This information is derived from the State Department's Office of Investment Affairs’ Investment Climate Statement. Any questions on the ICS can be directed to
Last Published: 8/12/2016

Attitude toward Foreign Direct Investment

In 1995 the Nigerian Investment Promotion Commission Act dismantled years of controls and limits on foreign direct investment (FDI), opening nearly all sectors to foreign investment, allowing for 100 percent foreign ownership in all sectors (with the exception of the petroleum sector, where FDI is limited to joint ventures or production sharing contracts), and creating the Nigerian Investment Promotion Commission (NIPC) with a mandate to encourage and assist investment in Nigeria. The NIPC features a One-Stop Investment Center that nominally includes participation of 27 governmental and parastatal agencies (not all of which are physically present at the OSIC, however) in order to consolidate and streamline administrative procedures for new businesses and investments. Foreign investors receive largely the same treatment as domestic investors in Nigeria, including tax incentives (see 5.2 Investment Incentives). However, without strong political and policy support, and because of the unresolved challenges to investment and business in Nigeria, the ability of the NIPC to attract new investment has been limited.

The Government of Nigeria (GoN) has continued to promote import substitution policy for various reasons. In the face of dwindling foreign exchange reserves because of lower oil prices, the GoN hopes to reduce demand for foreign exchange. The GoN believes that trade restrictions and local content requirements will attract investment that would develop domestic capacity to produce and manufacture products and services that would otherwise be imported. The import bans and high tariffs used to advance Nigeria’s import substitution goals have been undermined by smuggling of targeted products (most notably rice and poultry) through the country’s porous borders, and by corruption in the import quota systems developed by the GoN to incentivize domestic investment. Despite the GoN’s stated goal to attract investment, investors generally find Nigeria a difficult place to do business.

Other Investment Policy Reviews

The OECD completed an investment policy review of Nigeria in May 2015. (The WTO published a trade policy review of Nigeria in 2011 which also includes a brief overview and assessment of Nigeria’s investment climate. That review is available at
In 2009, the United Nations Council on Trade and Development (UNCTAD) published an investment policy review of Nigeria and a Blue Book on Best Practice in Investment Promotion and Facilitation, both of which are available at The policy review identified Nigeria’s need to diversify FDI away from the oil and gas sector by improving the regulatory framework, investing in physical and human capital, taking advantage of regional integration and reviewing external tariffs, fostering linkages and local industrial capacity, and strengthening institutions dealing with investment and related issues.

Laws/Regulations on Foreign Direct Investment

The NIPC Act of 1995 allows 100 percent foreign ownership of firms, except in the oil and gas sector where investment is limited to joint ventures or production-sharing agreements. Laws restrict industries to domestic investors if they are considered crucial to national security, such as firearms, ammunition, and military and paramilitary apparel. Foreign investors must register with the NIPC after incorporation under the Companies and Allied Matters Decree of 1990. The Act prohibits the nationalization or expropriation of foreign enterprises except in cases of national interest. Lack of transparency in government and corruption are endemic but the Embassy is unaware of specific instances of interference by the government.

Nigerian laws apply equally to domestic and foreign investors. These laws include the Nigerian Oil and Gas Content Development Act 2010, Nigerian Minerals and Mining Act of 2007, Nigeria Extractive Industries Transparency Initiative (NEITI) Act of 2007, Central Bank of Nigeria Act of 2007, Electric Power Sector Reform Act of 2005, Money Laundering Act of 2003, Investment and Securities Act of 2007, Foreign Exchange Act of 1995, Banking and Other Financial Institutions Act of 1991, and National Office of Technology Acquisition and Promotion Act of 1979.

Business Registration

Nigeria does not have an on-line single window business registration website, as noted by Global Enterprise Registration ( The Nigerian Corporate Affairs Commission maintains an information portal. On average, it takes 12 procedures and 44 days to establish a foreign-owned limited liability company (LLC) in Nigeria (Lagos), slightly faster than the regional average for Sub-Saharan Africa. Time required is likely to vary in different parts of the country. Only a local counsel accredited by the Corporate Affairs Commission can incorporate companies in Nigeria. According to the Nigerian Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, foreign capital invested in the LLC must be imported through an authorized dealer, which will issue a Certificate of Capital Importation. This certificate entitles the foreign investor to open a bank account in foreign currency. Finally, a company engaging in international trade must get an import-export license from the Nigerian customs service.

