Promotion Commission and on the Corporate Affairs Commission including online application forms.

A Legal Guide for Foreign Investors is available here.

Investor Rights

The Nigerian legal system is composed of English common law, Nigerian customary law, and Islamic Law. Business transactions are governed by the common law, and modified by statutes to meet local demands and conditions.

  • The Supreme Court is the highest in the land, with original and appellate jurisdiction in certain constitutional, civil, and criminal matters prescribed in the Constitution.
  • The Court of Appeal hears appeals from the National Industrial Court, the Federal and State High Courts, the Sharia Courts of Appeal, and the Customary Courts of Appeal.
  • The Federal High Court has jurisdiction in matters connected with revenue, admiralty, banking, foreign exchange, and other currency and monetary or fiscal matters.
  • The State High Court has jurisdiction to hear and determine both civil and criminal proceedings.
  • The National Industrial Court has jurisdiction in labour and industrial relations matters.
  • The Sharia and Customary Courts of Appeal exercise jurisdiction in civil proceedings involving Sharia and customary law respectively.
  • The Magistrates’ Courts, District Courts, Area Courts, and Customary Courts all have original jurisdiction in civil and criminal matters.

Investment & Securities Act (ISA)

The Investment and Securities Act 2007 contains comprehensive provisions on matters relating to securities and investments in Nigeria. The Act regulates mergers, acquisitions, and other forms of business combinations, securities transactions, including electronic transfer of registered shares, capital market operations in all their ramifications, borrowing by states, local government, other government agencies and business entities, etc.

ISA provides for the establishment of:

  • Individual Investor Protection Funds (IPF) by securities exchanges and capital trade points, to compensate investors who suffer pecuniary loss from any defalcation committed by a member of a stock exchange and any directors/employees of capital market operators;
  • A nationwide scheme to compensate investors whose losses are not covered under the IPFs administered by securities exchanges and capital trade points; and
  • An Investment and Securities Tribunal to settle any disputes arising from the operators of capital trade points and exchanges in Nigeria.

The recognition and enforcement of judgments are governed by national law in case a bilateral agreement on the mutual recognition and enforcement of judicial decisions does not exist between the investor’s home country and the Federal Republic of Nigeria.

Investment Protection

The NIPC Act of 1995 forbids the nationalisation or expropriation of a business or assets, unless the acquisition is in the national interest or for a public purpose. In such cases, investors are entitled to fair compensation and legal redress.

Specifically, section 25 of the Act provides that:

1. Subject to subsections (2) and (3) of this section –

  • No enterprise shall be nationalised or expropriated by any Government of the Federation;
  • No person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person.

2. There shall be no acquisition of an enterprise to which this Act applies by the Federal Government unless the acquisition is in the national interest or for a public purpose and under a law which makes provision for –

  • Payment of fair and adequate compensation; and
  • A right of access to the courts for the determination of the investor’s interest or right, and the amount of compensation to which he is entitled.

3. Any compensation payable under this section shall be paid without undue delay, and authorisation for its repatriation in convertible currency shall, where applicable, be issued.

Industrial Property Rights

Industrial property rights refer to the Trade Marks Act, the Copyright Act, and the Patents and Designs Act as the main legal regulations.

For industrial property rights, businesspeople can address the Commercial Law Department at the Trademarks, Patents And Designs Registry, which is located at the Federal Ministry Of Industry, Trade And Investment. The Commercial Law Department administers the protection of trademarks, patents, and designs in Nigeria, and is committed to providing prompt and excellent service delivery according to modern technology. 

Accredited agents support you through the process of application.

Dispute Settlement

Nigeria has been a party to the Convention on the Settlement of Investment Disputes (ICSID Convention) which entered into force in 1966, and is available on the website of the International Centre for Settlement of Investment Disputes (ICSID). This enables investors to turn to the ICSID in investment disputes against states.

There is no obligation to involve a lawyer or notary public in civil law matters in court. The fee is freely negotiable in each case. The client is responsible for all costs and fees related to the mandate given. As a rule, this also applies in to successful cases. When a mandate is granted, the client must bear all costs and fees him- or herself. 

Find more on investor rights here

Finding a local partner

The easiest way to find a suitable local partner for long-term commitment is through:

  • The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA)
  • Foreign trade chambers in Nigeria
  • Local lawyers and business advisors 
  • Energy associations in Nigeria
  • The Manufacturers Association of Nigeria

Taxes

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All businesses which operate in and derive income from Nigeria are liable to pay tax. The Nigerian tax system operates a self-assessment regime that allows taxpayers to assess, pay, and file tax returns as prescribed in the extant tax laws.

