Areas of industrial investment which receive the bulk of government industrial incentives include:

  1. Industries which can source their raw materials locally e.g. in the agro and agro-allied sub-sectors for which there are abundant natural resources in Nigeria, including food preparation, e.g. fruit drinks, cereal milling, feed mills and vegetable oil processing;
  2. Industries, which support food production programmes through local manufacture of chemicals, equipment and light commercial vehicles in particular, and chemicals as well as petrochemical-based manufacturing industries in general;
  3. Industries with multiplier effects such as flat sheet mills and machines tools industry including foundries and engineering industries for spare parts.
  4. Petrochemical and liquefied natural gas projects;
  5. Investment in research institutes particularly in the area of adaptive research and commercialisation of local inventions;
  • Foundry and forges;
  • Metal fabrication;
  • Pharmaceutical;
  • Food processing;
  • Leather and leather products;
  • Textiles and wearing apparel;
  • Non-metallic building materials, e.g. bricks, ceramics and glass.

Mining and Mineral Processing

This sector offers tremendous opportunities for interested investors. The Federal Government of Nigeria welcomes investor in the following areas:

  • - Coal
  • - Gemstone cutting and polishing;
  • - Gold processing;
  • - Mineral benefaction plants for gypsum talc, kaolin, marble, dolomite, baryte;
  • - Mini-sugar production;
  • - Lead and zinc;
  • - Refractory bricks;
  • - Processing of salt from sea water;
  • - Small and medium-scale plant for sheet metal production;-
  • - Bottled mineral water;
  • - Mining of industrial minerals;
  • - Telecommunications.

Operating Licenses

Certain enterprises require approvals and/or licences to operate whether they are owned by Nigerians or not. Examples of the sectors where licences are needed are banking where a

  • Central Bank of Nigeria licence is needed,
  • Insurance where a licence from the National Insurance Commission is required,
  • The oil sector where Department of Petroleum Resources licences are needed and,
  • The telecommunications sector where licences from the Nigerian Communications Commission are needed.

The detailed regulations identifying the various licences available and stating what is required to obtain each of them are numerous. It is therefore important to check with the relevant body.


The old and cumbersome, restrictive exchange control laws have been repealed by the Government. Foreign investors are free to bring in capital for investment, and they are free to repatriate both the income and capital proceeds on such capital.

Monies brought in or taken out may be so dealt with under either of two schemes:

  • The Autonomous (now interbank) Foreign Exchange Market (AFEM), a relatively free market in which both the Central Bank of Nigeria (CBN) and the Authorised Dealers participate as traders.
  • Debt Conversion Programme (DCP). Under this scheme the foreign investor buys Nigeria debt stock with hard currency and then sells the stock to the CBN in return for naira to be invested in Nigeria. The CBN benefits by getting Nigeria's foreign debt stock reduced, and the foreign investor gets an exchange rate better than available on the AFEM. For details visit CBN website


Companies income tax rate is 30%. There is an additional education tax of 2% on the income of companies. Withholding tax of 5% is chargeable on unearned income. For foreign investors, the 10% withholding tax on dividends is the final tax on dividends. The top personal income tax rate is 25%.

Value added tax (VAT) is chargeable on goods and services at 5%. The Capital Gains Tax rate is 10%, and shares in companies are exempt from capital gains tax. This is a very significant tax relief for investors. Stamp duty is chargeable on various documents at various flat and ad valorem rates, depending on the nature of the instrument, up to a maximum of 2% of the value involved. There are Pay-As-You-Earn income tax regulations, and various social insurance-type contributions are compulsory.

There are also a tax holiday and tax allowance incentives for investors. For example, tax holidays for up to five years may be granted to investors in the manufacturing and gas utilisation sectors. Companies operating in Nigeria's export processing zones are exempted from all taxes including both import and export duties.

Further, import duty relief may be obtained on certain machinery, and there are tax allowances for using local raw materials in manufacturing, being a labour-incentive (and therefore employment-generating) business, expenditure on training, infrastructure, research and development and in economically disadvantaged areas.


For further information visit


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