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Nigeria: Market Profile

Picture: Nigeria factsheet
Picture: Nigeria factsheet

1. Overview

Nigeria is a key regional market, accounting for almost half of West Africa’s population, and the country boasts one of the largest youth populations in the world. With an abundance of resources, it is Africa’s biggest oil exporter, with vast gas reserves. Nevertheless, oil prices continue to dictate the country’s growth pattern due to high reliance on the hydrocarbons sector for exports. Moreover, as the government begins to implement the structural reforms outlined in its Economic Recovery and Growth Plan 2017–2020, growth can be expected to strengthen gradually in the medium term. Nigeria has made significant progress in socio-economic terms over the last 15 years; however, the country continues to face massive developmental challenges, which include diversifying the economy, addressing insufficient infrastructure, and building strong and effective institutions, as well as governance issues, public financial management systems, human development indicators, and the living conditions of the population.

Source: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

March 2015
Muhammadu Buhari won the presidential election, becoming the first opposition candidate to do so in Nigeria's history.

June 2016
Nigeria’s currency, the naira, was partially floated in attempt to stave off the effects of low oil prices.

February 2019
General elections due to be held for the President and the National Assembly. They will be the sixth quadrennial elections since the end of military rule in 1999.

Source: BBC Country Profile – Timeline, Fitch Solutions Political Risk Analysis

3. Major Economic Indicators

Graph: Nigeria real GDP and inflation
Graph: Nigeria real GDP and inflation
Graph: Nigeria GDP by sector (2017)
Graph: Nigeria GDP by sector (2017)
Graph: Nigeria unemployment rate
Graph: Nigeria unemployment rate
Graph: Nigeria current account balance
Graph: Nigeria current account balance

f = forecast
Source: IMF, World Bank, Fitch Solutions
Date last reviewed: August 28, 2018

4. External Trade

4.1 Merchandise Trade

Graph: Nigeria merchandise trade
Graph: Nigeria merchandise trade

e = estimate
Source: WTO
Date last reviewed: August 28, 2018

Graph: Nigeria major export commodities (2017)
Graph: Nigeria major export commodities (2017)
Graph: Nigeria major export markets (2017)
Graph: Nigeria major export markets (2017)
Graph: Nigeria major import commodities (2017)
Graph: Nigeria major import commodities (2017)
Graph: Nigeria major import markets (2017)
Graph: Nigeria major import markets (2017)

Source: Trade Map, Fitch Solutions
Date last reviewed: August 24, 2018

4.2 Trade in Services

Graph: Nigeria trade in services
Graph: Nigeria trade in services

Source: WTO
Date last reviewed: August 28, 2018

5. Trade Policies

  • Measures has been a WTO member since January 1, 1995 and a member of GATT since November 18, 1960. Nigeria ratified the WTO Trade Facilitation Agreement (TFA) in 2016, entering into force in February 2017. Nigeria adopts the Harmonised System (HS) of Customs Tariff and all duties are levied on an ad valorem basis, with rates for most product lines ranging from 0% to 35%.

  • The Nigeria Customs Service imposes import duty rates on imported new and used vehicles, as well as new imported tyres. A fully built car is subject to combined duties and levies of 70% of the value (previously 22%). This is being implemented in line with the country's new policy to strengthen the local autos industry. Fully-built commercial vehicles see a tariff increase from 10% to 35%. Imports of tyres will be subject to a 20% import duty. Conversely, local automotive plants can import completely knocked down vehicles for assembly free of duties, as well as semi-knocked down vehicles at 5%. The prevailing US dollar shortage will constrain manufacturers' ability to pay for and clear shipments of imported kits and components required in the manufacturing process.

  • In 2018, Nigeria officially abstained from signing the framework agreement for establishing the Africa Continental Free Trade Area (AfCFTA) following protests by major labour unions that the deal would harm the local economy.