Taxation in Nigeria is based on the three tiers of government, as follows:

  • The federal government, through the Federal Inland Revenue Service (FIRS), has jurisdiction over Companies Income Tax, Tertiary Education Tax, Personal Income Tax for non-residents, Capital Gains Tax (on capital gains made by companies), Value Added Tax, Petroleum Profits Tax, and Stamp Duties payable on transactions involving corporate bodies.
  • The states and the Federal Capital Territory have responsibility for collecting taxes payable by individuals who reside in their territories. These include Personal Income Tax, Capital Gains Tax, and Stamp Duties on instruments executed by individuals.
  • Local governments are responsible for miscellaneous taxes, levies, and rates, such as tenement rates.

Tax categories to be paid are summarised in the table below.

Tax

Explanation

Companies Income Tax (CIT)

(“Corporate Tax”)

Chargeable on all resident and non-resident companies (other than those engaged in petroleum operations) incorporated in Nigeria. The CIT rate is 30% of the profit earned in the year preceding assessment.

Stamp Duties

Are taxes paid to the federal or state government on documents such as Conveyances on Sale, Bills of Exchange, Promissory Notes, Agreements, Contracts, or even documents such as Letters and Certificates of Admission, Instruments of Apprenticeship, Insurance Policies, etc. 

Personal Income Tax (PIT)

Charged on the income of individuals, employees, partnerships, and incorporated trustees on the basis of residency and payable to the state government. 

Personal income tax rate is applied on a graduated scale on taxable annual income. A Consolidated Relief Allowance shall be granted at a flat rate of ₦200,000 plus 20% of gross income subject to a minimum tax of 1% of gross income, whichever is higher.

Petroleum Profit Tax

Levied on the income of companies engaged in upstream petroleum operations in lieu of CIT. Rates:

  • 50% for petroleum operations under Production Sharing Contracts (PSC) with the Nigerian National Petroleum Corporation (NNPC);
  • 65.75% for non-PSC operations, including joint ventures (JVs), in the first five years during which the company has not fully amortised all pre-production capitalised expenditure; or
  • 85% for non-PSC operations after the first five years.

Tertiary Education Tax

All resident companies are required to contribute 2% of their assessable profits to the Tertiary Education Fund. This tax is usually filed alongside the relevant tax return (PPT or CIT). For companies subject to the Petroleum Profit Tax, the Tertiary Education Tax is treated as an allowable deduction.

Non-resident companies and unincorporated entities are exempted from this tax.

Value-Added Tax

Consumption tax charged at 5% on the supply of taxable goods and services. All taxable persons are expected to obtain a VAT registration certificate and display their Tax Identification Number (TIN) on all invoices. A non-resident company carrying on business in Nigeria only needs to register for VAT using the address of its local counter-party, and include the tax on its invoice. 

Capital Gains Act

This is a 10% tax imposed on capital gains arising from a sale, exchange, or other disposals of properties known as chargeable assets. Payable by corporate entities (including pioneer companies) and individuals, this tax is jointly administered by the FIRS and State Internal Revenue Services.

Withholding Tax

This is an advance payment of income tax which is made on account of the ultimate income tax liability of the taxpayers (individuals and companies). 

 

Find more on taxes for investors here.

Tax Authority For Non-Resident Taxpayers in Nigeria

To resolve tax compliance issues, tax disputes, and double taxation, the Federal Inland Revenue Service (FIRS) has established a tax authority for non-resident taxpayers in Nigeria. The Foreign Tax Office is responsible for all matters of non-resident taxpayers, such as returns, correspondence, and inquiries.

According to FIRS, non-residents include both foreign companies under the Companies Income Tax Act and foreign residents outside Nigeria who make profits in Nigeria. The office of the Foreign Tax Office is located in the FIRS building in Lagos, Nigeria.

Further information on Nigerian tax law and online services can be accessed on the website of the Federal Inland Revenue Service (FIRS).

Customs Regulations and Operations

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When importing goods into Nigeria, numerous regulations must be observed. 

The Nigeria Trade Hub (NTH) was developed by the Nigeria Customs Service as part of its modernisation efforts to help simplify and reduce the time and cost of doing trade business in Nigeria. 

The NTH provides hands-on guidance and online services for importers and exporters. This includes information about all the Nigerian Regulatory Agencies, their contact details, processes, official documents, customs procedures, fees and processing times that an importer or exporter will need to obtain the necessary import permits and certificates that are required to ensure compliance. 

Tools of the NTH include the “Harmonised System” (HS) Code – an intuitive tool that assists the importer with the correct classification of their products for both import and export. Once the correct HS Code for an import product is obtained, the tool provides the necessary regulatory information about the product, including all relevant information. For export products, on selection of the Country of Export, the exporter is presented with the export country’s market access, information including the relevant HS Code and the rates of duty upon entry.

