Nigeria is a middle-income, mixed economy and emerging market, with expanding financial, service, communications, technology and entertainment sectors.
It is ranked 30th (40th in 2005, 52nd in 2000), in the world in terms of GDP (PPP) as of 2013, and the 2nd largest economy in Africa (behind South Africa and on track to become the largest economy in Africa in 2014 when their new GDP rebasing result is out early 2014 and becoming one of the 20 largest economies in the world by 2020.
Its re-emergent, though currently underperforming, manufacturing sector is the third-largest on the continent, and produces a large proportion of goods and services for the West African region. Read more on Wiki »
Ploughing a New Path in Agriculture
Before oil, Nigeria had oil. With oil were the crops groundnut (peanut), cocoa and rubber. These crops were cultivated in large quantities and exported to Europe and America in the pre-1960s and early ‘60s.
With military incursions into Nigerian government and the dependence of petroleum products as the foremost foreign exchange earner, attention to the agricultural sector dwindled. Nigeria’s groundnut pyramids disappeared, the oil palm plantations vanished and farming went back to a subsistent level. With a burgeoning population, it became increasingly difficult to feed the teeming masses and the country resorted to importing food to supplement the one grown at home.
With the military gone and a new democratic structure in place, the country is poised to regain her place in agriculture. The administration of President Olusegun Obasanjo has watered the ground in empowering Nigerian farmers and agro-allied investors to harness the country’s rich resources in producing food and raw materials for industries and export.
Funding for agro allied investments have been made easier to get, with extension services provided to farmers at highly subsidized rates to make sure heavy yields at harvest time.
Agric banks make loans available to farmers while fertilizers, pesticides, herbicides and planting technologies are made available at subsidized rates by the government. Working in hand with the farmers is the Nigerian Export Promotion Council which helps to find buyers for the food and cash crops from Nigeria.
Land is being provided at reasonable terms for use for large-scale farming. Government has encouraged foreign agric investors with remarkable results. For instance farmers from Southern African countries have found home in Nigeria where they have started operations to produce.
The agricultural initiative of the Obasanjo Administration has seen to the restriction of the importation of some types of food and cash crops to encourage local farmers to compete. The highly fertile Nigerian soil makes it easy to cultivate the following: Cassava, Yams, Melon, Maize, Millet, Sorghum, Cowpeas, Bananas (plantains included) Palm oil, Groundnuts.
Nigeria’s cash crops include: Tobacco, Groundnuts, Cocoa beans, Rubber, Gum Arabic, Kola nuts, Beniseed, Cotton, Soyabean, Palm kernel, Cashew nuts Nigerian manufacturers find it convenient to grow their raw materials here. Hence there are cotton farms, orange plantations, tea plantations (on Mambilla Plateau) and coconut groves all sources of raw materials for Nigerian industries.
Opportunities also abound in the cultivation of various species of fish. Fish farming is on the rise in Nigeria with several hundred thousands of tons of fish harvested annually in the country. The grasslands of the Northern part of the country are ideal for ranching and the rearing of cattle and other livestock.
Central Bank of Nigeria: The Vision
To be one of the most efficient and effective world’s Central Banks in promoting and sustaining economic development.
To be proactive in providing a stable framework for the economic development of Nigeria through the effective, efficient and transparent implementation of monetary and exchange rate policy and management of the financial sector.
Statement of CBN Mandate
The mandate of the Central Bank of Nigeria (CBN) is derived from the Act that sets it up. The first one was the 1958 Act of Parliament which was severally amended before it was jettisoned and replaced by the CENTRAL BANK OF NIGERIA Decree No. 24 of 1991 (as amended in 1993, 1997, 1998 and 1999).
The decree, (now an Act of the National Assembly of the Federal Republic of Nigeria) makes provision for the continuance of the CBN with a Board of Directors consisting of the Governor, four deputy governors and five non- executive directors and charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government, both within and outside Nigeria.
The statutory mandates of the CBN as in the Act are as follows:
- To issue legal tender currency
- To support external reserves
- To safeguard the international value of the legal tender currency
- To promote monetary stability and a sound financial system in Nigeria
- To act as banker and financial adviser to the Federal Government
Core Mandate of the CBN
The core mandates of the Central Bank of Nigeria (CBN) derive from the provisions of the CBN Decree No. 24, 1991 as amended. The mandates are mainly:
- Issuance of legal tender currency notes and coins in Nigeria;
- Maintenance of Nigeria’s external reserve to safeguard the international value of the legal tender currency;
- Promotion and maintenance of monetary stability and a sound and efficient financial system in Nigeria; and
- Acting as banker and financial adviser to the Federal Government.
