The GoB publicly emphasizes the importance of attracting Foreign Direct Investment (FDI) and drafted an investment facilitation law recommended by the 2014 Organization for Economic Co-operation and Development (OECD) Investment Review.  While the draft was completed in 2016 with technical assistance from UNCTAD, it was never enacted.  The draft is still under review and will be presented to Parliament for approval.  The GoB has launched initiatives to promote economic activity and foreign investment in specific areas, such as establishing a diamond hub which brought more value-added businesses (i.e., cutting and polishing) into the country.  Additional investment opportunities in Botswana include large water projects, electricity, transportation, telecommunication infrastructure projects, horticultural production, and agro processing. Economists have also noted Botswana’s considerable potential in the mining, mineral processing, beef, tourism, solar energy, and financial services sectors.  BITC assists foreign investors with projects intended to diversify export revenue, create employment, and transfer skills to the citizens of Botswana.  The High-Level Consultative Council (HLCC), chaired by the President, and an Exporter Roundtable organized by BITC and Botswana’s Exporters and Manufacturers Association (BEMA), are mechanisms employed by the GoB to focus on a healthy business environment for FDI.

Botswana’s 2003 Trade Act reserves licenses for citizens in 19 sectors, including general trading establishments, gas stations, liquor stores, supermarkets (excluding chain stores), bars (other than those associated with hotels), certain types of restaurants, boutiques, auctioneers, car washes, domestic cleaning services, curio shops, fresh produce vendors, funeral homes, hairdressers, various types of rental/hire services, laundromats, specific types of government construction projects under a certain dollar amount, certain activities related to road and railway construction and maintenance, and certain types of manufacturing activities including the production of furniture for schools, welding, and bricklaying.  The law allows foreigners to participate in these sectors as minority joint venture partners in medium-sized businesses.  Foreigners can hold the majority share if they obtain written approval from the trade minister.  Foreign companies have access to about 46 trading licenses in different categories.  It takes approximately five working days to obtain a license.

The Ministry of Investment, Trade, and Industry (MITI) administers the citizen participation initiative and takes an expansive interpretation of the term chain stores, so that it encompasses any store with more than one outlet.  This broad interpretation has resulted in the need to apply exemptions to certain supermarkets, simple specialty operations, and general trading stores.  These exceptions were generally granted prior to 2015 and many large general merchandise markets, restaurants, and grocery networks are owned by foreigners as a result.  Since 2015, the GoB has denied some exception requests, but reports they have approved some based on localization agreements directly negotiated between the ministry and the applying company.  These agreements reportedly include commitments to purchase supplies locally and capacity building for local workers and industry.  BITC conducts due diligence on companies that are looking to invest in the country and the Directorate of Intelligence Services (DIS) handles background checks for national security.

Botswana has been a World Trade Organization (WTO) member since 1995.  In 2016, the WTO conducted a trade policy review of the Southern African Customs Union to which Botswana belongs ( https://www.wto.org/english/tratop_e/tpr_e/tp322_e.htm ).

Botswana underwent an ICT Policy Review and e-Commerce strategy review with UNCTAD and the report was released in October 2021 (https://unctad.org/system/files/official-document/dtlstict2021d4_en.pdf).  Botswana sees this as a critical move to diversify the economy and position the country to be a bigger player in the global economy.

To operate a business in Botswana, one needs to register a company with the GoB’s CIPA through the OBRS at: https://www.cipa.co.bw/types-of-entities 

CIPA asserts that the company registration process can be completed in a day and is integrated with BURS which allows for a fast-tracked tax registration in 30 days.  Additional work is required to open bank accounts and obtain necessary licenses and permits.

BITC ( www.bitc.co.bw ), the GoB’s integrated investment and trade promotion authority, was designed to serve as a one-stop shop to assist investors in setting up a business and finding a location for operation.  BITC’s ability to streamline procedures varies based on GoB entity and bureaucratic requirements.  BITC assesses investment projects on their ability to diversify the economy away from its continued dependence on diamond mining, contribute towards export-led growth, and job creation for and skills transfer to Batswana citizens.  BITC also hosts the Botswana Trade Portal ( https://www.botswanatradeportal.org.bw ) that is designed to ease trade across borders.  It is a single point of contact for all information relating to import and export to and from Botswana and represents relevant ministries and parastatals.