Customs Clearance

Customs clearance is carried out via the electronic customs clearance system Nigeria Integrated Customs Information System (NICIS), which has been developed into the Nigeria Single Window for Trade. The online portal offers a wealth of helpful information and enables import and export documents and permits to be viewed and processed by the authorities and institutions involved via a common interface. When importing goods into Nigeria, numerous regulations must be observed. 

The Nigeria Trade Hub (NTH) was developed by the Nigeria Customs Service as part of its modernisation efforts to help simplify and reduce the time and cost of doing trade business in Nigeria. 

The NTH provides hands-on guidance and online services for importers and exporters. This includes information about all the Nigerian Regulatory Agencies, their contact details, processes, official documents, customs procedures, fees, and processing times that an importer or exporter will need to obtain the necessary import permits and certificates that are required to ensure compliance. 

Tools of the NTH include the “Harmonised System” (HS) Code – an intuitive tool that assists the importer with the correct classification of their products for both import and export. Once the correct HS Code for an import product is obtained, the tool provides the necessary regulatory information about the product, including all relevant information. For export products, on selection of the Country of Export, the exporter is presented with the export country’s market access, information including the relevant HS Code and the rates of duty upon entry.

Customs Clearance

Customs clearance is carried out via the electronic customs clearance system Nigeria Integrated Customs Information System (NICIS), which has been developed into the Nigeria Single Window for Trade. The online portal offers a wealth of helpful information and enables import and export documents and permits to be viewed and processed by the authorities and institutions involved via a common interface. The use of NICIS for customs clearance requires registration at https://www.trade.gov.ng.

Business people in Nigeria must register with the Corporate Affairs Commission and the Federal Inland Revenue Service to obtain a Tax Identification Number (TIN).

Customs at the Ports

Before the import procedures can start, the importer needs to undertake the following:

  • Register the company name in Nigeria and receive a Certificate of Incorporation/Registration of the company in Nigeria.
  • Register the company with the Federal Inland Revenue Services (FIRS) with an up-to-date proof of tax payments, upon which a Tax Identification Number (TIN Number) is issued, with a valid email address linked to it.
  • Select a bank in Nigeria to act as the Authorised Dealer Bank (ADB). This is the bank that will process the Form M / Pre-Arrival Assessment Report (PAAR) and mediate between the Nigeria Customs Service (NCS), the importer, and other bodies.

Import procedures:

  1. The importer gets his/her Regulatory Certificates, e.g. the Product Certificate (PC) for items that are regulated.
  2. The importer activates the PC on the online Nigeria Single Window Trade Portal.
  3. The importer opens a Form M on the Nigeria Single Window Trade Portal, attaching the required documents, e.g. the Insurance Certificate, the proforma invoice, or the Product Certificate (when the item is regulated by SON), and submits it to the ADB.
  4. The Authorised Dealer Bank (ADB) reviews/validate the Form M and sends it to the NCS.
  5. The Nigeria Customs Service (NCS) either accepts the Form M or rejects it if it is not properly completed or is lacking some information and/or documents.
  6. Once the Form M is accepted by the NCS, the importer forwards a copy of the Form M to his/her exporter, who will in turn contact Cotecna, the international accreditation firm, with the Form M, the final invoice, the bill of lading/airway bill and the packing list, for the issuance of the SONCAP Certificate.
  7. The importer activates the SONCAP Certificate and applies for PAAR issuance on the Nigeria Single Window Trade Portal.
  8. The PAAR is issued and the importer commences the clearance of his/her goods.
  9. Shipping Company: Submission of import manifest to customs/NPA/terminal operator, brings in a vessel, pays ship charges, pays NPA charges, and issues bill of lading.
  10. Terminal Operator: Terminal handling/weighing, loading of cargo, issue bills for handling/rent, and delivers the goods.

The Nigerian Ports Authority provides a summary of import procedures and export procedures.

International Trade Agreements

International Trade Agreement

Explanation

Economic Community of West African States (ECOWAS)

The Federal Republic of Nigeria belongs to the Economic Community of West African States (ECOWAS), which was founded in 1975. The organisation aims to promote economic cooperation in the region. The long-term goal is a common internal market with free movement of persons, goods, services, and capital.

Since January 2015, the individual member states have been gradually implementing a Common External Tariff (CET) for the supply of goods from third countries. 

Within ECOWAS, the Trade Liberalisation Scheme (ETLS) provides for the largely duty-free movement of goods originating in the member states, provided they are accompanied by an ECOWAS certificate of origin from a nationally approved manufacturer. 

African Continental Free Trade Area (AfCFTA)

The AfCFTA, which all countries of the African Union except Eritrea have signed, is in force as of May 2019. The primary objective of the AfCFTA is to promote intra-African trade and further industrialisation. In the long term, the aim is to create a continental internal market with a free exchange of goods, services, labour, and capital. 90% of existing customs duties are to be abolished. The individual signatory states or Regional Economic Communities (RECs) that already form a free trade zone or customs union can designate sensitive goods and goods excluded from tariff dismantling at 7% or 3% of the total tariff lines.