The Nigerian Investment Promotion Commission has established a One Stop Investment Center, co-locating relevant government agencies to one location in order to provide more efficient and transparent services to investors. Investors may pick up documents and approvals that are statutorily needed to set up an investment project in Nigeria. The Center assists with company incorporation, business permits and registration, tax registration, immigration and customs issues. The Nigerian government has not established uniform definitions for micro, small, and medium enterprises (MSMEs) with different agencies using different definitions.

Industrial Strategy

Nigeria’s trade regime remains highly protectionist and distorting with the aim of incentivizing growth in Nigeria’s domestic industrial and agricultural capacity. Nigeria bans the import of poultry, pork, beef, eggs, cement, textiles, glass bottles, and numerous other items in order to protect or encourage domestic production. In addition, the country imposes a combined ad valorem import duty (tariff plus levy) of 70 percent or higher on more than 40 tariff product lines, including tobacco products, rice, wheat flour, sugars, salt, and new passenger vehicles. High tariffs on agricultural commodities and import bans aim to spur domestic agricultural sector growth by actively promoting import substitution of staples, including rice, cassava, palm oil, cocoa, and cotton.

In October 2013 the GoN announced the National Automotive Industry Development Plan (NAIDP) as an effort to restart the country’s domestic automotive manufacturing sector, create skilled jobs, develop local supply chains, and reduce automobile imports. The central feature of the NAIDP is a 35% levy assessed on automobile imports, over and above the 35% tariff already levied, for an effective total ad valorem duty of 70%. As an additional incentive to promote investment in Nigeria’s auto sector, the NAIDP allows companies that are manufacturing or assembling cars in Nigeria to continue to import two vehicles under the former 35% tariff for every one vehicle produced in Nigeria.

Privatization Program

The Privatization and Commercialization Act of 1999 established the National Council on Privatization, the policy-making body overseeing the privatization of state-owned enterprises (SOEs), and the Bureau of Public Enterprises (BPE), the implementing agency for designated privatizations. The BPE has focused on the privatization of key sectors, including telecommunications and power, and calls for core investors to acquire controlling shares in formerly state-owned enterprises.

Since 1999, the BPE has privatized and concessioned more than 140 enterprises, including an aluminum complex, steel complex, cement manufacturing firms, hotels, petrochemical plant, aviation cargo handling companies, and vehicle assembly plants, electricity generation and electricity distribution companies. The transmission company remains state-owned, but operated by an international operations and management contractor. Foreign investors can and do participate in the BPE’s privatization process.

The National Assembly has questioned the propriety of some of these privatizations, with one case related to an aluminum complex privatization recently the subject of a Supreme Court ruling on ownership. Nevertheless, the GoN’s long-delayed sale in December 2014 of the state-owned Nigerian Telecommunications and its mobile arm, Mobile Telecommunications, shows a continued commitment to the privatization model. The GoN remains interested in developing public-private partnerships to attract foreign capital to support basic infrastructure development, such as the Design-Build-Operate-Transfer of the Lagos-Ibadan Expressway, a major highway in the southwestern part of the country.

Screening of FDI

The NIPC Act of 1995 contains a negative list that prohibits private investment, both foreign and domestic, in the following sectors:

  1. production of arms, ammunition, etc.;

  2. production of and dealing in narcotic drugs and psychotropic substances;

  3. production of military and para-military wears and accoutrement, including those of the Police and the Customs, Immigration and Prison Services; and

  4. such other items as the Federal Executive Council may, from time to time, determine.

Nigeria does not have an entity comparable to the U.S. Treasury’s Committee on Foreign Investment in the United States (CFIUS) that screens and reviews investment into sectors deemed sensitive.

Competition Law

Nigeria has no consolidated competition law. Under the Investment and Securities Act, the Nigerian Securities and Exchange Commission is empowered to determine whether any business combination is likely to substantially prevent or lessen competition. There are also sector-specific antitrust regulations. Several consolidated competition bills have been drafted and considered by Nigeria’s National Assembly in the last 15 years, but none have passed into law. For example, the Federal Competition and Consumer Protection Bill of 2014, drafted by Nigeria’s Bureau of Public Enterprises (BPE) and forwarded to the National Assembly by Nigeria’s Federal Executive Council in February 2015 remains pending in the National Assembly. A key feature of a previous BPE-drafted bill was the establishment of a Federal Competition Commission to oversee antitrust and anti-competitive activities. Nigerian businesses have been known to seek to protect and expand market share through political connections and economic protections, rather than through free and fair competition, and vested interests may seek to retain such a system. In March 2016, the President of the Nigerian Senate noted that the Competition and Consumer Protection Bill was included in a group of nine bills that a UK Department for International Development expert panel recommended to reform Nigeria's business environment.

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More Information

Nigeria Economic Development and Investment Law