The Bank is also charged with responsibility of supervising and regulating banks and other financial institutions, subject to the BOFID Decree No. 25, 1991, as amended, which aims at ensuring high standards of banking practice and sustaining financial stability.
The CBN accomplishes this task through the supervision and surveillance of the financial system and promotion of an efficient clearing and payment system.
The surveillance of banks enhances competition, while prudential regulations promote stronger balance sheets and higher quality of bank portfolios. The execution of CBN’s core mandate involves a review of developments in the economy in the preceding year and setting goals and targets for the current year.
Nigeria Export Processing Zone Authority (NEPZA)
The Authority is Nigeria’s Investment Promotion Agency for investment into the Free Zone areas in Nigeria . The licensing, monitoring and regulation of Free Zones Scheme in Nigeria is vested on the Nigeria Export Processing Zones Authority by the Nigeria Export Processing Zones’ Act 63, of 1992.
Several factors are responsible for the adoption of Free Zones Scheme in Nigeria , among which are the diversification of the revenue base of the economy, employment generation and to encourage export through local production.
The enabling Act also confers on the Authority the power to approve and grant all licenses and permits to the exclusion of all other Agencies, enforce obedience and compliance to rules and regulations.
In effect, the Act is an omnibus law, which permits the Authority and its Board the power to define the policy directions and offer a One-Stop-Shop business transaction without bureaucracy.
To be the most investor-friendly Free Zone Services Provider
To set up, license and operate highly efficient Free Zones by providing competitive incentive schemes, excellent support facilities and services for creating enabling environment for export manufacturing and other commercial activities.
The Oil & Gas Industry
The country has put in place Petroleum and Gas policy with the following goals:
- Increasing oil reserve base and productivity through vigorous exploration and ensuring judicious exploitation of the resource.
- Allowing for private sector participation in all the facets of the industry through attractive fiscal measures.
- Government is giving serious consideration to selling its equity shares in joint venture operation.
- Acquiring reasonable market shares for the crude oil and its derivatives and achievement of domestic refining self-sufficiency.
Expanding the Utilization of Natural Gas
Virtually every sector is open to investors in the Oil and Gas Industry. They include: Up-stream Sector and Down-stream Sector; Gas Development and Conversion; and Marketing of Nigeria crude oil.
The Upstream Sector
Activities under the upstream sector include:
- Surveying: Geodetic control establishment; Mapping, tropical and plan metric; and Sea Bottom Survey/Investigation.
- Civil Works: Site Surveys; Preparation of drilling locations; Construction of mud pits and slabbing or concreting jobs at rig sites. Supplies of cement, chemicals, sands, gravel, iron rods, labour, road mat, timber, etc.
- Seismic Data Acquisition and Interpretation: Analysis and interpretation of data acquired from seismic and geodetic surveys – such data on soil land rock samples.
Wire line, logging, core analysis, geological and geochemical studies.
Drilling and work-over rigs; field transportation and equipment for haulage and rig movements; general and specialized service such as casing running, cementation, welding, diving and catering; and provision of mud and other chemicals.
Crude Oil Transportation & Storage
Construction and maintenance of crude oil storage tanks and pipelines
Exploration and Production
Investors wishing to take part in this venture are welcome. This involves applying for block(s) for exploration through the oil prospecting license (OPL) and the oil-mining lease (OML). Currently, emphasis is shifting from production sharing contract (PSC) to Service Contract.
Pursuant to the above, the Oil Exploration License (OEL) confers on the licensee, renewable on end.
The Downstream Sector : Refining
Investors can set up and wholly own a refinery; Companies with the technological know-how can undertake turn-around maintenance of refineries.
There is tremendous scope for small-scale joint venture manufacture of spare parts, chemicals with technical foreign partners; Also opportunities exist in the manufacture of other special products such as:
- Industrial and food grade solvents;
- Mineral oil, petroleum jelly greases;
- Bituminous-based water/damp proof building materials such as floor tiles,
- Exports of refined products surplus;
Gas Development & Conversion
Government has opened the sector to foreign investment and is willing to consider proper tailor-made incentives for projects in this sector. Opportunities which abound in this sector for investors include:
Natural Gas Pipeline Network
Plans are afoot to build and extend gas pipeline in view of the importance of gas. Investors wishing to set up energy intensive industries such as cement factories, iron smelting and foundries will have a significant cost saving if gas is used as fuel.
In furtherance of the spirit of the treaty of ECOWAS (the Economic community of West African States) which seeks to encourage cooperation between member states for the overall improvement of their economies, Nigeria embraced the West African Gas pipeline concept conceived by the World Bank to meeting the energy need of Ghana, Togo and Benin Republic by supplying them with natural gas from Nigeria on purely commercial terms.
