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Focus On Nigeria – The Next Frontier Economy ICES 2016

For Businesses In Nigeria, The International CEOs’ Economic Summit ICES 2016 Comes At An Opportune Moment As Democracy Has Made Business A Powerful Voice In Proffering Solutions Towards Lifting The Ailing Nigerian Economy

The Next Frontier Economy

Analysing  Nigeria’s Economy Towards The International CEOs’ Economic Summit | ICES November 28th and 29th 2016

Nigeria’s has a population of over 170 million people and is projected to be among the top 25 economies in the world by the year 2030. The population, growing at 2.83 percent per annum is the third fastest growing population in the world, behind India and Pakistan and is expected to double in 24 years if the current trend is maintained. Nigeria has a growing population, with the youth population estimated at 45 percent of total, most of which are literate and highly mobile. Nigeria at the end of 2014 had a GDP of US$568.5 billion and per capita GDP of US$2,548 and an average life expectancy of 55 years. With the coming of age of the Chinese economy, the world is actively looking for new growth frontiers with an educated labor force, low wages and low relative prices. Nigeria with her young population, low average wage rate and vast market, is positioning to become the next frontier economy and become the next factory of the world. With the current trade friendly incentive regime, the stage is set for Nigeria to fully tap into trade as a growth agent within an export promotion regime.


Economic Policy

Since the return to democratic rule in 1999, the government committed to liberal economic reforms which led to rapid economic growth at an average rate of 6.6 percent over the 16 year period. Key government policies emphasized the commitment to reform through the institution of a private sector led growth under market-oriented reforms.


In 2005 the government announced the signing of a Policy Support Instrument with the International Monetary Fund (IMF). This paved the way for the most comprehensive debt relief granted to Nigeria by the Paris Club of creditors to which Nigeria owed an estimated US$30 billion. By the debt relief terms Nigeria got a debt waiver for US$18 billion while the balance US$12 billion was to be paid in two installments within a twelve month period. This resulted in unprecedented economic growth that saw Nigeria becoming the top economy in Africa.


The Economic Structure

Nigeria’s key economic indicators are summarized in Table 1. Real GDP grew at an average 5.99 over the past eight years between 2006 and 2013. Nigeria’s economy is now rated No. 1 in Africa at US$509.97 billion for 2015. Inflation rate has averaged 10.36 percent over the same period, though it is now on a downward trend with the rate for 2013 at 8.5 percent and 2014 projected at 8.0 percent.


GDP GROWTH RATE 199 - 2015
GDP GROWTH RATE 199 – 2015

Table 1

Nigeria’s Economic Indicators

Economic indicators 2009 2010 2011 2012 2013 2014 2015
GDP*** at constant market prices (N bn) 49,856.10 54,612.26 57,511.04 59,929.89 63,218.72 67,152.79 69,023.93
Real GDP growth (%) 7.0 8.0 5.3 4.2 5.5 6.22 2.79
GDP at market prices (US$ bn) 169.50 369.10 414.10 460.90 514.99 568.50 481.07
GDP per capita US$ 1,098.60 2,316.80 2,466.40 2,738.90 2,973.30 2,548.40 2,548.20
Consumer price inflation (%) annual average 9.2 12.4 11.7 11.39 9.7 9.5 9.9
Population (m) Projected 154.30 159.30 167.90 168.30 173.20 175.15 180.05
Merchandise exports fob ($m) 56,789.07 80,579.38 99,878.08 96,904.91 97,818.22 82,595.80 45,887.74
Merchandise imports fob ($m) 31,119.98 50,117.98 66,775.80 57,396.04 55,300.75 61,593.74 52,334.76
Current-account balance $m) 14,021.12 13,269.47 10,757.46 17,515.51 19,205.15       906.54 15,438.64
Reserves excl. gold ($Bn) 42.382 32.339 32.639 43.830 42.847 32.00 29.13
Total external debt ($bn) 3.95 4.58 5.67 6.53 8.82 9.71 10.72
Crude oil production (mb/d) 1.8 2.1 2.2 2.1 1.9 1.8 1.5
Crude Oil Proven reserves (Billion Barrels) 22.0 22.0 22.0 22.0 22.0 22.0 22.0
Natural Gas Proven reserves (Trillion Cubic meters) 5.292 5.292 5.292 5.292 5.292 5.292 5.292
Exchange rate (av) N:$ 148.88 150.30 153.86 157.50 157.31 158.55 195.52

Source: Central Bank of Nigeria Annual Reports Various Issues; Statistical Bulletin Various Issues 