Economic Partnership Agreement with the European Union (EPA)

The EU has initiated an Economic Partnership Agreement (EPA) with 16 West African states; the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU). 

Generalised Scheme of Preferences (GSP) with the European Union

Nigeria benefits from the Generalised Scheme of Preferences (GSP) of the European Union (EU), which is granted unilaterally by the EU to vulnerable developing countries. The GSP reduces EU import duties for two-thirds of all product tariff lines.

Other memberships and agreements

Nigeria is a founding member of the World Trade Organization (WTO). Nigerian-originating products are granted tariff preferences under the EU’s Generalised System of Preferences (GSP) for developing countries. The Registered Exporter (REX) procedure for certifying preferential origin applied there was introduced by Nigeria with effect from 21 March 2019.

Customs Tariff

With regard to third countries, Nigeria applies the Common External Tariff (CET) of the Economic Community of West African States (ECOWAS). The tariff is based on the international goods list of the Harmonized Commodity Description and Coding System (HS) 2017 and contains more than 6000 tariff lines.

The basis for calculating the duty is the customs value of the imported goods. In the context of a purchase transaction, this is the transaction value, i.e. the price paid or payable on the basis of CIF (Cost, Insurance and Freight) of the international delivery terms.

To promote strategic economic sectors, for example, since the current Fiscal Policy Measures came into force on 1 July 2019, certain intermediate products for the manufacture of products in the petrochemical, agrochemical, textile, and leather industries can be imported into Nigeria at reduced customs duties. Fully dismantled kits for motor vehicles continue to be duty-free to promote the development of a local assembly industry.

The Nigerian utility tariff, including VAT, excise duties, and Import Adjustment Tax (referred to as “Levy”) is available on the customs authorities’ website

All relevant tariff information is available from the website of the Nigerian customs authority (Single Window for Trade).

Additional Import Adjustment Tax/Import Levy

The government levies an Import Adjustment Tax on the import of currently 177 products (customs tariff lines), with tax rates ranging from 5% to 65%. The basis of assessment is the customs value.

Product Safety, Standards and Technical Regulations (SONCAP Procedure)

For industrial products, a Manufacturer’s Certificate of Production must be presented at the customs clearance, which contains information about the standards and technical regulations that have been observed.

All imported goods, unless covered by an exemption list or regulated by the authority NAFDAC, are subject to a conformity assessment programme of the Nigerian standards authority Standards Organisation of Nigeria (SON), which aims to prevent the manufacture and import of substandard and unsafe products in Nigeria. Regulated products are tested for compliance with existing Nigerian Industrial Standards (NIS) or international technical regulations and standards recognized by SON before shipment.

The elements of conformity assessment under SONCAP include physical inspections before shipment, sampling, tests, and analyses in accredited laboratories, audits of production processes and systems, as well as documentary verification of conformity with regulations and overall assessment of conformity with standards.

The SON Conformity Assessment Programme requires two steps:

  1. The exporter applies for a Product Certificate from a SON-accredited testing company such as SGS, Intertek, Cotecna, or Bureau Veritas. The importer needs this Product Certificate to open a Form M (import application) before sending the goods from the supplier country.
  2. The exporter applies for a Certificate of Conformity for each specific shipment. The Certificate of Conformity confirms compliance with the applicable and recognised technical regulations and standards, and is also required to obtain the SONCAP certificate from SON. The importer needs the SONCAP certificate for customs clearance.
SONCAP Certification Channels

Each shipment of good(s) or product(s) subject to SONCAP arriving at any Nigerian Port must be accompanied by a SONCAP Certificate (SC). The SONCAP procedure provides for three different certification routes, depending on the type of goods shipment (product, frequency) and exporting company (dealer, supplier, manufacturer):

  • Route A for one-off or only occasional consignments (non-registered/non-licensed products) with basic physical inspection and, if necessary, tests and analyses based on a risk assessment to produce a product certificate valid only for the respective import consignment (unregistered).
  • Route B for regular shipments of registered products from manufacturers with a successful factory audit, also possible for reliable Route A suppliers, attested by a product certificate (registered, valid for one year). About 40% of the shipments are physically inspected during loading.
  • Route C for regular shipments of licensed products from reliable Route B manufacturers with specific factory audit confirmed by a product certificate with license status (valid for one year) and physical inspection of at least two shipments per year.
Product Authentication Mark (PAM)

According to a public announcement by the standards authority, since the third quarter of 2019, the importer is obliged to affix a Product Authentication Mark (PAM) to the packaging of a finished product certified according to SONCAP. The labels, which include a QR code and security features, must be applied for from SON before the final release of the goods and affixed to the packaging before sale. Since 1 January 2020, imported finished goods without this marking may no longer be sold in Nigeria.