Botswana has several incentives and preferences for both citizen-owned and locally based companies.  Foreign-owned companies can benefit from local procurement preferences which are usually required for government tenders.  MITI instituted a program in 2015 to give locally based small companies a 15 percent preferential price margin in GoB procurement, with mid-sized companies receiving a 10 percent margin, and large companies a five percent margin.  Under this policy, MITI defines small companies as having less than five million pula in annual revenue reflected in their financial statements, medium companies with five to 20 million pula in revenue, and large companies with revenues exceeding 20 million pula.  The directive applies to 27 categories of goods and services ranging from textiles, chemicals, and food, as well as a broad range of consultancy services.  The government can also offer up to 50 million pula in funding through the Citizen Entrepreneurial Development Agency (CEDA) to joint ventures between foreign and citizen owned companies.

For Companies Act registration purposes, enterprises are classified as:  Micro Enterprises – fewer than six employees including the owner and an annual revenue below 60 thousand pula; Small Enterprises – fewer than 25 employees and an annual revenue between 60 thousand and 1.5 million pula; Medium Enterprises – fewer than 100 employees and annual revenue between 1.5 and 5 million pula; Large Enterprises – over 100 employees and an annual revenue of at least 5 million pula.  This classification system permits foreigners to participate as minority shareholders in medium-sized enterprises in the 35 business sectors reserved for citizens.

The GoB neither promotes nor restricts outward investment.

Kenya has enjoyed a steadily improving environment for FDI.  Foreign investors seeking to establish a presence in Kenya generally receive the same treatment as local investors, and multinational companies make up a large percentage of Kenya’s industrial sector.  The government’s export promotion programs do not distinguish between goods produced by local or foreign-owned firms.  The primary regulations governing FDI are found in the Investment Promotion Act (2004).  Other important documents that provide the legal framework for FDI include the 2010 Constitution of Kenya, the Companies Ordinance, the Private Public Partnership Act (2013), the Foreign Investment Protection Act (1990), and the Companies Act (2015).  GOK membership in the World Bank’s Multilateral Investment Guarantee Agency (MIGA) provides an opportunity to insure FDI against non-commercial risk.  In November 2019, the Kenya Investment Authority (KenInvest), the country’s official investment promotion agency, launched the Kenya Investment Policy (KIP) and the County Investment Handbook (CIH) (http://www.invest.go.ke/publications/) which aim to increase inflow of FDI in the country.  The KIP intends to guide laws being drafted to promote and facilitate investments in Kenya.

KenInvest’s (http://www.invest.go.ke/) mandate is to promote and facilitate investment by helping investors understand and navigate local Kenya’s bureaucracy and regulations.  KenInvest helps investors obtain necessary licenses and developed eRegulations, an online database, to provide businesses with user-friendly access to Kenya’s investment-related regulations and procedures (https://eregulations.invest.go.ke/?l=en).

KenInvest prioritizes investment retention and maintains an ongoing dialogue with investors.  All proposed legislation must pass through a period of public consultation, which includes an opportunity for investors to offer feedback.  Private sector representatives can serve as board members on Kenya’s state-owned enterprises.  Since 2013, the Kenya Private Sector Alliance (KEPSA), the country’s primary alliance of private sector business associations, has had bi-annual round table meetings with President Kenyatta and his cabinet.  President Kenyatta also chairs a cabinet-level committee focused on improving the business environment.  The American Chamber of Commerce has also increasingly engaged the GOK on issues regarding Kenya’s business environment.

The government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.  To encourage foreign investment, in 2015, the GOK repealed regulations that imposed a 75 percent foreign ownership limit for firms listed on the Nairobi Securities Exchange, allowing such firms to be 100 percent foreign owned.  However, also in 2015, the government established regulations requiring Kenyan ownership of at least 15 percent of the share capital of derivative exchanges, through which derivatives, such as options and futures, can be traded.