  • In 2015, Nigeria restricted importers of 41 broad categories of traded goods from accessing the Nigerian foreign exchange market. The country's import substitution policies, in effect, ban the import of some 700 individual items and severely hamper firms' ability to source inputs and raw materials. Nigeria has bans in place on imports of packaged sugar. This is done as part of the Nigerian Sugar Master Plan, which aims to achieve self-sufficiency in sugar consumption by 2020. Currently, about 98% of all sugar consumed in Nigeria is imported. Imports of raw sugar, by contrast, are subject to presidential approval on a recommendation from the trade and investment minister. In order to encourage local production of cement, the Nigerian government has approved a series of measures, including the reinstatement of a ban on the importation of bagged cement, and restrictions on the issuance of cement import licenses. A levy of NGN500 per tonne applies for all cement imports, while various incentives are available to assist in the development of local capacity through the establishment of a cement training institute in Nigeria. In October 2013, the Government of Nigeria announced a gradual ban on fish imports over four years, accompanied by a sharp increase in import duties in the interim period.

  • Capital controls continue to hinder companies from access to critical inputs that are not manufactured or sourced domestically. According to the Central Bank of Nigeria, the measure is intended to stabilise national foreign exchange reserves, as well as support local manufacturing and job creation.

  • Measures aimed at supporting local industry (including caps and special duties) have been levied on several import categories, including required inputs of the agricultural and manufacturing sectors. The Nigeria Customs Services increased duties in line with the Central Bank of Nigeria (CBN)'s foreign exchange rate policy. This has had the adverse effect of exacerbating smuggling activities and supply shortages as local output fails to fill the gap, thereby spurring inflation - which remains in double-digit territory over 2017-2018.

  • Due to the import substitution drive, certain sectors - Nigerian cocoa processors in particular - face a lack of competitiveness due to the government's unwillingness to sign up to a free-trade agreement with the EU. Ghana, Cote d'Ivoire and Cameroon, Nigeria's West African cocoa export rivals, have each agreed Economic Partnership Agreements and are not subject to the levies that Nigerian shipments face on arrival at European ports. The resulting higher costs of Nigerian cocoa products have left firms running at a quarter of capacity since 2011. The government opposes the trade deal because it believes opening the local market to manufactured goods from the EU will destroy its fledgling domestic manufacturing sector. The latest round of talks failed to produce an agreement.

  • Nigeria is a member of Economic Community of West African States (ECOWAS), a customs union of 15 member states including Benin, Burkina Faso, Cape Verde, Cote d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone and Togo. ECOWAS adopts a five-band tariff regime, with the first four bands ranging from 0% to 20%, and the fifth subjecting some sensitive items to a 35% tariff.

  • Nigeria has also entered into effective bilateral trade agreements with China, Finland, France, Germany, Italy, South Korea, the Netherlands, Romania, Serbia, South Africa, Spain, Sweden, Switzerland, Taiwan and the UK. In spite of Nigeria’s active pursuit of bilateral trade agreements, it adopts a rather protectionist trade policy.

  • The Nigerian Export Promotion Council administered an Export Expansion Grant (EEG) scheme to improve non-oil export performance until 2014, when the government ended the program due to concerns about corruption on the part of companies who collected the grants, but did not actually export. The federal government’s Economic Recovery and Growth Plan 2017-2020, released in February 2017, proposed reviving the EEG in the form of tax credits for companies. The Nigerian Export-Import Bank (NEXIM) 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.

Source: WTO – Trade Policy Review, ECOWAS

6. Trade Agreement

6.1 Trade Updates

In May 2018, Nigeria and China announced that they will conduct a currency swap amounting to nearly USD$2.4 billion, making trade between the two countries smoother and less reliant on the US dollar in the future. The currency swap is valid for three years and can be renewed following the approval of both countries.

In 2018, the Nigerian government refused to sign the African Continental Free Trade Area - which aims to bring together the African Union's 55 member states into a common market - and the Economic Partnership Agreement between West African countries and the European Union.

6.2 Multinational Trade Agreements


As a member of the ECOWAS, Nigeria is a signatory to the ECOWAS Trade Liberalisation Scheme (ETLS). Having evolved considerably over the years, this scheme ultimately aims to liberalise trade in the region by abolishing customs duties levied on imports and exports, removing non-tariff barriers between member states and strengthening trade competitiveness with key global partners. The 15-country regional grouping comprises Benin, Burkina Faso, Cape Verde, Cote d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone and Togo.