Excluded from SONCAP are the following product groups:

  • Food products
  • Pharmaceuticals
  • Medical devices (except devices and machines)
  • Chemicals used as raw materials for manufacturers registered as “bona fide manufacturers” with the Manufacturers Association of Nigeria (MAN)
  • Military equipment
  • Goods classified by the Nigerian Government as smuggled goods, and all prohibited goods
  • Second-hand goods (except motor vehicles)
  • Personal effects

Food and medicines are controlled by the National Agency for Food and Drug Administration and Control (NAFDAC).

Industrial Production Machinery and Equipment

Industrial production machinery and equipment, spare parts, and fully dismantled vehicles used for own production or assembly can be imported without the presentation of a SONCAP certificate, provided the importer is registered as a bona fide manufacturer with MAN and has applied to SON for a corresponding import permit.

Electrical and electronic equipment must be registered with the National Environmental Standards and Regulations Enforcement Agency (NESREA). If the required standards are met, NESREA issues a registration number, which must be indicated on the cargo manifest and the consignment note of the import shipment.

Other Import Duties and Charges 

Administrative charge: Importers pay an administrative charge of 1% of FOB value of all imports based on the exchange rate on the approved online Form M.

Import surcharge (Import Surcharge/Port Development Levy): All goods are subject to a fee of 7% of the customs duty (not customs value) on import.

Comprehensive Import Supervision Scheme (CISS Levy): A fee of 1% of the FOB (free on board) value of the imported goods is charged to cover the costs of the goods inspection.

ECOWAS levy (Trade Liberalisation Scheme/Community Levy): Imports from countries that do not belong to ECOWAS are subject to a duty of 0.5% of the customs value of the goods.

African Union levy: The Nigerian government agreed in May 2019 to introduce the levy to finance the African Union at 0.2% of the customs value. This levy on imports from non-member states is not currently levied.

Labelling and Packaging of Goods 

Goods that are loaded into Nigeria by sea freight in containers must be packed on pallets – following international standards – to facilitate inspection at the customs office of entry. Excluded from the palletisation requirement are individual items over 1000 kg, rollable goods (motor vehicles), walk-in containers, and fragile goods that are not suitable for unloading, such as special equipment. Containers should only contain goods of the same type. If there are different goods in a container, a very close inspection must be expected.

When importing wooden packaging material and dunnage, Nigeria requires compliance with the international standard ISPM 15. The use of hay and straw as packaging material is prohibited.

Goods destined for the Nigerian market must be labelled in English. Product packaging must contain the following information:

  • Name of the product, if necessary further product details
  • Country of origin
  • Date of manufacture
  • Batch number
  • Gross and net weight or number of product units per package
  • Standards to which the product was manufactured

The importer in Nigeria is obliged to affix a Product Authentication Mark (PAM) on the retail packaging of a SONCAP-certified finished product. As of 1 January 2020, the sale of imported finished products without the PAM quality mark with QR code and security features is prohibited.

For electronic devices and equipment, operating instructions and safety instructions must be included. They must also have a warranty of at least six months. Electrical items (cables, plugs, bulbs, etc.) must include information on performance data, such as maximum allowable voltage and current and, if applicable, service life.

Investment Incentives

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The Nigerian government offers investors of any sector fiscal incentives in Nigerian tax laws and sector-wide fiscal concessions. A compilation of investment incentives (Compendium of Investment Incentives in Nigeria) is updated regularly. Detailed information on industrial incentives can also be obtained from the Nigeria Customs Service.

The NIPC offers foreign investors the One-Stop Investment Centre (OSIC). Various services relevant for foreign investors are combined under the umbrella of the OSIC. These include, for example, the issuing of business licenses and permits, and the provision of legal information. Among the authorities offering their services at the OSIC are the Federal Inland Revenue Service (FIRS), the Nigeria Export Processing Zones Authority, which is responsible for export production zones, and the Nigeria Immigration Service (NIS). 

Apart from the general investment incentives, further incentives are applicable to the renewable energy and energy efficiency sector.

