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“Nigeria has enormous potentials and is a desirable top investment destination for foreign direct investment from all over the world. Current population numbers of Nigeria is 190million projected to grow up to 400 million by 2050.  Nigeria has abundant human and natural resources with skills and experience to support its growing economy”

HE Ambassador Adeyinka Asekun, the High Commissioner of the Federal Republic of Nigeria to Canada declared at the just concluded Business Networking Reception held at the Bay Adelaide Centre, West Tower, Toronto, Ontario on July 24 2019 that Nigeria was ready for business. The event was organised by the Leadership and Governance Inc., the organisers of the yearly Nigeria-Canada Investment Summit.

Ambassador Asekun shared pertinent information about Nigeria and its business and diplomatic relationship at the event. According to him, Nigeria is the largest economy in Africa, with real GDP of 408 billion (USD) as of December 2017, he informed the participants that the GDP growth rate was 1.95% in real terms as per Q1 2018. Nigeria bounced back from recession in the second quarter of 2017 and immediately recorded a growth rate of 0.7%; this increased to 1.4% growth rate by Q3 of 2017.  The growth in GDP in Q3 2017 was driven by 25.89% growth in the mining and quarrying sector as well as 3.06 percent growth in the agricultural sector. The rate of return on investment (ROI) in Nigeria is over 35%. The focus is economic recovery and growth through diversification, Food Sufficiency, Export Development and the Attraction of Foreign Direct Investment.[1]

Nigeria has enormous potentials and is a top investment destination for foreign direct investment from all over the world. Current population numbers of Nigeria is 190million projected to grow up to 400 million by 2050. Nigeria has abundant human and natural resources with skills and experience to support its growing economy. China increased its investment in Nigeria steadily in the last 10 years as its influence increased all over Africa. Reliable sources confirm that there are over 65 Canadian companies doing very profitable business in Nigeria, some of them are: Manitoba Hydro has a customer base of 28 million households in Nigeria, compared to 542,000 households in Canada. SkyPower Global in May 2014 signed a contract to invest $5 billion in Nigeria to build one of the world’s largest solar power plants. INKAS sells brand new armoured cars, SUVs, and cash-in-transit vans to private citizens and commercial banks in Nigeria for many years and has a big chunk of the market for banks and high net worth individuals.[2]  DC International (Neo Term Projects) is a Canadian enterprise that designs, develops and markets techniques for the prefabrication of buildings.[3] Comairsoll Canada, Inc is engaged in providing turnkey project service, turnkey solutions installation service and design service to its Customers.[4]

Nigeria has the capacity to do more business with Canada, in view of their long history of collaboration and their membership of the Commonwealth of nations. To assist bilateral trade between Nigeria and Canada, the Canadian High Commission established the Office of the Trade Commissioner in Nigeria to serve and promote Canadian companies seeking to develop international business. The Trade Office attached to the Canadian High Commission in Lagos Nigeria supports the efforts of Canadian companies who have selected Nigeria as a target market for their products, services and technologies. The Trade Office also helps local contacts interested in sourcing from Canada or collaborating with Canadians by matching their needs with the appropriate Canadian companies or counterpart organizations. Based on its knowledge of the market, the office identified the following sectors as the best for Canadian business: Sustainable Technologies, Education, Information and Telecommunication Technologies and Energy.[5]  

Nigeria plays host to several foreign investors who are interested in making profitable investment in Nigeria’s diverse business sectors. Foreign Direct Investment in Nigeria increased by 1150.51 USD Million in the first quarter of 2019. Foreign Direct Investment in Nigeria averaged 1240.22 USD Million from 2007 until 2019, reaching an all time high of 3084.90 USD Million in the fourth quarter of 2012 and a record low of 314.44 USD Million in the fourth quarter of 2018.[6]

Presidential Enabling Business Environment Council (PEBEC)

The Federal Government of Nigeria commenced an initiative to grow its Foreign Direct Investment, (FDI), by deliberately promoting the ease of doing business in Nigeria. The Government has addressed and still addressing various issues that had constituted bottlenecks to entry of foreign investors in a bid to diversity the Nigerian economy into non-oil investments.  In July 2016, His Excellency, President Muhammadu Buhari set up the Presidential Enabling Business Environment Council (PEBEC) to remove bureaucratic constraints to doing business in Nigeria and make the country a progressively easier place to start and grow a business. The Council is chaired by His Excellency, Professor Yemi Osinbajo, the Vice President of the Federal Republic of Nigeria and comprises of 10 ministers, the Head of the Civil Service of the Federation, Governor of Central Bank of Nigeria and representatives of Lagos and Kano States, National Assembly and the Private Sector.[7]