Under Negotiation

EU-ECOWAS Economic Partnership Agreement (EPA): The EPA between the EU and ECOWAS creates free trade zones between member states of the two blocs, allowing the entry of some imports from Europe into West Africa and vice versa, free of tariffs. The signing of the interim EPA with the EU by Ghana and Cote d'Ivoire may have put a strain on the ETLS as Nigeria's President Buhari refused to sign the West Africa-EU free trade deal. Tariffs on non-oil exports from Nigeria to the EU are to remain in place until the country signs the EPA, which it has been reluctant to enter into due to fears that it will open up the market to EU imports, and thereby slow domestic manufacturing growth.

Source: WTO – Trade Policy Review, ECOWAS

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Nigeria FDI stock
Graph: Nigeria FDI stock
Graph: Nigeria FDI flow
Graph: Nigeria FDI flow

Source: UNCTAD
Date last reviewed: August 28, 2018

7.2 Foreign Direct Investment Policy

  1. Nigeria has, historically, been a major destination for FDI due to its oil and gas resources, and there are a number of incentives in place for foreign investors. However, Nigerian nationals are given preference in government procurement and there are tightening localisation requirements in certain investment areas, such as the agriculture sector and oil and gas businesses, which limit foreign ownership. Foreign ownership is permitted with the exception of some sectors designated as strategic in defence-related industries and some farmland. The Nigerian Oil & Gas Industry Content Development Act 2010 seeks to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the employment of Nigerian staff in the industry. The Local Content Act derives from the Nigerian Content Policy, which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards. This requires companies formed in the sector to have 51% Nigerian ownership. Nigerian independent operators are given priority in the award of oil blocks, oil fields and oil lifting licenses, as well as in all projects for which contracts are to be awarded in the Nigerian petroleum industry subject to the fulfilment of conditions specified by the Minister of Petroleum Resources.

  2. The Nigerian Investment Promotion Commission was created in 1995 to promote and assist FDI. Tapping resources other than oil is part of the government's economic recovery and growth plan after the worst economic slump in 25 years as oil output and prices fell. Nigeria’s potential advantages for future growth include a large consumer market, a strategic geographic location as a hub for Africa, and a young and entrepreneurial population. The first step in harnessing this opportunity requires deliberate efforts to improve value-adding activity in the non-oil economy, particularly in agriculture and the services sectors.

  3. To further encourage investors, incentives including tax holidays of as much as five years for new companies entering the market, duty-free imports on mining equipment, and mining licenses for 25 years have been put in place. According to Vice President Yemi Osinbajo, from January-August 2017, 41 planned investment projects with an estimated value of USD$20 billion were recorded in 22 of its 36 states. According to the country’s investment body, up to 120% of expenses on R&D are tax deductible, provided that such R&D activities are carried out in Nigeria and are connected with the business from which income or profits are derived. Also, for the purpose of R&D on local raw materials, 140% of expenses are allowed. For cases in which the research is long-term, it will be regarded as a capital expenditure and will be written off against profit.

  4. Provisions in the 2018 national budget, published in early November 2017, also set out proposals that allow for the sale of state equity in joint-venture (JV) oil assets, a move officials say will raise NGN710 billion. The reform is aimed at increasing private sector equity participation to improve efficiencies in the sector, and also provides revenue to the government, which will be deployed solely and exclusively for creating new assets in Nigeria. The proposals signal a significant change in the way the state participates in production and ownership structures in its upstream oil sector.

  5. Foreign firms will benefit from the government's efforts to improve transparency and predictability for foreign investors. For example, in May 2014, Nigeria signed a Foreign Investment Promotion and Protection Agreement (FIPA) with Canada, which is expected to enhance protection for investors by creating a framework of legally binding rights and obligations. Moreover, Nigeria has signed bilateral investment agreements with over a dozen countries, notably China, Italy, Algeria and Egypt, as well as BITs with the UK, Spain, the Republic of Korea, Germany, Finland and Turkey, enabling investors from the latter countries to enjoy similar benefits as enjoyed by Nigerian investors. As a result, in theory, Nigerian investors are not provided preferential treatment in their investments over expatriates from BIT countries, and any infringement on the Nigerian side could then be referred to international arbitration.