Kenya’s National Information and Communications Technology (ICT) policy guidelines, published in August 2020, adjusted the requirement for Kenyan ownership in foreign ICT companies from 20 to 30 percent, and broadened its applicability within the telecommunications, postal, courier, and broadcasting industries.  Affected companies have 3 years to comply with the new requirement.  The Mining Act (2016) reserves mineral acquisition rights to companies registered and established in Kenya, whether local or foreign owned.  Mineral dealership licenses are only issued to Kenyan citizens or to corporations where at least 60 percent shareholding is held by Kenyan citizens.  The Private Security Regulations Act (2016) restricts foreign participation in the private security sector by requiring at least 25 percent Kenyan ownership of private security firms.  The National Construction Authority Act (2011) and the 2014 National Construction Authority regulations impose local content restrictions on “foreign contractors,” defined as companies incorporated outside Kenya or with more than 50 percent ownership by non-Kenyan citizens.  The definition excludes companies owned by foreigners but incorporated in Kenya.  The act requires foreign contractors enter subcontracts or joint ventures assuring that at least 30 percent of the contract work is done by local firms and locally unavailable skills transferred to a local person.  The Kenya Insurance Act (2010) limits foreign capital investment in insurance companies to two-thirds, with no single person holding more than a 25 percent ownership share.

In 2019, the World Trade Organization conducted a trade policy review for the East Africa Community (EAC), of which Kenya is a member (https://www.wto.org/english/tratop_e/tpr_e/tp484_e.htm).

In 2011, the GOK established KenTrade to address trading partners’ concerns regarding the complexity of trade regulations and procedures.  KenTrade’s mandate is to facilitate cross-border trade and to implement the National Electronic Single Window System.  In 2017, KenTrade launched InfoTrade Kenya (infotrade.gov.ke), which provides a host of investment products and services to prospective investors.  The site documents the process of exporting and importing by product, by steps, by paperwork, and by individuals, including contact information for officials responsible for relevant permits or approvals.

In February 2019, Kenya implemented a new Integrated Customs Management System (iCMS) that includes automated valuation benchmarking, release of green-channel cargo, importer validation and declaration, and linkage with iTax.  The iCMS enables customs officers to efficiently manage revenue and security related risks for imports, exports and goods on transit and transshipment.

The Movable Property Security Rights Bill (2017) enhanced the ability of individuals to secure financing through movable assets, including using intellectual property rights as collateral.  The Nairobi International Financial Centre (NIFC) Act (2017) seeks to provide a legal framework to facilitate and support the development of an efficient and competitive financial services sector in Kenya.  The act created the Nairobi International Financial Centre Authority to establish and maintain an efficient financial services sector to attract and retain FID.  The Kenya Trade Remedies Act (2017) provides the legal and institutional framework for Kenya’s application of trade remedies consistent with World Trade Organization (WTO) law, which requires a domestic institution to receive complaints and undertake investigations in line with WTO Agreements.  To date, however, Kenya has implemented only 7.5 percent of its commitments under the WTO Trade Facilitation Agreement, which it ratified in 2015.  In 2020, Kenya launched the Kenya Trade Remedies Agency to investigate and enforce anti-dumping, countervailing duty, and trade safeguards, to protect domestic industries from unfair trade practices.

The Companies (Amendment) Act (2017) clarified ambiguities in the original act and ensures compliance with global trends and best practices.  The act amended provisions on the extent of directors’ liabilities and disclosures and strengthens investor protections.  The amendment eliminated the requirements for small enterprises to hire secretaries, have lawyers register their firms, and to hold annual general meetings, reducing regulatory compliance and operational costs.

The Business Registration Services (BRS) Act (2015) established the Business Registration Service, a state corporation, to ensure effective administration of laws related to the incorporation, registration, operation, and management, of companies, partnerships, and firms.  The BRS also devolves certain business registration services to county governments, such as registration of business names and promoting local business ideas/legal entities- reducing registration costs.  The Companies Act (2015) covers the registration and management of both public and private corporations.