The opinion of international investment and finance consultants has been positive; for example Nigeria ranked 145 out of 190 economies, and moved up 24 spots from the previous year. It also regarded Nigeria as one of the top-10 most improved economies and top-three improved Sub-Saharan countries, including Malawi and Zambia. This was attributed to the initiatives and policies of PEBEC.[8]

Legal Framework for Foreign Investment in Nigeria

The principal legislations guiding foreign investment in Nigeria are the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria 2004; Nigerian Investment Promotion Commission Act, Cap N117, 1995, LFN;  Investment Act, 2004; Foreign Exchange [Monitoring and Miscellaneous Provisions) Act; Investment and Securities Act, Cap 124, LFN 2007; National Office of Technology Acquisition and Promotion Act (NOTAP), Cap N62 and the Immigration Act of Nigeria. These laws prescribe the mode of business registration, Investment incentives, acquisition of Business Permit, Work Permit, Expatriate Quota and the  transfer of technology.  There are no restrictions to the share ownership of company formation. Foreign direct investment may come in through any of the preferred and lucrative sectors of the economy via any of the following investment vehicles: limited liability company, partnership, public limited company or joint ventures. Ideally, non for profits are registered as Incorporated Trustees and these can not distribute profit to the members[9].

Foreign Investment Promotion and Protection Agreement (FIPA)

Nigeria and Canada’s diplomatic relations date back to 1962 shortly after Nigeria gained independence.[10] Currently, Nigeria is Canada’s largest trade partner in sub-Saharan Africa with about $1.47billion flowing between them in 2017[11]. There is a Double Taxation Treaty to promote business between the two countries. The trade and economic relations received an impetus in 2013 with the Nigerian Canadian Investment Conference that led to the signing of the first major economic bilateral agreement, Foreign Investment Promotion and Protection Agreement (FIPA) between the two countries in Abuja, Nigeria on May 6, 2015. This agreement was to form the basis of greater cooperation and deepening of bilateral trade between the two countries. The interest of Canadian investors peaked in non-oil and extractive industries. After preliminary investigations, initial visits and due diligence on available investments, the interest had waned. It appeared that international investment experts were not prepared to commit capital without a strong legal framework for investment promotion and protection. The investors would typically require government-backed guarantees as separate agreements with local business partners, State and Local governments have been known to not provide the needed assurance and comfort needed by the investors.

The Constitution of the Federal Republic of Nigeria listed Trade and Commerce as matters within the Exclusive Legislative list in respect of which only the Federal Government can legislate. However, despite the execution of FIPA by the Federal Government, there is need to comply with the provisions of section 12 of the Constitution of the Federal Republic of Nigeria that stipulates local adoption of the bilateral agreement before it can come into force.[12]The FIPA is not operational as the Federal Government of Nigeria has not complied with section 12 of the Constitution to give it local mandate.

Security of Foreign Investment

Cursory reviews of the executed FIPA showed that the agreement provided substantial assurance to the investor on the safety of their individual investment as well as provide a level playing ground for them to obtain equal treatment and fair opportunity to do business in each other’s territory. Both party are to encourage and promote favourable conditions for investment in its territory, and admit the investments in line with the Agreement.[13]  Each party will is required to accord to the other party the most favoured nation (MFN) treatment, offer the same level of protection offered to its own investors. Parties are to ensure the “minimum standard” of treatment, provide compensation for losses and be non-discriminatory in its policy making. Neither party shall interfere in the selection of officers or managers of the investment and even where local laws provide percentage management, this should not interfere with the investors’ ownership structure. The Nigerian Government’s local content policy would have to be interpreted fairly in view of the performance requirements provision.[14]  The Agreement also provides against expropriation except on overriding public interest considerations and in that case, there should be prompt, adequate compensation that shall be freely repatriated.[15] It is quite instructive that the FIPA is subject to tax laws, conventions and regulations of member countries.[16]

Other legal instruments in place to secure or guarantee the security of foreign investments are:

  • Protection against nationalization and expropriation: Section 25 NIPC Act guarantees to investors against nationalization and expropriation. Where an acquisition is made in national interest or for public purpose, the investor shall have entitled to fair and adequate compensation, right to sue for determination of compensation and payment for said compensation shall be paid without delay.
  • Recourse to international arbitration: Section 26 NIPC Act allows a foreign investor to seek recourse to international arbitration for settlement of disputes. Where there is disagreement on the method of dispute settlement to be adopted, the International Centre of investment Disputes Rules shall apply.
  • Transferability of Capital and Returns: Section 24 NIPC Act provides that a foreign investor in an enterprise, to which the Act applies, shall be guaranteed unconditional transferability of funds through an authorized dealer…[17]
  • Ownership of Shares: The legal regime permits 100% foreign ownership of business in Nigeria as long as it is not in the prohibited list, these are arms and ammunition, production and dealing in narcotic drugs and military hardware.
  • Pioneer Status incentive: The Pioneer Status Incentive was established by the Industrial Development (Income Tax Relief) Act, No 22 of 1971 and is a tax holiday which grants qualifying industries and products relief from payment of corporate income tax for an initial period of three years, extendable for one or two additional years. The updated list of pioneer industries show Agriculture, Mining and Quarrying, Manufacturing, Electricity and Gas Supply, Waste Management, Construction, Information and Communication, Professional Services, Financials and Administrative Services qualify as pioneer industry and products[18]
  • Other incentives include the Double Taxation Relief, ECOWAS Trade Liberalization Scheme, Commonwealth Tax Relief, Tax exempted Income: S23(1) CITA – Charities, exports from Nigeria, free trade zone; Exemption on Interest on loan granted by banks, exemption of dividend from tax exemptions. There are series of Gas Utilization tax free, interest deductions and several investment tax reliefs[19] Nigeria also qualifies for the Africa Growth and Opportunity Act (AGOA).

Apart from the listed investment incentives, other incentives are in place to promote foreign investment in Nigeria. There are more ‘sector specific incentives’; these sectors include:

  • Agricultural / Agro- Allied Sector
  • Solid Minerals
  • Manufacturing (Sugar processing, Iron & Steel, Automotive Design & Development).
  • Tourism/Hospitality
  • Oil & Gas[20]

Investment Opportunities in Nigeria

There are many reasons to invest in Nigeria; for starters, it is the biggest economy in Africa; has fast growth prospects; Large and Growing Population; Strategic Market; Commitment to Improving Business Environment; Subnational Doing Business Reforms and it is strategically located.[21] 

The specific sectors presenting good investment space are as follows:

  • Agriculture: Training and knowledge-transfer in areas such as Green-House Farming, Agro-Food Processing for exports and  advanced mechanized farming, Crop Production and Animal Husbandry. Food Processing (Beverages, Packaged Foods, Fruit Juices, Cashew Nuts, etc.) Sugar Production, Palm Oil Processing, Leather and Leather Products, Rubber Products (Tire), Cocoa Processing, Sea food trade and production (Mackerel, Herring fish, Prawns).
  • Mining: Existence of 44 solid minerals in proven commercial quantities including gold, iron ore, lead and zinc, barite, tantalite, bitumen and coal currently in focus. 8th largest gas reserve @ 187 trillion cubic feet (largely being flared), and the 11th largest crude oil reserve @ 37 billion bbls.
  • Power & Energy: Biomass
  • Healthcare
  • Marine: Ferry and Boat Transportation Services (in Lagos, Calabar, Port Harcourt, Bayelsa, Lokoja and many others).
  • Forging of Partnership in Education (Knowledge Transfer, Student Exchange Programs).[22]


Nigeria is a formidable choice for trade and economic partnership with Canada. Nigeria is blessed with abundant natural and human resources to attract the interest of foreign investors. Nigeria needs Foreign Direct Investments. The NIPC has created the One Stop Investment Centre (OSIC) which brings together relevant government agencies to one location to provide fast-tracked services to investors. The Centre is coordinated by the NIPC and the objective of the Centre is to simplify business entry processes by removing administrative and regulatory bottlenecks pertaining t doing business in Nigeria, the Centre has about 27 participating agencies.[23] The effort of the PEBEC is commendable. On the other handle, Canada is eager to invest in Nigeria, the Federal Government of Nigeria should expedite action to adopt the Foreign Investment Protection and Promotion Agreement to demonstrate its seriousness in tacking the issues addressed under the FIPA.


Akinwumi Reju
Business and Real Estate Attorney
Partner, Topmarke Attorneys, LLP
Suite 108-333 Sheppard Avenue E
North York, ON
Tel: 416.733.8585
Fax: 416.733.0009

[22] HE Ambassador Adeyinka Asekun, High Commissioner of the Federal Republic of Nigeria to Canada.
[23] Nigerian Investment Promotion Council: Guide to Investing in Nigeria, culled from

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