  6. Other similar government initiatives include the establishment of raw materials-based small- and medium-scale industries clusters to promote sustainable development and the growth of local companies. Nine sites across the country have been selected as pilot clusters for deploying fish, plantain, oil palm, okra, cassava and grain processing technologies. This process could not only lessen the country's dependence on oil exports, but could stimulate the growth of new industries offering diverse investment opportunities. Nigeria has seen some success in facilitating cluster development, and there are 15 operational (34 planned) free trade zones (FTZs) in Nigeria with different areas of specialisation, including manufacturing, logistics services, warehousing, steel fabrication, food processing and manufacturing, oil and gas services, and trade, tourism and resort services.

  7. Foreign investors must register with the Nigerian Investment Promotion Commission (NIPC), incorporate as a limited liability company (private or public) with the Corporate Affairs Commission (CAC), procure appropriate business permits, and register with the Securities and Exchange Commission (when applicable) to conduct business in Nigeria. Manufacturing companies sometimes must meet local content requirements. Expatriate personnel do not require work permits, but they remain subject to quotas, requiring them to obtain residence permits that allow salary remittances abroad.

  8. The NIPC Decree of 1995 permits 100% foreign ownership of companies outside the oil and gas industry. Within oil and gas, foreign firms are obliged to participate in joint ventures or production-sharing agreements. Additionally, investments in industries related to national security are restricted to domestic investors, including ammunition, firearms and military and paramilitary apparel.

  9. The Guidelines for Nigerian Content Development in the ICT sector issued by NITDA on December 3, 2013, require ICT companies to host all consumer and subscriber data locally and for government ministries, departments and agencies to source and procure software from only local and indigenous software development companies. Enforcement of the guidelines is variable as the state lacks capacity and resources to monitor digital data flows. Federal government data is hosted locally in data centres. The National Office of Technology Acquisition and Promotion (NOTAP) has the main objective of regulating the international acquisition of technology while creating an environment conducive to local technology. To this end, NOTAP recommends local technical partners to Nigerian users in a bid to reduce the level of imported technology, which currently accounts for over 90% of technology in use in Nigeria. One of NOTAP's major activities is the review of Technology Transfer Agreements (TTAs), a requirement for importing technology into Nigeria and for companies operating in Nigeria to access foreign currency. NOTAP reviews the legal economic and technical aspects prior to approval of TTAs and subsequent issuance of a certificate. One of the main risks concerning the TTA is the length of the approval process which can take up to three months. NOTAP states that it plans to have an automated system in place to streamline the TTA process thereby reducing the approval process to one month or less.

  10. Though foreign companies may bid on government projects and do generally receive national treatment in government procurement, they may also be subject to a local content vehicle (eg, partnership with a local partner firm or the inclusion of one in a consortium) or other prerequisites which are likely to vary from tender to tender. Procurements above NGN100 million reportedly undergo full 'due process'. Nigerian companies receive a preferential margin in the bidding process. Nigeria is not a signatory to the WTO Agreement on Government Procurement. Corruption and lack of transparency in tender processes are key concerns for investors.

  11. In 2017, Nigeria decided to retain its multiple FX rate regime, despite calls by investors to adopt a single exchange rate, predominantly driven by market forces, such as the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) mechanism. The web of different rates for different purposes continues to distort the market, keeping the naira artificially strong for groups such as: pilgrims seeking hard currency to travel to Mecca, small- and medium-sized enterprises, fuel importers, or Nigerians who need to pay overseas school fees. The central bank's limited ability to provide foreign exchange and the imposition of blanket import and FX restrictions prevent many companies from repatriating naira-denominated earnings in a timely manner. Foreign exchange demand remains high because of the dependence on foreign inputs for manufacturing and refined petroleum products. Companies are advised to acquire foreign currency denominated bank accounts.

  12. Companies engaged in the marketing and distribution of gas for domestic and industrial use (downstream operations) are subject to the Companies Income Tax Act. Beginning on the date on which they begin production, companies engaged in downstream operations and companies using gas in industrial projects benefit from an initial three-year tax holiday. This tax holiday is renewable for an additional two years after the tax holiday expires if the company is performing satisfactorily. The companies also benefit from accelerated capital allowances after the tax-holiday period.