Overview of Investment Incentives

Incentive Type

Administrating Authority/Agency

Main Incentives

1. Investment Policies and Protections

1.1
Nigerian Investment Promotion Commission Act

Nigerian Investment Promotion Commission (NIPC)

 

Federal Inland Revenue Service (for Commonwealth Tax Relief)

  • 100% ownership
  • Special incentives for strategic or major investment
  • Free transferability of capital and returns
  • Protection against nationalisation and expropriation
  • Recourse to international arbitration

1.2
Bilateral Investment Treaties

  • Double taxation agreements (Belgium, Canada, China, Czech Republic, France, Italy (airline and shipping only), Pakistan, Philippines, Romania, Slovak Republic, South Africa, Netherlands, United Kingdom)
  • Investment promotion and protection agreement (China, Finland, France, Germany, Italy, Korea, Netherlands, Romania, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan Province of China, United Kingdom)
  • ECOWAS Trade Liberalisation Scheme (Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Sierra Leone, Togo)
  • Commonwealth tax Relief

2. General Tax-Based Incentives

2.1
Tax-Based Incentives: Personal Income tax

Federal Inland Revenue Service

State Boards of Internal Revenue Service

  • Tax credit allowable against tax payable on income derived from outside Nigeria
  • Consolidated relief allowance
  • Returns not to be filed when income is ₦30,000 or less
  • Income exempted
  • Exemption of interest of loan granted by banks
  • Exemption of dividend from tax

2.2
Tax-Based Incentives: Capital Gains Tax Act

Applicable Rate: 10%

Federal Inland Revenue Service

  • Exemption on retirement benefit schemes
  • Exemption of gains accruing on securities, stocks, and shares
  • Tax exemption on gain arising from takeovers, absorptions or mergers
  • Tax exemption on proceeds re-invested
  • Double taxation relief

2.3
Tax-Based Incentives: Companies Income Tax

Applicable Rate: 30%

Federal Inland Revenue Service

Only pioneer status incentive:

NIPC

Industrial Inspectorate Department, Federal Ministry of Industry, Trade and Investment

  • Pioneer status incentive
  • Interest on bonds and short-term securities, and proceeds of the disposal of government and corporate securities
  • Exemption of interest on loan
  • Exemption on profits
  • Deduction for research and development
  • Reconstruction investment allowance
  • Rural investment allowance (no facilities at all: 100%, no electricity: 50%, no water: 30%, no tarred road: 15%)
  • Investment tax relief
  • 20% income tax rate for companies with turnover of less than ₦1 million

2.4
Tax-Based Incentives: Value Added Tax

Applicable Rate: 5%

 
  • Exemption from value-added tax (VAT)
    • Goods: all medical and pharmaceutical products; basic food items; books and educational materials; baby products; fertiliser; locally produced agricultural and veterinary medicine; farming machinery and farming transportation equipment; all export; plants and machinery imported for use in Export Processing Zones; plants and machinery purchased for utilisation in gas down-stream petroleum operations; tractors, ploughs, and agricultural equipment and implements purchased for agricultural purpose
    • Services: medical services; services rendered by community banks, people’s banks, and mortgage institutions; plays and performances conducted by educational institutions as part of learning; all exported services
  • Exemption of commissions on stock exchange transactions

3. Sector-Specific Incentives

3.1
Agriculture /Agro-Allied

Federal Ministry of Agriculture and Rural Development

  • Enhanced capital allowance (tax depreciation) regime
  • Agricultural credit guarantee scheme fund: loan guarantee of up to 75%
  • Exemption from minimum Corporate Income Tax
  • Indefinite loss carryforward

3.2
Solid Minerals

Federal Ministry of Mines and Steel Development

  • Exemption from Companies Income Tax
  • 95% accelerated capital allowance

3.3 Manufacturing Incentives

Federal Ministry of Industry, Trade & Investment

Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending

Central Bank of Nigeria

  • Interest drawback program fund for cassava processing (0% repayment of interest paid by those who borrow from banks under ACGS for cassava production and processing)

3.4 Tourism/Hospitality

Federal Ministry of Information and Culture 

Sector Regulator: Nigerian Tourism Development Corporation

Administering Agency: Federal Inland Revenue Service

  • 25% of income in convertible currencies exempted from tax

3.5 Oil and Gas

Federal Ministry of Petroleum Resources Sector
Regulator: Department of Petroleum Resources

Federal Inland Revenue Service

  • Graduated royalty rates approved for oil companies
  • Investment tax credit allowance
  • Allowable deductions

4. Tarif-Based Incentives

 

Federal Ministry of Finance

Federal Inland Revenue Service

Nigeria Customs Service

  • Agriculture: Agriculture, Agro-Allied, and Agro-Processing
  • 0% import duty on agriculture equipment and machinery 
  • 0% import duty rate on greenhouse equipment that has been classified as agricultural 
  • Agriculture: Agricultural Commodities
    • 10% import duty rate and 20% levy on husked brown rice 
  • Transportation: Aviation
    • 0% Import duty on commercial aircraft, only for registered commercial aircraft operators
  • Power: Electricity Generation, Distribution and Transmission
    • 0% import duty on equipment and machinery in the power sector 
  • Solid Minerals: Mineral Mining
    • 0% import duty on equipment & machinery in the mineral mining sector 
  • Manufacturing: Sugar Processing
    • 5% import duty rate and 5% levy on raw sugar import for local processing 
  • Manufacturing: Iron and Steel
    • 0% import duty rate on the importation of billets 
    • 0% import duty rate on the importation of hot rolled steel sheets/coils 
  • Manufacturing: Automotive Design and Development 
    • 35% import duty rate and 0% levy on concessionary FBU import by assembly plants 
    • 20% import duty rate and 0% levy on concessionary FBU import by assembly plants 
    • 5% import duty rate on local tyre manufacturing plants: Importation of tyres equal to twice the production for two years from the date of commencement of production