In 2014, the GOK established a Business Environment Delivery Unit to address investors’ concerns.  The unit focuses on reducing the bureaucratic steps required to establish and do business.  Its website (http://www.businesslicense.or.ke/) offers online business registration and provides detailed information regarding business licenses and permits, including requirements, fees, application forms, and contact details for the respective regulatory agencies.  In 2013, the GOK initiated the Access to Government Procurement Opportunities program, requiring all public procurement entities to set aside a minimum of 30 percent of their annual procurement spending facilitate the participation of youth, women, and persons with disabilities (https://agpo.go.ke/).

Kenya’s iGuide, an investment guide to Kenya (http://www.theiguides.org/public-docs/guides/kenya/about#, developed by UNCTAD and the International Chamber of Commerce, provides investors with up-to-date information on business costs, licensing requirements, opportunities, and conditions in developing countries.  Kenya is a member of UNCTAD’s international network of transparent investment procedures.

The GOK does not promote or incentivize outward investment.  Despite this, Kenya is evolving into an outward investor in tourism, manufacturing, retail, finance, education, and media. Kenya’s outward investment has primarily been in the EAC, due to the preferential access afforded to member countries, and in a select few central African countries.  The EAC allows free movement of capital among its six member states – Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.

*Host Country Statistical Source: Central Bank of Kenya, Foreign Investment Survey 2020  

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

Mauritius actively seeks foreign investment. According to several surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. Mauritius outperforms all other African countries on the Human Development Index where, in 2020, it ranked 66 out of 189 countries. The 2022 Index of Economic Freedom, published by the Heritage Foundation, ranked Mauritius first among 47 countries in the Sub-Saharan Africa region and 30th globally, compared to being 13th in 2021. This decline in the ranking is due to a drop in the country’s fiscal health score. The index also highlighted that while property rights and judicial effectiveness are strong, government integrity is relatively weak.

The Economic Development Board (EDB) is the single gateway government agency responsible for promoting investment in Mauritius and helping guide investors through the country’s legal and regulatory requirements. In terms of investor retention policy, the EDB provides aftercare services that consider future business environment requirements for survival and/or expansion. The EDB has a customer service unit that receives investor suggestions and complaints, and it organizes workshops and roundtable sessions to inform investors about changes in investment policies. In 2021, the EDB also set up a Business Support Facility that provides facilitation and advisory services to all businesses in Mauritius: https://business-support-portal.edbmauritius.org/business-support-facility/ .

A non-citizen can hold, purchase, or acquire real property under the Non-Citizens (Property Restriction) Act (NCPRA), subject to government approval. The NCPRA can be accessed on this link: https://dha.govmu.org/Pages/Services/PRA.aspx . A non-citizen is eligible for a residence permit upon purchasing residential property under the government-regulated Property Development Scheme (PDS), Integrated Resort Scheme (IRS), and Real Estate Scheme (RES) as long as the investment exceeds $375,000 or its equivalent in any freely convertible foreign currency.

No government approval is required in certain situations provided under the NCPRA, namely: (i) holding of immoveable property for commercial purposes under a lease agreement not exceeding 20 years; (ii) holding of shares in companies that do not own immoveable property; (iii) holding of immoveable property by inheritance or effect of marriage to a citizen under the “régime legal de communauté”; (iv) holding of shares in companies listed on the Stock Exchange of Mauritius; and (v) through a unit trust scheme or any collective investment vehicle as defined in the Securities Act.

Regarding business activities, the GoM generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper and magazine publishing, and certain operations in the tourism sector.

In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Control by foreign nationals in broadcasting was likewise capped at 49.9 percent. The IBA Act can be accessed via http://www.iba.mu/legal.htm .

In the sugar sector, no foreign investor is allowed to make an investment that would result in 15 percent or more of the voting capital of a Mauritian sugar company being held by foreign investors. However, foreign investors may be exempt from this rule subject to authorization by the Financial Services Commission. Further details can be accessed on the following link: https://www.stockexchangeofmauritius.com/media/2124/securities-investment-by-foreign-investors-rules-2013.pdf .

