2.1 Legislation on trade and investment

The main law governing investment is the Nigerian Investment Promotion Commission (NIPC) Decree No.16 of 1995, under which NIPC was established and its functions and procedures are defined.

Other laws governing investment include the Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree No.17 of 1995, the Investments and Securities Decree No. 45 of 1999, and etc..

2.2 Trade administration

2.2.1 Tariff system

At present, Nigeria maintains an average tariff rate of 28.6 percent. The average tariff rate for agricultural products is 50 percent, and for non-agricultural products 25 percent. In September 2005, at the meeting chaired by Nigeria President Obasanjo, the Nigerian Federal Executive Council approved a new tariff system. The new tariff system took effect as of October 1, 2005, and will expire at the end of 2007. 

As stipulated by the new tariff system, pharmaceutical products, industrial machinery and equipment under Tariff Heading Chapters 84-89 are granted a one-year import duty free treatment, while raw materials, other means of production and spare parts are levied a 5 percent import duty rate, intermediate products (semi- finished) products 10 percent, finished products 20 percent, and rice 100 percent. The import duty rate for cigarettes is lowered from the original 150 percent to the current 100 percent. Chemical fertilizer imports are exempt from duties and value-added tax (VAT). Vegetable oil import is banned, but olive oil is an exception. 

Import duties are collected by the Nigerian Customs Service in association with government-appointed accounting and auditing firms and paid to the Federal Treasury through the selected banks. Tariff rate for special goods is determined by the Federal Ministry of Finance.

2.2.2 Import and export administration

The General Import Licensing Procedure has been abolished since 1986, following the introduction of the Structural Adjustment Program. However, narcotic drugs, psychotropic substances and some pharmaceuticals harmful to health and security remain subject to import licensing.

According to the Import Guidelines of Nigeria taking effect as of April 1, 1996, all goods exported to Nigeria must obtain Clean Results Finding (CRF) and Import Duties Report (IDR). Exporters are not allowed to deal in trade unless registered with the Nigerian Export Promotion Commission (NEPC).

2.3 Investment administration

A non-Nigerian may invest and participate in the operation of any enterprise in Nigeria. An enterprise in which foreign participation is permitted shall, after its incorporation or registration, be registered with the Nigerian Investment Promotion Commission (NIPC). A foreign enterprise may buy the shares of any Nigerian enterprise in any convertible foreign currency. Investment returns can be repatriated free of control.

In order to promote investment in strategic or important projects, NIPC has the right to, after consultation with relevant government agencies, formulate special incentives for investment. According to the Nigerian Investment Promotion Commission Decree No. 16 of 1995, the Federal Government can't acquire businesses unless out of national interests or for public needs. In case of acquisition, compensation shall be paid in time according to laws.

In Nigeria, investment is banned in the following areas: arm, ammunition, narcotic drugs, and psychotropic substances.

2.4 Competent authorities

The Ministry of Commerce is Nigeria's trade authority, responsible for the administration of foreign trade, domestic trade and regional trade, the making of trade policies, and the administration of trademarks, patents, anti-dumping and other matters.

The Nigerian Investment Promotion Commission (NIPC), an agency of the Federal Government, is the investment authority in Nigeria, responsible for the making of laws and regulations to attract foreign investment, assisting foreign companies in communication with government agencies, and processing relevant formalities such as registration.