  13. A gas-flaring penalty is imposed on oil companies for wasteful disposals of gases through burning in oil fields and refineries. Companies engaged in petroleum operations are deemed to be in the upstream sector of the oil and gas sector and are subject to tax under the Petroleum Profit Tax Act. The applicable Petroleum Profit Tax rate is 85%. A reduced rate of 65.75% applies to companies for their first five years of petroleum operations. However, for petroleum operations carried out under the production-sharing contract regime, the applicable rate is 50%.

Source: WTO – Trade Policy Review, Fitch Solutions, the International Trade Administration (ITA), U.S. Department of Commerce

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
There are 15 FTZs) operating in Nigeria, five in Lagos, the country’s business capital and most populous city. Industries permitted in FTZs include chemicals, petroleum, textiles, garments, rubber, plastics, electrical and electronics, telecom equipment, metal, wood, leather, education materials and cosmetics.– Incentives are available for manufacturing, logistics services, warehousing, steel production, food processing and manufacturing, oil and gas services and tourism

– The Nigerian Export Processing Zone Authority (NEPZA) allows duty-free import of all equipment and raw materials into its export processing zones

– Up to 25% of production in an export processing zone may be sold domestically upon payment of applicable duties

– Investors in the zones are exempt from foreign exchange regulations and taxes and may freely repatriate capital

– The state also encourages private sector participation and partnership with state and local governments under the FTZ program, resulting in the establishment of the Lekki FTZ (owned by Lagos state), and the Olokola FTZ (which straddles Ogun and Ondo states and is owned by those two states, the federal government, and private oil companies)

– Workers in FTZs may unionise, but may not strike for an initial ten-year period
19 FTZs under construction or awaiting start of development– Complete tax holiday for all Federal, State and Local Government taxes, rates, custom duties and levies

– One-stop approval for all permits, operating licenses and incorporation papers

– Duty-free, tax-free import of raw materials for goods destined for re-export

– Duty-free introduction of capital goods, consumer goods, components, machinery, equipment and furniture

– Permission to sell 100% of manufactured, assembled or imported goods into the domestic Nigerian Market

– When selling in the domestic market, the amount of import duties on goods manufactured in the free zones are calculated on the basis of the value of the raw materials or components used in assembly, and not the finished product

– 100% foreign ownership of investments

– 100% repatriation of capital, profits and dividends

– Waiver of all import and export licences

– Waiver on all expatriate quotas for companies operating in the zones

– Prohibition of strikes and lockouts

– Rent-free land during the first 6 months of construction
Other incentivesThe Nigerian government maintains different and overlapping investment incentive programmes. The Industrial Development/Income Tax Relief Act provides incentives to pioneer industries deemed beneficial to Nigeria's economic development and to labour-intensive industries, such as apparel. There are currently 71 industries defined as pioneer industries for the purposes of this incentive. Companies that receive pioneer status may benefit from a non-renewable, 100% tax holiday of five years (or seven years, if the company is located in an economically disadvantaged area). Industries that use 60-80% of local raw materials in production may benefit from a 30% tax concession for five years, and investments employing labour-intensive modes of production may enjoy a 15% tax concession for five years. Additional tax incentives are available for investments in domestic research and development, for companies that invest in local government areas deemed disadvantaged, for local value-added processing, for investments in solid minerals and oil and gas, and for a number of other investment scenarios. Meanwhile, approved enterprises operating in export free trade zones are exempt from all federal, state and local government taxes, levies and rates.
Work Experience Acquisition Programme Related IncentivesIf a company has a minimum net employment of five new employees and if it retains such employees for a minimum of two years from the year of assessment in which the employees are first employed, it is granted Work Experience Acquisition Programme Relief. This relief is an exemption from income tax equal to 5% of the company's assessable profits in the assessment period in which the company qualifies, subject to other specified conditions. In addition, if a company has a minimum net employment of 10 employees and if 60% of the employees do not have any form of previous work experience and are within three years of graduating from school or a vocation, the company is granted employment tax relief. This relief is an exemption from income tax equal to 5% of its assessable profits in the assessment period in which the profits are generated.