In the tourism sector, there are conditions on investment by non-citizens in the following activities: (i) guesthouse/tourist accommodation; (ii) pleasure craft; (iii) diving; and (iv) tour operators. Generally, the conditions include a minimum investment amount, number of rooms, or a maximum equity participation, depending on the business activity.

In the construction sector, foreign consultants or contractors are required to register with the Construction Industry Development Board (CIDB). Details on registration procedures are available at http://cidb.govmu.org/English/Consultants-Contractors/Pages/default.aspx .

The Investment Office of the EDB screens foreign investment proposals and provides a range of services to potential investors. The EDB is a useful resource for investors exploring business opportunities in Mauritius and assists with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2021, the U.S. Embassy in Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms.

The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. The EDB then advises potential investors on specific permits or licenses required, depending on the nature of the business. Foreign investors may apply through the EDB for necessary permits; alternately, investors may apply directly to the relevant authorities. In the event an investment fails the review process, the prospective investor may appeal the decision within the EDB or with the relevant government ministry.

In response to the COVID-19 crisis, the GoM relaxed investment terms and conditions for foreign investors in 2020. For instance, the minimum investment for obtaining an occupation permit was halved to $50,000. The GoM also removed the minimum turnover and minimum amount invested for the Innovator Occupation Permit. Professionals with an occupation permit and foreign retirees with a residence permit were able to invest in other ventures without any shareholding restrictions. The permanent residence permit validity was doubled to 20 years. Non-citizens who had a residence permit under the various real estate schemes were no longer required to hold an occupation or work permit to invest and work in Mauritius. Additionally, the GoM introduced a 10-year Family Occupation Permit, which allows foreign families to invest and reside in Mauritius for a period of 10 years in exchange for a minimum contribution of $250,000 to the COVID-19 Projects Development Fund. More information is available at https://residency.mu/ .

In 2020, the Non-Citizens (Employment Restriction) Act was amended to enable the following categories of individuals to engage in any occupation without a permit: (a) the holder of an occupation permit issued under the Immigration Act; (b) the holder of a residence permit issued under the Immigration Act; (c) a non-citizen who has been granted a permanent resident permit under the Immigration Act; and (d) a member of the Mauritian diaspora under the Mauritian Diaspora Scheme. In 2021, the GoM also introduced the premium investor certificate, which allows companies investing at least $11 million, as well as companies involved in the manufacture of pharmaceuticals and medical devices, to benefit from incentives.

In 2018, the United Nations Conference on Trade and Development (UNCTAD) published its 2017 Report on the Implementation of the Investment Policy Review (IPR) for Mauritius.

UNCTAD worked with the GoM on the Industrial Policy and Strategic Plan, launched in December 2020, found here: https://unctad.org/system/files/official-document/gdsinf2020d5_en.pdf .

In November 2021, Mauritius concluded its fifth trade policy review with the World Trade Organization. The review concluded that Mauritius’ openness to trade and its stable and robust democratic system have contributed to its economic success in recent years. The review also highlighted that, after two decades of liberalizing reforms, Mauritius has transformed into an almost duty-free economy, with the notable exception of sugar, on which Most Favored Nation tariff rates reach 100 percent. The trade policy review is available at https://www.wto.org/english/tratop_e/tpr_e/s417_e.pdf .

After the GoM put in place new measures to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime, in October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning AML/CFT. In January 2022, the European Union Commission likewise removed Mauritius from its list of high-risk third countries.

The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures.

The incorporation of companies and registration of business activities falls under the provisions of the Companies Act of 2001 and the Business Registration Act of 2002. All businesses must register with the Corporate and Business Registration Department (CBRD); the registration can be completed online at https://companies.govmu.org/Pages/default.aspx . In 2020, the Business Registration Act was amended so that the CBRD became the central repository of business licenses and information. According to the amendment, all government agencies must electronically forward a copy of any permit, license, authorization, or clearance to the registrar for publication in the Companies and Businesses Registration Integrated System (“CBRIS”). As a general rule, a company incorporated in Mauritius can be 100 percent foreign owned with no minimum capital.

