Nigeria is a former British protectorate in Sub-Saharan West Africa (See figure opposite) and has been independent since 1960. Before the Europeans came to Nigeria there were Hausa kingdoms in the north based in Kano, Katsina, Zaria and Nupe from the 11th to the 14th centuries, and Yoruba kingdoms in the south based in Ife, Oyo and Benin during the 14th and 15th centuries. The first Europeans to visit and trade with Nigerians were the Portuguese in the 15th century who set up Lagos as a trading centre.

Following the arrival of the Portuguese the British established themselves in Lagos.  British explorers such as Hugh Clapperton and Richard Lander explored the north of Nigeria in the 1820’s visiting the Emir of Kano and the Sultan of Sokoto.  William Baikie explored the Niger and Benue Rivers and set up an inland base at Lokoja in the 1850’s.

The “Oil Coast”, centred on the Niger Delta, became an important exporter of palm oil.  The Royal Niger Company ran much of southern Nigeria from 1879 to 1898, when the British government finally took over control of the area. There was 60 years of British rule in Nigeria and British common law, administrative bureaucracy and language remain as a legacy.

The political capital is Abuja whereas the financial capital is Lagos. Nigeria is divided into 36 states and one federal capital territory (See figure opposite). The national legal system is based on British common law, although in certain circumstances traditional law is observed. Some northern states have also adopted Sharia Law which is only applicable to Muslims.

Prior to independence, the British undertook small scale mining projects in Nigeria involving mostly gold, tin, tungsten and lead-zinc. Since independence in 1960 the mining industry has been neglected in favour of the oil industry.  However, small scale niobium and tantalum mining has recently, become popular amongst the locals.

Nigeria is tropical in the south to subtropical in the north. The wet season is from April to October, which does not necessarily stop exploration. Maximum daily temperatures range from 28°C in the south to over 40°C in the north.  Climate and weathering profiles are similar to those found in northern Australia.

 

Nigerian Business Environment

 

The Nigerian Government is strongly supportive of foreign investment. The Nigerian Investment Promotion Commission (“NIPC”) has been established to promote and facilitate foreign investment in Nigeria. NIPC operates as a “one-stop-shop” for facilitating investment. Their services are provided in a coordinated, streamlined, efficient and transparent manner to meet the needs of investors.

Reasons given by NIPC to invest in Nigeria include:

• Abundant resources: Nigeria has enormous resources, most of which are yet to be fully exploited. They include mineral, agricultural and human resources.

• Large market: Nigeria offers the market in sub-Saharan Africa, with a population of about 120 million people. The Nigerian market potential also stretches into the growing West African sub-region.

• Political stability: Nigeria offers a stable political environment.

• Free market economy: The Government has created a favourable climate for business and industrial ventures. Administrative and bureaucratic procedures have been greatly streamlined. The Government has put in place policies and programmes that guarantee a free market economy.

• Robust private sector: The country has a dynamic private sector, which has assumed greater responsibilities under the new economic environment.

• Free flow of investment: Exchange control regulations have been liberalised to ensure free flow of international finance. There is now unrestricted movement of investment capital.

• Attractive incentives: A comprehensive package of incentives has been put in place to attract investment.

• Fast growing financial sector: There is a well developed banking and financial sector. The investor has easy access to working capital and other credit facilities.

• Skilled labour: There is an abundance of skilled labour, most of which has been trained in the petroleum industry.

• Infrastructure: Rapid development of physical and industrial infrastructure, in terms of transportation, communications, electricity and water supply.

• Tax incentives have also been emplaced. The Companies Income Tax Act has been amended in order to encourage potential and existing investors and entrepreneurs. The current rate in all sectors, except for petroleum, is 30% plus an Education Tax of 2%.

• Taxation holidays, known as Pioneer Status, are also available for between three and five years and are aimed at enabling the industry concerned to make a reasonable level of profit within its formative years. The length of the holiday varies depending on performance of the company and its location in economically disadvantaged local government areas.