The Nigerian government has announced several incentives, including a five-year corporate tax holiday, to attract investments from Indian investors in all sectors including pharmaceuticals.
Nigeria Investment Promotion Commission (NIPC)'s executive secretary & chief executive officer Engr Mustafa Bello said that the Nigerian government offers a 100 percent guarantee to all the investments in the country. “Nigeria also offers a five-year corporate tax holiday and the country also has a very low VAT regime as compared to other countries. Apart from incentives such as capital allowance, the government also provides subsidies for investors on infrastructure and industries, which utilizes local raw material,” he said.
Nigeria is the second largest trade and investment destination in Africa for Indian companies with a trade exchange of more than US$ 10 billion. However, with the Nigerian government offering incentives for investors, the quantum of trade would increase, Bello told the captains of the Indian industry at the CII – NIPC 3rd Nigeria- India Business & Investment Forum (NIBIF 2010) held in New Delhi recently.
The Nigeria Free Zones Authority (NFZA)'s managing director & chief executive officer Sina Agboluaje stated that all investments made in the Zone are exempted from federal, State and local taxes. “Nigeria has a bureaucracy free environment and we have a single stop centre which addresses all the needs of the investors,” he said.
Speaking about the opportunities for the pharmaceutical sector in Nigeria, Alok Saxena, director, Elder Pharmaceuticals said that the country offers cost effective and commercially viable opportunities in the sector. “The pharma sector in Nigeria is to the tune of $1 billion, this is stated to grow to $2 billion in the best two to three years. Around $170 million worth of Indian Formulation is exported every year,” he said.
Speaking further about the growth potentials of Nigeria, Bello said, “Our GDP growth rate in the year 1999 was just 5.3 per cent, this touched 10.6 per cent in the year 2004 thanks to the aggressive growth policies and this has stabilized to nearly 6.7 to 6.8 per cent now.”
He also pointed out that return on investment in Nigeria is higher as compared to other African countries and ranges between 35 to 45 per cent. “Nigeria is also the largest recipient of Foreign Direct Investment (FDI) inflows in Africa and ranks 19th as the recipient of global FDI inflows,” Bello said.
The representative of High commissioner of Nigeria in India, Ibrahim Usman Gafal, informed that trade links between the two countries could be traced to the pre-Independence days right back to the year 1923. He also explained that both the countries are making conscious efforts to strengthen their ties. “We are working on initiatives like the signing of a bilateral trade agreement which would improve the ties further and address the issues of double taxation,” he said.