The Liquefied Natural Gas Project (LNG)
The Nigerian LNG project is being implemented in phases with an first production from two trains. The plant is situated at Bonny Island. NLNG has successfully secured market for its moderate production volume from its base project and train three.
New Gas Systems
There is more Gas than Oil, in Nigeria. While the country’s oil reserve could last for about 31 years that of gas could be depleted in about 72 years, according to recent authoritative report. In spite of this abundance, local gas use is constrained by limited transmission systems and even lack of same in some parts of the country.
This hinders greatly, the transmission, distribution and marketing of the product in many parts of the nation. Currently, there is a proposal by the Nigerian government to build other four transmissions systems including Ajaokuta, Abuja – Kaduna, and Aba, Enugu – Gboko at the estimated cost of $2 billion.
Nigeria is richly endowed with a variety of solid minerals ranging from precious metals various stones to industrial minerals such as barytes , gypsum, kaolin and marble. Most of these are yet to be exploited.
Statistically, the level of exploitation of these minerals is very low to the extent of deposits found in the country.
One of the aims of the new National Policy on Solid Minerals is to make sure the orderly development of the mineral resources of the country. There are tremendous opportunities for investments in the solid mineral sector of the Nigerian economy.
Prospecting licenses for investors (both local and foreign) to take part in the exploitation of the vast mineral resources in Nigeria is granted by the Federal Ministry of Solid Minerals Development.
Profile of Solid Mineral Deposits in Nigeria
The proven Nigerian oil reserves are 23 Billion barrels; the gas reserves are 160 Trillion cubic meters.
Over 40 million tonnes deposits of talc have been identified in Niger , Osun, Kogi, Ogun and Kaduna states. The Raw Materials Research and Development Council (RMRDC)’s 3,000 tonnes per annum catalytic Talc plant in Niger state is the only talc plant in the country. The talc industry represents one of the most versatile sectors of the industrial minerals of the world. The exploitation of the vast deposits would therefore satisfy local demand and that for export.
Gypsum is an important input for the production of cement. It is also used for the production of Plaster of Paris (P.O.P) and classroom chalk. A strategy for large-scale mining of gypsum is urgently required to sustain the existing plants and meet the future expansion. Currently, cement production is put at 8 million tonnes per annum while the national need is 9.6 million tonnes. About one billion tonnes of gypsum deposits are spread over many states in Nigeria.
There are over 3 billion metric tonnes of iron ore in deposits found in Kogi, Enugu and Niger States as well as the Federal Capital Territory . Iron Ore is being mined at Itakpe in Kogi State and is already being beneficiated, up to 67 per cent of iron. The Aladja and Ajaokuta Steel complexes are ready for consumer of billets and other iron products for down-stream industries.
An estimated 10 million tonnes of lead/zinc veins are spread over eight states of Nigeria . Proven reserves in three prospects in the east-central area are 5 million tonnes. Joint venture partners are encouraged to develop and exploit the various lead/zinc deposits all over the country.
Bentonite and Baryte
These are the main constituents of the mud used in the drilling of all types of oil wells. The Nigerian baryte has specific gravity of about 4.3. Over 7.5 million tonnes of baryte have been identified in Taraba and Bauchi States. Large bentonite reserves of 700 million tonnes are available in many states of the federation ready for massive development and exploitation.
There are proven reserves of both alluvial and primary gold in the schist belt of Nigeria in the south-western part of the country. The deposits are mainly alluvial and are being exploited on a small-scale. Private investors are invited to stake concessions on these primary deposits.
The occurrence of bitumen deposits in Nigeria is indicated at about 42 billion tonnes; almost twice the amount of existing reserves of crude petroleum. Analytical results suggest that this potential resource can be used directly as an asphalt binder. Most bitumen used for road construction in Nigeria is now imported.
Nigerian coal is one of the most bituminous in the world owing to its low sulphur and ash content and the most environment-friendly. There are nearly 3 billion tonnes of indicated reserves in 17 identified coal fields and over 600 million tonnes of proven reserves.
The national annual demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tonnes. A colossal amount of money is expended annually to import these chemicals by chemical and processing companies including tanneries and those in food and beverages, paper and pulp, bottling and oil sector.
There are salt springs at Awe ( Plateau State ), Abakaliki and Uburu ( Ebonyi State ), while rock salt is available in Benue State . A total reserve of 1.5 million tonnes has been indicated, and further investigations are now being carried out by Government.
Gemstones mining has boomed in various parts of Plateau, Kaduna and Bauchi states for years. Some of these gemstones include sapphire, ruby, aquamarine, emerald, tourmaline, topaz, garnet, amethyst; zircon, and fluorspar which are among the world’s best. Good prospects exist in this area for practical investments.
An estimated reserve of 3 billion tonnes of good kaolinite clay has been identified in many localities in Nigeria .