5. Export Incentives

 

Federal Ministry of Industry, Trade and Investment 

Regulator: Nigerian Export Promotion Council (NEPC)

  • Export Expansion Grant Scheme (EEG) (qualifying export transaction must have the proceeds fully repatriated within 300 days, the incentive scheme operates a “Weighted Eligibility Criteria” to assess applications)

6. Special Economic Zones

6.1

Export Processing Zone Incentives

Federal Ministry of Industry, Trade and Investment

  • Export processing zone incentives
    • 100% foreign ownership of investment
    • Free transferability of capital, profits, and dividends by foreign investors
    • Rent-free land at construction stage, thereafter rent shall be payable
    • Full tax holiday from federal, state and local government for all enterprises and individuals
    • Duty-free and tax-free import of raw materials for goods destinated for re-export
    • Waiver on all import and export licenses
    • Waiver on all expatriate quotas for companies operating in the zones
  • 100% capital allowance
  • Unlimited sale of products within customs territory

6.2 

Oil and Gas Free Zone Incentives

Ministry: Federal Ministry of Industry, Trade and Investment 

Regulator: Oil & Gas Free Zones Authority

  • Oil and gas export free zones incentives
  • 100% capital allowance
  • Unlimited export into customs territory
  • 75% duty rebate

Compendium of Investment Incentives in Nigeria

Pioneer Status Incentive

Pioneer Status Incentive Reports

Investment Opportunities Industry

Investment Opportunities Services

Investment Opportunities Agriculture

Visa and Travel

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Visa Application

In the course of promoting the engagement of foreign investors in Nigeria, visa regulations were completely revised. Nigeria’s Visa Policy 2020 aims to attract innovation, specialised skills, and knowledge from abroad to complement those locally available.

Visa Categories

There are three visa categories:

  • Short Visit Visa (SVV)
  • Temporary Residence Visa (TRV)
  • Permanent Residence Visa (PRV)
Short Visit Visa

Short Visit Visas allow travellers to visit Nigeria for a maximum period of three months for the following purposes: Visit, tourism, business meeting, conference, seminar, contract negotiation, marketing, sales, purchasing, distribution of Nigerian goods, trade fairs, job interview, sports, entertainment, study trip, academic exchange programme, humanitarian services, relief/emergency work, and temporary work permits.

Temporary Residence Visa

Temporary Residence Visas allow persons to stay in Nigeria for a maximum period of two years (subject to renewal) for work, settlement, schooling, internship, accompanying employed migrants or students, or diplomats and dependents.

Permanent Residence Visa

Permanent Residence Visas permit certain groups of people to obtain permanent residence status in Nigeria. These persons include spouses of Nigerian citizens, Nigerian-born persons who have renounced Nigerian citizenship and their spouses, as well as investors who introduce a minimum annual amount of capital that can be determined, highly qualified persons, and some categories of retirees.

Three Ways to Obtain a Nigerian visa

The Visa Policy 2020 has opened three channels through which Nigerian visas can be processed and obtained:

  • Visa on Arrival
  • Electronic Visa (e-Visa)
  • Visa at the Embassy
Visa on Arrival

The Visa on Arrival is available for:

  • Holders of passports of countries in the African Union
  • Citizens of countries who fall within the following categories:

 

F4C: Business – Frequently Travelled Executives Visa

F5A: Tourism Visa

F7K: Emergency Relief Work Visa

F9A: Returning holder of other national passports who are Nigerians by birth

Basic requirements:

  • Valid passport with a minimum of six months validity
  • Valid return ticket

How to apply:

Before your travel: Make the online payment via the website www.immigration.gov.ng and print the payment receipt.

Upon arrival: 

  1. Apply for Visa on Arrival at the Nigerian port of entry by proceeding to the desk marked “Visa on Arrival”.
  2. Proceed the biometric enrolment (photo, fingerprints) and receive your visa.
e-Visa

The Nigerian e-Visa Service is an online visa application process that enables intended visitors to Nigeria to apply for short stay visas online for a maximum of three months and have them approved electronically (Travel Authorisation Letter) before arrival to Nigeria.

The e-Visa is applicable for a wide range of purposes for short visits, including business (single entry and frequently travelled executives), tourism, journalism, artists, study tours, NGO staff, and Nigerians by birth.