8. Taxation – 2018

  • Value Added Tax: 5%
  • Corporate Income Tax: 30%

Source: PwC Tax summaries 2018, Fitch Solutions

8.1 Important Updates to Taxation Information

There are no proposed changes to tax laws or rates in the 2018 Budget proposals, even though the 2018-2020 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) indicate a possible increase of VAT on luxury goods from 5% to 15%.

In 2018, Nigeria and Singapore signed a treaty for the avoidance of double taxation on income and capital gains tax between the two countries. When ratified by the National Assembly, the treaty will provide enhanced reliefs to investors and businesses between both countries to eliminate or reduce the incidence of double taxation in addition to exchange of information and mutual assistance on tax matters.  

On January 26, 2018, the Nigerian government announced the ratification of the Nigeria-Spain DTT. The DTT was initially negotiated in June 2009 and presented to the National Assembly for ratification in 2016, alongside DTTs with Sweden and South Korea. 

Nigeria has also issued the Income Tax (Country-by-Country Reporting) Regulations 2018. The Regulations are part of the implementation plans under Action 13 of the OECD’s Base Erosion and Profit Shifting (BEPS) project. This is also a follow-up to Nigeria’s signing of the Multilateral Competent Authority Agreement for the automatic exchange of Country-by-Country reports in January 2016, which was subsequently ratified by the Federal Executive Council in August 2016. The Country-by-Country reporting Regulations provide guidance to multinational enterprises on their reporting obligations to Federal Inland Revenue Service (FIRS) in relation to their group income, taxes paid, and other indicators of their group economic activity. This information will enable FIRS to perform high-level transfer pricing risk assessment as well as evaluate other BEPS related risks. The new rules are expected to empower FIRS to put in place adequate frameworks and mechanisms to enable it to collaborate with the revenue authorities of other tax jurisdictions in fighting BEPS. The issuing of these regulations further underscores the Nigerian Government’s resolve to fight aggressive tax avoidance schemes and profit shifting in Nigeria.

8.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax (CIT)30% on profits (mainly non-oil sectors)
Corporate Income Tax for small companies in the manufacturing industry and wholly export-oriented companies with turnover not exceeding NGN1 millionCIT rate is reduced to 20% in the first five calendar years of operation
Petroleum Profit Tax (PPT) is a tax on the income of companies engaged in upstream petroleum operations in lieu of CITRates vary as follows:

– 50% for petroleum operations under production sharing contracts (PSC) with the Nigerian National Petroleum Corporation (NNPC)

– 65.75% for non-PSC operations, including joint ventures (JVs), in the first five years during which the company has not fully amortised all pre-production capitalised expenditure

– 85% for non-PSC operations after the first five years
Capital Gains Tax rate10% on gross salaries
Withholding Tax (dividends, interest, rental income, royalties)10% on investment income
Withholding Tax on building, construction and related activities; contract for supplies5%
Withholding Tax on consulting, management and technical services; commissions10%
Value Added Tax (VAT)5% on goods and services
Education Tax2% on assessable income
Pension contributions10% on monthly gross salary, paid by employer, 8% paid by employee (Expatriates covered by a plan in their home country may qualify for exclusion)

Source: PWC
Date last reviewed: August 28, 2018

9. Foreign Worker Requirements

9.1 Visa Policies

Nigeria has expanded the availability of visas on arrival and broadened the list of activities permitted for both visas on arrival and consular business visas. Effective in 2017, foreign nationals from countries that do not have a Nigerian embassy will be eligible to obtain visas on arrival at a port of entry. Activities that will be permitted on a visa on arrival or consular business visa, include meetings, negotiating contracts, conducting sales, job interviews, training or research, purchasing and distributing Nigerian goods, attending trade fairs, and participating in emergency or relief work. The changes to the visa rules for foreign business travellers and investors are part of the Nigeria Immigration Service's 60-day action plan to make it easier to do business in Nigeria.

9.2 Work Permits

Existing labour regulations continue to restrict the employment of foreign nationals, particularly in low-skilled positions.