Upon completion of the registration process, the CBRD issues a certificate of incorporation. The company can subsequently apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign. To this end, a Business Support Facility was established at the EDB in 2021. For more information, see https://business-support-portal.edbmauritius.org/ .

In partnership with the Corporate and Business Registration Department, the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System, a web-based portal that allows electronic submission for incorporation of companies and application for the Business Registration Number, file statutory returns, pay yearly fees, register businesses, and search for business information.

In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS is a single point of entry for the processing of permits and licenses needed to start and operate a business. Through NELS, the submission of business licensing (including the Building and Land Use Permit, Environmental Impact Assessment, Occupation Certificate, Land Conversion Certificate, etc.) can now be done electronically.

In 2020, the Economic Development Board Act was amended to allow companies to log any obstacles relating to obtaining licenses, permits, authorizations, or other clearances; to enquire about any issue and make recommendations to government agencies; and to publish any actions taken to resolve the reported obstacles.

Mauritius also implemented the e-Registry System, where a national register of real estate properties and statistics on land dispute resolutions are now publicly available. An independent mechanism for filing of complaints was also implemented. The e-Registry System features an electronic dashboard for registry searches, submission of documents, online payment of registration fees, and electronic copies of registered documents.

The GoM imposes no restrictions on capital outflows.  Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses.  As part of its Africa Strategy, the government established the Mauritius Africa Fund, a public company with a budget of $13.8 million to support Mauritian investment in Africa.  Through the Fund, the government participates as an equity partner for up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa.  The government has signed agreements with Senegal, Madagascar, and Ghana to establish and manage Special Economic Zones (SEZ) in these countries. The GoM and has invited local and international firms to set up operations in the SEZs.  As per the 2018 Finance Act, Mauritian companies collaborating with the Mauritius Africa Fund for development of infrastructure in the SEZs benefit from a five-year tax holiday.  To further facilitate investment, Mauritius has also signed Investment Promotion and Protection Agreements and Double Taxation Avoidance Agreements with African states.

Additionally, since 2012, the Board of Investment (now restructured as the Investment Office of the EDB) has been operating an Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa.  This office also acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa.

According to the most recent figures available from the Bank of Mauritius, in 2020, gross direct investment flows abroad (excluding the offshore sector) amounted to $68 million.  The top three sectors for outward investment were accommodation and food service activities (32 percent), manufacturing (12 percent), and real estate activities (9 percent).  Investment abroad was focused mainly on developing countries, particularly in Africa, which received $31 million.  Seychelles was the top recipient country, receiving $22 million.

The Nigerian Investment Promotion Commission (NIPC) Act of 1995, amended in 2004, dismantled controls and limits on FDI, allowing for 100% foreign ownership in all sectors, except those prohibited by law for both local and foreign entities.  These include arms and ammunitions, narcotics, and military apparel.  In practice, however, some regulators include a domestic equity requirement before granting foreign firms an operational license.  Nevertheless, foreign investors receive largely the same treatment as domestic investors in Nigeria, including tax incentives.  The Act also created the NIPC with a mandate to encourage and assist investment in Nigeria.  The NIPC features a One-Stop Investment Center (OSIC) that includes participation by 27 governmental and parastatal agencies to consolidate and streamline administrative procedures for new businesses and investments.  The NIPC is empowered to negotiate special incentives for substantial and/or strategic investments.  The Act also provides guarantees against nationalization and expropriation.  The NIPC occasionally convenes meetings between investors and relevant government agencies with the objective of resolving specific investor complaints.  The NIPC’s role and effectiveness is limited to that of convenor and moderator in these sessions as it has no authority over other government agencies to enforce compliance. The NIPC’s ability to attract new investment is thus limited due to its inability to resolve certain such investment challenges. 