Basic requirements:

  • Valid passport with a minimum of six months’ validity with at least two blank visa pages for endorsement
  • Valid return ticket
  • Evidence of sufficient funds
  • Evidence of hotel reservation/host address in Nigeria

How to apply:

  1. Apply for the e-Visa online at www.immigration.gov.ng by selecting the applicable visa class/type in the Short Visit Visa Category listed.
  2. Complete your application, upload the required documents and make the payment.
  3. Once the application is submitted successfully, a printable receipt will be issued with another copy sent to your email account (the successful submission is not an approval).
  4. Your application is processed, thereafter an approval confirmation and an electronic Travel Authorisation Letter (eTAL) is sent to your email account within 48 hours (2 working days).
  5. Proceed to Nigeria with your eTAL.
Visa at the Embassy

All classes of Nigerian visas, including those available for Visa on Arrival and e-Visa services can be processed and obtained at the Nigerian Embassies and Visa Application Centres (VACs). However, all classes of visas for Temporary and Permanent Residence Visas can only be processed and obtained at the Embassies or Visa Application Centres. Embassies include Nigerian High Commissions or Consulates.

How to apply:

  1. Application and payment online at www.immigration.gov.ng
  2. Submission of required documents at the Embassy (upon appointment)
  3. Attend the personal interview (where necessary and applicable)
  4. Obtain the visa

Applications for Nigerian visas can also be submitted and processed through established VACs operating in some countries. The centres receive and submit applications on behalf of visa applicants to the Nigerian Embassies for processing and approval.

A detailed Visa Guide for Nigeria is available here.

Travel in Nigeria

Road network: The most important traffic route in Nigeria is the road. About 90% of goods and passenger traffic is carried by road. Nigeria has a total of 3500 km of narrow-gauge railways, which run from Lagos to Nguru, and from Port Harcourt to Maiduguri. There are currently more than 200 road projects in preparation or implementation to improve existing roads and to enlarge the road network. 

As one of the strategic priorities, the National Integrated Infrastructure Masterplan indicates the rehabilitation of all major economic routes, the rehabilitation of major link routes, and the restoration of 70% of federal and state roads by 2023.

Nigeria Road Network
© GIZ/United Nations, Source: https://www.un.org/Depts/Cartographic/map/profile/nigeria.pdf

Railway network: The Lagos-Kano railway line was restored in 2013–14 with the help of Chinese companies. Kano, Nigeria’s second-largest city in the north, can now be reached from Lagos in 31 hours. The Abuja-Kaduna railway line was opened in July 2016. The use of the railway line has been very popular among Nigerians ever since: they particularly appreciate the comfort and the comparatively low ticket prices. The Nigerian Railway Corporation is engaged in freight train operations covering 280 stations in 19 states. There are two rail-served inland container dry ports at Kaduna and Kano.

Air traffic: Air travel is becoming increasingly important. Besides the international airports of Lagos, Abuja, Kano, Port Harcourt, and Enugu, Nigeria has 23 other airports for domestic air traffic.

Waterways: More than 8600 km of waterways are available for inland waterway transport, of which only around 3800 km are seasonally navigable.

Ports and harbours: The major ports include the Lagos Port Complex and the Tin Can Island Port Complex, both in Lagos State; the Calabar Port Complex in Cross River State; the Delta Ports in Warri, Delta State; and the Rivers Port Complex and Onne Port Complex, both in Rivers State. Nigeria’s principal container port is the port of Lagos, which handles around 5.75 million tonnes of cargo each year. 

The Nigerian Ports Authority (NPA) is a federal government agency that governs and operates the ports in Nigeria. The NPA is pursuing partial port privatisation by means of granting concessions to private port operators. Under the terms of concession agreements, the government would transfer operating rights to private companies for a finite number of years without forgoing ownership of the port land. 

Find the National Integrated Infrastructure Masterplan here.

Nigeria in the Covid-19 Pandemic

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Swift detection, early testing, and rapid response require cross-border collaboration and strong solidarity among neighbouring countries and with the international community to combat the spread of infectious diseases. The response to the 2014 Ebola crisis taught African countries what it takes to invest in more resilient health systems and effective surveillance mechanisms to cope with epidemics. A strong response to Covid-19 will require building on these lessons together.

Health experts in Nigeria and Senegal shared their views on what is being done to curb the spread of the pandemic on the continent and to prepare for its impacts.

International, regional and bilateral partners are assisting Nigeria and other African countries in taking the necessary steps in response to this global threat, and will strengthen national systems for public health preparedness, including for disease containment, diagnosis, and treatment, and support for the private sector. 

Updated information on the Covid-19 situation in Nigeria can be found here.

The Covid-19 regulations in Nigeria can be found here.