***Base year for GDP changed to 2010 in 2014. Data for 2010 – 2015 are rebased.

  • Degree of openness: The degree of openness of the Nigerian economy averaged 58.0 percent, indicating that there is still room for growth of the external sector of the economy. Exports are mainly concentrated in the petroleum sector, while imports are mainly for industrial and consumer goods. There is very little manufactured exports.
  • Monetary Policy: The focus of monetary policy remains the maintenance of price stability while at the same time accommodating Government’s efforts to stimulate output growth. The growth of monetary and credit aggregates will be contained at levels that will minimize inflation.
  • Exchange Rate: The core of the exchange rate policy if the maintenance of a stable exchange rate within a market determined exchange rate structure. The abolition of dual exchange rate has removed distortions in the economy thereby creating the right environment for investment.
  • Foreign Investment: To encourage foreign investment in the Nigerian economy, government introduced the Nigerian Enterprises Promotion Act of 1989, which reviewed the ownership structure of Nigerian Enterprises. It is now possible for foreigners to own up to 100 per cent equity in any business in Nigeria. Although there are forty (40) categories of enterprises reserved for Nigerians, foreigners can also participate in them, either wholly or in partnership with Nigerians provided that their equity contribution in such business is not less than twenty million Naira (US$55,000.00).
  • A number of incentives have been packaged for industries in Nigeria. These include: Pioneer status – which grants a five-year (seven years if the industry is set up in an economically disadvantaged area) 100 per cent tax holiday to an industry whose product is declared as a “Pioneer” under the relevant laws.
  • Tax Holiday: By the Amended by Act NO. 22 of 1971, companies are granted tax holiday on corporate income for the first five years. The Act seeks to encourage the establishment of such industries that government considers beneficial to Nigeria.  Among these sectors are large scale agribusiness and agro processing enterprises. This fiscal relief is for a non-renewable period of five years for pioneer industries and seven years for industries located in economically disadvantaged areas of Nigeria. Additional tax concessions are available to industries taking initiatives in the following areas:
  1. Local raw materials development
  2. Local value added
  3. Labour intensive process
  4. Export-oriented activities
  5. In plant training
  6. Investment in economically disadvantaged areas


Tax Relief for Research and Development: Up to 120% of expenses on R & D are tax deductible, provided that such R&D are carried out in Nigeria. For R&D on local raw material utilization, up to 140% of expenses are tax deductible.

Foreign exchange rate policies

The major objectives of exchange rate policies under the SAP have been hinged on the need to achieve monetary, exchange rate and price stability under a market determined exchange rate regime.


Repatriation of Imported Capital

An approved “Status” permit for imported capital investment is conferred on companies with non-resident investment in cases where the original investment was in the form of equity either by way of cash and/or plant and machinery.  The purpose of this “Status” is to facilitate timely repatriation of remittances or other capital claims.

Foreign Currency Domiciliary Account

Banking regulations in Nigeria make it possible for exporters of non-oil products to retain 100% of the proceeds of export in bank account denominated in foreign currency, for external transactions or conversion to Naira but in accordance with existing Central Bank of Nigeria guidelines.

Export Incentives

Government objectives in this area is to achieve economic development, healthy balance of payments, and other gains from international trade. Export incentives include:

Export Development Fund: Provides direct financial assistance to Nigerian exporting companies to cover part of their initial expenses in respect of export promotion activities e.g. export market research, export oriented trade mission etc.

Export Expansion Grant Fund: Provides cash inducement to exporters of semi-manufactured and manufactured products to enable them increase their export product markets coverage.

Export Adjustment Scheme Fund: Serves as supplementary export subsidy for companies dealing with high costs of production arising mainly from infrastructural deficiencies and other factors beyond the control of exporters.

Duty Drawback/Scheme: This is a scheme whereby exporting firms are allowed 100% refund of all duties paid on imported inputs upon shipment. Duty refund includes duty paid in respect of raw materials and other inputs entering into export production.

Pioneer Status: The provision of the Industrial Development (Income Tax Relief) Act of 1971 with respect to pioneer status shall apply to any manufacturing exporter who exports at least 50 per cent of annual turnover.

Capital Assets Depreciation Allowances: Provide an additional annual depreciation allowances of 51 per cent on plants and machinery to manufacturing exports who exports at least 50 per cent of their annual turnover provided that the product has at least 40 pr cent local raw material content or 35 per cent local value added.

Tax Relief on Interest Income: Designed to stimulate and encourage banks to grant credit facilities to Nigeria exporters.

Retention of Export Proceeds: This allows exporters to retain 100 per cent of their export proceeds in Domiciliary Account, which they must open for that purpose with a bank in Nigeria.

Other major incentives include the Manufacture-in-Bond Scheme.

Export License Waiver: No export license is required for the export of manufacturers or processed products.  Also exports have been exempted from exercise tax.

