Strategies for foreign investments in Nigeria: a central bank perspective.

Abstract

The strategies adopted by Nigeria on foreign investments considered in this paper consist of a nexus of incentive measures designed to attract foreign investors as well as policies and regulations aimed at directing the flow of investments with a view to facilitating economic growth and a more even development. The major elements of the incentives comprise tax relief for Research and Development (R & D), pioneer status, tax-free dividends, Customs duty draw back on raw materials used for export production, export credit guarantee and insurance scheme, etc. Another important component of the incentive framework is the development of some basic industries and infrastructures considered necessary for expanding and consolidating the industrial base of the economy. The paper outlines the stages a foreign investor has to pass through when establishing a new company in Nigeria and discusses the administrative machinery for executing government strategies mentioned above. It also briefly presents the new processes laid down for the repatriation of profits and dividends. The paper concludes that the on-going resolute pursuit of the policy of rational economic reform and deregulation under the aegis of the Structural Adjustment Programme (SAP), by fostering international confidence and a more healthy business environment represents a significant additional incentive to foreign investors.