Work permits are required for all foreign nationals intending to work in Nigeria. The Executive Order signed in February 2018 prohibits the Ministry of Interior from providing foreign workers with work visas if their skills and expertise are already available locally in Nigeria. Furthermore, the Executive Order elaborates that foreign professionals will be considered for contracting purposes only in cases when it is certified by relevant Nigerian authorities that their expertise is not available in Nigeria. Lastly, the Executive Order explicitly directs national Ministries, Departments and Agencies to engage local professionals in the planning, design and execution of national security projects. Employers hiring foreign workers must obtain an Expatriate Quota and a Business Permit from the Ministry of Internal Affairs. Only workers coming from other ECOWAS countries do not need a work permit.

9.3 Other Procedures

The costs of employing foreign workers are generally high in Nigeria owing to high relocation expenses, and processing fees for work and residence permits. There are other fees relating to the renewal of quota position, restoration of lapsed quota and other services relating to the employment of foreign workers. The main way to legally work in Nigeria is by acquiring a Combined Expatriate Residence Permit and Aliens Card (CERPAC). This document is a combined residency and work permit, but involves a lot of paperwork. An employment contract is a prerequisite for obtaining a CERPAC. In addition, there is limited flexibility for workers to change jobs on the same permit and this would require a re-application process.

9.4 Visa/Travel Restrictions

There are four different types of entry permits for Nigeria: tourist visa, business visa, temporary work permit visa and subject to regularisation (STR) visa. The STR is required for taking up paid employment as an expat in Nigeria.

The business visa is for business-related purposes only, except employment. The temporary work permit (TWP) allows holders to perform specific short-term work only, for example, equipment repairs, research, auditing and installation work.

The TWP is a short-term work and residence permit granted to foreign nationals invited by corporate bodies to provide specialised, skilled services. It is valid for three months and can be renewed at the discretion of the Nigerian authorities.

The CERPAC enables a foreign employee to work and live in Nigeria. To obtain a CERPAC: the Nigerian company must have obtained an expatriate quota approval; and the foreigner must have obtained an STR visa. The official cost of a CERPAC is just over USD$1,400 and the process usually takes three to six days. The CERPAC is valid for one year and may be renewed upon expiry.

Source: Fitch Solutions, Nigerian government sources

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
B2 (stable)07/11/2017
Standard & Poor'sB (stable)16/09/2016
Fitch RatingsB+ (negative)17/05/2018

Source: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World CompetitivenessN/AN/AN/A

Source: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices

World ranking
Economic Risk Index Rank87/202
Short-Term Economic Risk Score51.758.156
Long-Term Economic Risk Score54.655.154.6
Political Risk Index Rank168/202
Short-Term Political Risk Score56.049.849.8
Long-Term Political Risk Score43.045.845.8
Operational Risk Index Rank156/201
Operational Risk Score37.036.436

Source: Fitch Solutions

10.4 Fitch Solutions Risk Summary


Oil is a major pillar of the Nigerian economy, and when prices were high and production robust, it helped the country garner large foreign reserves, a relatively healthy current account position and low foreign debt (the country paid off much of its debt in 2006). However, since the price slump in 2014 and Niger Delta Avengers attacks in 2016, the structural weakness of an overreliance on oil exports has been highlighted. While the economy will benefit from the beginnings of a cyclical upswing over the coming years, the trajectory of its recovery remains highly vulnerable to further shocks or a downturn in investor sentiment. Power sector reforms are crucial for long-term productivity gains.


Nigeria's vast natural resources, as well as strong economic and population growth over the past decade, have given rise to a growing consumer class and expanding labour pool, and has attracted considerable investor interest; however, the country remains a difficult operating environment. Businesses operating in Nigeria face heightened security costs, limited labour and capital mobility and uncompetitive import conditions. Nigeria's economic potential remains severely constrained by the acute shortcomings in the country's utilities and transport sectors, high levels of social instability in restive south-east and north-east regions of the country and a high structural reliance on oil revenues for fiscal support and FX liquidity.