The Nigerian government continues to promote import substitution policies such as trade restrictions, foreign exchange restrictions, and local content requirements in a bid to funnel investment toward domestic production capacity and to reduce Nigeria’s reliance on foreign imports.  The import bans and high tariffs used to advance Nigeria’s import substitution goals have been undermined by smuggling of targeted products through the country’s porous borders, and by corruption in the import quota systems developed by the government to incentivize domestic investment.  The government opened land borders in December 2020, which were progressively closed to commercial trade starting in August 2019 with the aim of curbing smuggling and bolstering domestic production.

Investment by foreign and domestic private entities is prohibited in industries contained in the “negative list.”  These include production of arms and ammunition, narcotic drugs and psychotropic substances, and military and paramilitary wear and accoutrements.  The Federal Executive Council maintains the right to amend the list as it deems fit.  There are currently no limits on foreign control of investments; however, some Nigerian regulatory bodies have insisted on domestic equity as a prerequisite to doing business.  The NIPC Act of 1995, amended in 2004, liberalized the ownership structure of business in Nigeria, allowing foreign investors to own and control 100% of the shares in any company.  One hundred percent ownership of firms is allowed in the oil and gas sector while ownership of mineral resources is vested in the federal government.  However, the dominant models for oil extraction are joint venture and production sharing agreements between oil companies (both foreign and local) and the federal government.  Foreign investors must register with the NIPC after incorporation under the Companies and Allied Matters Act reviewed in 2020.  A foreign company intending to operate in Nigeria must incorporate a company or subsidiary.  It may apply for an exemption to this requirement if it meets certain conditions including working on a specialized project specifically for the government, or on a project funded by a multilateral or bilateral donor or a foreign state-owned enterprise.  However, a foreign entity can invest in a Nigerian company without incorporation.  Importers of foreign technology must obtain a certificate from the National Office of Technology Acquisition and Promotion (NOTAP).  One of the prerequisites for obtaining the certificate is the provision of a Technology Transfer Agreement duly approved by NOTAP.  The NIPC Act prohibits the nationalization or expropriation of foreign enterprises except in cases of national interest and stipulates modalities for “fair and adequate” compensation should that occur.  

The World Bank published an Investment Policy and Regulatory Review of Nigeria in 2019.  It provides an overview of Nigeria’s legal and regulatory framework as it affects FDI, foreign investors, and businesses at large and is available at https://documents.worldbank.org/en/publication/documents-reports/documentdetail/305141586325201141/nigeria-2019-investment-policy-and-regulatory-review.  The WTO published a trade policy review of Nigeria in 2017, which also includes a brief overview and assessment of Nigeria’s investment climate.  That review is available at https://www.wto.org/english/tratop_e/tpr_e/tp456_e.htm. 

The government established the Presidential Enabling Business Environment Council (PEBEC) in 2016 with the objective of removing constraints to starting and running a business in Nigeria.  PEBEC’s implementation was supported by Presidential Executive Orders aimed at improving business transparency and efficiency.  PEBEC’s focus areas include:  starting a business, cross-border and domestic movement of people and goods, obtaining credit and resolving insolvency, enforcing contracts, registering property, acquiring construction permits and electricity, and paying taxes.  PEBEC’s significant achievements were in the areas of starting a business, acquiring construction permits and electricity, registering property, and enforcing contracts.  Despite these improvements, Nigeria remains a difficult place to do business, with companies suffering from regulatory uncertainty, policy inconsistency, poor infrastructure, foreign exchange shortages and customs inconsistency and inefficiency.  These many challenges are reflected in the fact that Nigeria’s leading trade indices lag behind regional averages.   

The One-Stop Investment Center (OSIC), housed within the NIPC, co-locates 27 relevant government agencies including the Central Bank of Nigeria (CBN), the Corporate Affairs Commission (CAC), and the Immigration Service to provide fast-tracked, efficient, and transparent services to investors.  The OSIC assists with visas for investors, company incorporation, business permits and registration, tax registration, immigration, and customs issues.  Investors may pick up documents and approvals that are statutorily required to establish an investment project in Nigeria.  In 2021, NIPC launched the electronic OSIC which allows investors to register businesses, submit documents, and pay fees remotely on its Single Window Investors’ Portal (SWIP). 

