1. Nigerian Investment Promotion Commission Plot 1181, Aguiyi Ironsi Street, Maitama District, Abuja. 09-4134317 www.nipc-nigeria.orgwww.nipc-nigeria.org. PRESENTATION BY ENGR. MUSTAFA BELLO, FNSE EXECUTIVE SECRETARY/CEO NIGERIAN INVESTMENT PROMOTION COMMISSION AT THE DURING THE VISIT OF TAIWANESE DELEGATION TO NIGERIA MARCH 24, 2005

2. ‘ VENTURE CAPITAL SCHEME PROSPECTS IN NIGERIA’

3. TABLE OF CONTENTS 1.Country Profile 2.Nigeria – Now ; a preferred Destination 3.Strategic issues in improving the Investment Environment 4.Positive strides in improving the economy 5.Improved Infrastructure 6.Venture Capital Scheme 5.Generous Package of Investment Incentives 6.The NIPC’s Facilitative Role in servicing of the Scheme 7.Conclusion

4. NIGERIA – Country Profile  Population: Over 120 million  Major Ethnic Groups: Hausa, Igbo & Yoruba  Other Ethnic Groups: About 340  Religion: Christianity, Islam  Time: GMT + 1  Official Language: English  Currency: Naira (N): = 100 kobo  Exchange Rate: US$ = N134  Weights and measurements: Metric

5. Nigeria – Now, A preferred Destination  Prime investment location in Africa with : - an internal market of over 120 million people that extends to other African markets especially the West Coast -Sub-regional and regional integration, providing a combined market of over 200 million people - Strategic location along the West Africa sea routes with well-developed harbours and airports  A good tourism destination – with a multi-cultural life style  A relatively well-educated and easily trainable labour pool

6. Strategic Issues in Improving the Investment Environment  Infrastructure Rehabilitation/Development  Streamlining of Regulatory Agencies -NIPC/Nigeria Immigration Service Cooperation  Public Sector Reforms: -Nigerian Ports Reforms, Aviation, NEEDS, etc  Deregulation and Privatization Programme  Strengthening the institutional capacity of public administration to pursue openness, transparency and democratic ideals

7. Positive Strides in Improving the Economy  Empowerment of the private sector: - Abrogation of all laws inhibiting private sector participation in some activities  Growing Public-Private Partnership (PPP)  SMEs development initiatives: -Small & Medium Enterprise Dev. Agency of Nigeria (SMEDAN)  Empowerment of Approving Agencies: -Nigeria Bank of Industry (BOI) - Nigeria Agricultural & Rural Development Bank  (SMIEIS) Scheme - 10% of PBT of Commercial banks for SME Equity Investment Scheme (SMIEIS)  Generous incentives, which can even be negotiated.

8. Improved Infrastructure  Telecommunication: - from a teledensity of 0.4 per 100 in 1999 to over 3.92/100-June, 2004.  Road Transportation: -from 108,000km of road network in the 90s, out of which 30,000 are paved while the rest are unpaved; now 60,000km of paved roads out of a total of 194,000km as at Feb. 2003.  Electricity: generation has improved from 2000mw in 1999 to over 4000mw currently.

9. PROPOSED VENTURE CAPITAL SCHEME  Nigeria in collaboration with the Taiwan will be setting up a Venture Capital Scheme (VCS); which will promote, finance and develop industries in small scale sectors.  It intends to route its various forms of assistance through the state-level institutions viz the banking system in Nigeria  As part of its on-going exercise to fill the gaps in the existing schemes of assistance, the VCS will operate a Venture Capital Scheme for which purpose it will constitute a Venture Capital Fund.

10. OBJECTIVE  The objective of the scheme is to provide a window within VCS by constituting a venture capital fund of US$200 million  US$100 million will be contributed by both countries each  For funding entrepreneurs who have conceived ventures having special characteristics to be innovative but at the same time may not qualify for assistance through the conventional route of term financing.

11. OBJECTIVE Cont’  The scheme will give exclusive focus on small scale projects qualifying for assistance from VCS. Projects involving new and untried/untested processes and technologies which have scope for commercial application with characteristics of high risk and high return are one example of the type of projects which VCS will look for extension of support out of its Venture Capital Fund.

12. NATURE OF ASSISTANCE  The nature of assistance would primarily be in the form of equity or equity type instruments, though, in exceptional cases, assistance by way of loans may also be considered  In case of equity/ equity type instruments, it is expected that the venture company would go in for an IPO within a reasonable period of time to offer an exit route for the equity investment or be willing to go in for buy back of shares

13. Extent of Assistance  Extent of assistance shall be decided on a case-to-case basis on detailed assessment of the requirements. No minimum/ maximum limits have been fixed in respect of the quantum of assistance.

14. CURRENT STATUS  The Nigerian Investment Promotion Commission, Federal Ministry of Finance and The Central Bank of Nigeria are presently talking on the modalities on how to raise the funds.  They looking at two possibilities which are both private sectors oriented:

15. CURRENT STATUS CONT’s  Small and Medium Enterprises Investment Equity Scheme (SMEIEIS)  Selected Multinationals to invest in the scheme.  Etc.

16. The NIPC’S Facilitative Role in Servicing the scheme  The Investment Promotion Agency of Government  Established by Nigerian Investment Promotion Commission Act 16 (Decree) of 1995 –Major Features:  Liberalization of the economy  -100% ownership of investment in any sector (except ones listed in the ‘negative’ list) irrespective of nationality  Guarantee against nationalization or expropriation by government of the federation  Guarantee unconditional transferability/repatriation of funds through an authorized dealer, in freely convertible currency  An enterprise, in which foreign participation is permitted, shall after its incorporation with CAC, be registered by NIPC

17. NIPC & Investors Services –Facilitate the procurement of all business approvals Business Registration Expatriate Quota –Facilitate the administration and approval of investment incentives Pioneer Status –Negotiates specific incentives for the investor, in consultation with appropriate government agencies such as FMF, FMI –Provides up-to-date information on investment opportunities available in the country Brochures Investors’ Guide

18. NIPC & Investors Services (Cont’d) –Advocates for better business environment in the economy –Identifies difficulties and problems encountered by investors, proffers solutions and renders assistance –Initiates, organises and facilitates ‘match-making’ meetings between investors –Facilitate/organise outbound and inbound investment missions

19. Conclusion With the bias for private sector development, the NIPC is positioned to ‘facilitate’ rapid growth of investments in Nigeria by both foreign and local investors. Nigeria offers one of the most rewarding investment destination, not just in Africa but, in the World. Thank you for your attention!