Sectarian conflict is rife in many parts of the country, with inter-religious tensions occasionally erupting into massive violence in which hundreds are killed. Militants in the oil-rich Niger Delta have staged repeated attacks on oil installations, making the region unstable, while Boko Haram remain a dangerous force in the north-east. Rampant criminal activity and recurrent militant attacks on critical infrastructure - particularly in the Niger Delta - threaten the safety of foreign workers and business operations. This also disrupts the country's predominantly gas-reliant power supply and limits freight transit routes. Meanwhile, pervasive corruption further obfuscates already convoluted bureaucratic procedures, raising legal costs and deterring foreign direct investment.

Source: Fitch Solutions
Date last reviewed: August 28, 2018

10.5 Fitch Solutions Political & Economic Risk Indices 

Graph: Nigeria short term political risk index
Graph: Nigeria short term political risk index
Graph: Nigeria long term political risk index
Graph: Nigeria long term political risk index
Graph: Nigeria short term economic risk index
Graph: Nigeria short term economic risk index
Graph: Nigeria long term economic risk index
Graph: Nigeria long term economic risk index

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: August 21, 2018

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Nigeria Score36.055.433.030.325.3
West Africa Average33.736.736.230.631.1
West Africa Position (out of 16)6112812
SSA Average34.538.335.332.532.0
SSA Position (out of 48)171262433
Global Average49.749.850.049.349.9
Global Position (out of 201)15659163165174

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Nigeria vs global and regional averages
Graph: Nigeria vs global and regional averages
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Secruity Risk Index
Ghana 46.150.1
Cape Verde 43.138.9
Cote d'Ivoire 36.9 36.940.643.2 27.0
Senegal 36.0 29.438.333.542.9
Burkina Faso33.637.434.427.2
Sierra Leone28.125.332.223.331.6
Regional Averages33.736.736.230.631.1
Emerging Markets Averages46.848.047.545.846.1
Global Markets Averages49.849.850.049.349.9

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: August 21, 2018

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Nigeria

Graph: Major export commodities to Nigeria (2017)
Graph: Major export commodities to Nigeria (2017)
Graph: Major import commodities from Nigeria (2017)
Graph: Major import commodities from Nigeria (2017)
Graph: Merchandise exports to Nigeria
Graph: Merchandise exports to Nigeria
Graph: Merchandise imports from Nigeria
Graph: Merchandise imports from Nigeria

Official Exchange Rate HK$/US$, average
7.76 (2013)
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
Source: Hong Kong Census and Statistics Department, Fitch Solutions

Growth rate (%)
Number of Nigerian residents visiting Hong Kong2,190-16.3

Source: Hong Kong Tourism Board

2017Growth rate (%)
Number of Africans visiting Hong Kong142,512-11.6

Source: Hong Kong Tourism Board
Date last reviewed: August 31, 2018

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Nigerian companies in Hong KongN/AN/A
- Regional headquarters
- Regional offices
- Local offices

Source: Hong Kong Census & Statistics Department

11.3 Treaties and Agreements between Hong Kong and Nigeria

Tax treaty negotiations are in progress between Nigeria and Hong Kong.

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Nigerian Consulate in Hong Kong
Address: Suite 502, 5/F, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong
Email: nigeriaconhk@yahoo.com
Tel: (852) 2827 8813
Fax: (852) 2827 8892

Source: www.nigeria-consulate.org.hk

11.5 Visa Requirements for Hong Kong Residents

Hong Kong residents need a visa to visit Nigeria. Key requirements for application are:

  • Passport with minimum of six months validity
  • Duly completed online visa application form with two passport photographs
  • Applicant's return air ticket/itinerary
  • A letter of invitation from a company/host in Nigeria accepting immigration responsibility
  • Self sponsored businessman may not require letter of invitation, but will require to show evidence of sufficient funds
  • Copy of data page of passport or residence permit of signatory to invitation letter
  • Certificate of Incorporation for the Nigerian company
  • Applicant's company guarantee letter
  • Hong Kong ID card copy
  • Evidence of hotel reservation or host address in Nigeria
  • Evidence of online payment for visa fees

All categories of visas are processed within 48 hours upon submission of application, provided all requirements are met. Visa on arrival is also granted at all ports of entry in Nigeria within 48 hours of application, provided all requirements are met.

Content provided by Picture: Fitch Solutions – BMI Research
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