All businesses, both foreign and local, are required to register with CAC before commencing operations.  CAC began online registration as part of PEBEC reforms.  Online registration is straightforward and consists of three major steps:  name search, reservation of business name, and registration.  A registration guideline is available on the website as is a post-registration portal for enacting changes to company details.  The CAC online registration website is https://pre.cac.gov.ng/home.  The registration requires the signature of a Legal Practitioner and attestation by a Notary Public or Commissioner for Oaths.  Business registration can be completed online but the certificate of incorporation is usually collected at a CAC office upon presentation of the original application and supporting documents.  Online registration can be completed in as little as three days if there are no issues with the application.  On average, a limited liability company (LLC) in Nigeria can be established in seven days.  This average is significantly faster than the 22-day average for Sub-Saharan Africa.  It is also faster than the OECD average of nine days.  Timing may vary in different parts of the country. 

Companies must register with the Federal Inland Revenue Service (FIRS) for tax payments purposes.  If the company operates in a state other than the Federal Capital Territory, it must also register with the relevant state tax authority.  CAC issues a Tax Identification Number (TIN) to all businesses on completion of registration which must be validated on the FIRS website https://apps.firs.gov.ng/tinverification/ and subsequently used to register to pay taxes.  The FIRS then assigns a tax office with which the business will engage for tax payments purposes.  Some taxes may also be filed and paid online on the FIRS website.  

Foreign companies are also required to register with NIPC which maintains a database of all foreign companies operating in Nigeria.  Investors can register online through NIPC’s SWIP platform:  https://swip.nipc.gov.ng/auth.php?a=r.  

Companies which import capital must do so through an authorized dealer, typically a bank, after which they are issued a Certificate of Capital Importation.  This certificate entitles the foreign investor to open a bank account in foreign currency and provides access to foreign exchange for repatriation, imports, and other purposes.  

A company engaging in international trade must get an import-export license from the Nigerian Customs Service (NCS).  Businesses may also be required to register with and/or obtain licenses from other regulatory agencies which supervise the sector within which they operate. 

Nigeria does not promote outward direct investments.  Instead, it focuses on promoting exports especially as a means of reducing its reliance on oil exports and diversifying the sources of its foreign exchange earnings.  The Nigerian Export Promotion Council (NEPC) administered a revised Export Expansion Grant (EEG) in 2018 when the federal government set aside 5.1 billion naira ($13 million) in the 2019 budget for the EEG scheme.  The Nigerian Export-Import (NEXIM) Bank provides commercial bank guarantees and direct lending to facilitate export sector growth, although these services are underused.  NEXIM’s Foreign Input Facility provides normal commercial terms of three to five years (or longer) for the importation of machinery and raw materials used for generating exports.  

Agencies created to promote industrial exports remain burdened by uneven management, vaguely defined policy guidelines, and corruption.  Nigeria’s inadequate power supply and lack of infrastructure, coupled with the associated high production costs, leave Nigerian exporters at a significant disadvantage.  Many Nigerian businesses fail to export because they find meeting international packaging and safety standards is too difficult or expensive.  Similarly, firms often are unable to meet consumer demand for a consistent supply of high-quality goods in sufficient quantities to support exports and meet demand.  Most Nigerian manufacturers remain unable to or uninterested in competing in the international market, given the size of Nigeria’s domestic market.

Domestic firms are not restricted from investing abroad.  However, the Central Bank of Nigeria (CBN mandates that export earnings be repatriated to Nigeria, and controls access to the foreign exchange required for such investments.  Noncompliance with the directive carries sanctions including expulsion from accessing financial services and the foreign exchange market.

Nigeria’s Securities and Exchange Commission (SEC) in April 2020 prohibited investment and trading platforms from facilitating Nigerians’ purchase of foreign securities listed on other stock exchanges.  SEC cites Nigeria’s Investment and Securities Act of 2007, which mandates that only foreign securities listed on a Nigerian exchange should be sold to the Nigerian investing public.

* Source for Host Country Data: Nigerian Bureau of Statistics

Table 4: Sources of Portfolio Investment
Data not available.