Export Processing Zones and Export Credit Guarantee/Insurance Scheme: Specific export incentives include:

  1. Repatriation of foreign capital investment in the Zones at any time, with capital appreciation of the investment;
  2. Unfettered remittance of profits and dividends earned by foreign investors in the Zone;
  • No import or export licenses required;
  1. Up to 50 per cent of the products may be sold in the customs territory against a valid permit, and on payment of appropriate duties;
  2. Up to 100 per cent foreign ownership of business in the Zones is allowable; and
  3. Employment of foreign managers and qualified personnel by companies operating in the Zones

Financial intermediation


There are currently 26 licensed banks operating in Nigeria, compared to 98 operating banks in 2005. The reduction in the number of operating banks is due to the consolidation in the industry as part of the financial sector reforms. Development banks include the Bank of Industry (BOI) which is an amalgamation of Nigeria Industrial Development Bank (NIDB), the National Bank for Commerce and Industry (NBCI) and NERFUND, the Bank of Agriculture (BOA), and several State Development Finance Corporations. Other sources of investible funds include the specialized funding agencies like the Nigeria Export Import Bank (NEXIM) and the Small and Medium Industry Equity Scheme. The development banks provide soft loans to small and medium enterprises that are able to contribute to specific development objectives and goals.

The Stock market:

Nigeria has an active stock market which was included in the JP Morgan index of emerging markets.



  • Power
  • Roads
  • Airports
  • Trade Infrastructure
  • Banking and Finance
  • Agriculture
  • Manufacturing
  • ICT
  • Garments and Footwear
  • Textiles
  • Small Machinery

For businesses in Nigeria, the International CEOs’ Economic Summit ICES 2016 comes at an opportune moment as democracy has made business a powerful voice in proffering solutions towards lifting the ailing Nigerian economy. Sectors such as exports, telecoms & broadband, technology/new media, energy, agriculture, franchising and manufacturing are key issues for a country like Nigeria in this era of decelerated economic growth.  The ability to facilitate trade as well as the building and strengthening of B2B  links is becoming increasingly important and relevant  to a country like Nigeria as trade barriers are falling and new technologies are connecting markets, societies and cultures as never before.

Bringing together business executives, industry and economic experts, government regulators and investment opportunities, the ICE Summit intends to identify opportunities where businesses can add value beyond how it is already.

It is exciting to note that such proven business gurus as Professor Pat Utomi, Tutu Agyare, Managing Partner and Chief Investment Officer Nubuke Investments, Nina Vaca, Chairman and Ceo of Pinnacle Group, Tony Jimenez, CEO of Microtech, Jeff Vigil, CEO of My Business Matches, Shamshudeen Usman, Former Minister for National Planning July 2007-September 2013 and others, have been engaged to facilitate the summit.

ICESUMMIT NOV 2016Topics that will be discussed at the summit are seen to be key issues affecting the private sectors and one they will be most interested to discuss in such a forum.   They are:

Dscussion Topics: Exploring sustainable Policies, mitigate Business stumbling over politics.

(Discussions) How Do CEOs’ Of Blue-chip Companies & Small/Medium Business Executives Thrive, Grow Corporate Revenue and Lead In A Dwindling Economy.

(Discussions) Developing The Human Capital, A Panacea For Building Healthy Business Communities. (Nigeria Has Tremendous Human Capital And Human Capital Is A Huge Asset For Global Investment).

Financing Start-ups & SMEs In A Developing Economy.

ICES 2016
Mr Charles Nicholas, The International Coordinator Talking About ICES 2016

Defining ICE summit 2016 to a number of journalists, the International Coordinator  of the summit, Mr. Charles Nicholas at the Churchgate Tower, said ” It is a platform where senior executives will tinkers ways through which they can expand their brand reach as well offer them a platform to do business globally, build, empower and give support to SME’s for a more robust economy”.  He also said government needs to enact sustainable laws and policies to empower the SMEs which will in turn create more employment and have great impact on the economy. ICES Nov 2016

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Osa Felix Asemota holds a degree in economics and an MBA both from the Obafemi Awolowo University Ife. He trained at the International Monetary Fund Institute in 1991 as a Balance of payments specialist. He is also an alumnus of Euromoney Training and the National Institute of Rural Indistrialization in Hyderabad, India. He had extensive work experience as an economist at the Central Bank of Nigeria (CBN) including covering the Oil and Gas sector, Money and Banking Division, the stock market doing stock market indices, and finally an extensive stint in the Balance of Payments section in the External Sector Division. He went on secondment to the National Economic Reconstruction Fund where he distinguished himself managing the reporting system to the African Development Bank on the utilization of the 100 Units of Account (US$144.0 million) line of credit and more.....
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