NIGERIA: NIGERIAN INVESTMENT PROMOTION COMMISSION SOLICITS

UNCLAS SECTION 01 OF 02 ABUJA 000674 SENSITIVE SIPDIS DEPT PASS TO USTR-AGAMA AND USTDA-MARIN DEPT PASS USAID AFR/SD FOR CURTIS AND ATWOOD BAGHDAD FOR DUNDAS MCCULLOUGH TREASURY FOR PETERS, IERONIMO AND HALL DOC FOR 3317/ITA/OA/KBURRESS AND 3130/USFC/OIO/ANESA/CREED E.O. 12598: N/A TAGS: EINV ETRD ECON PGOV NI SUBJECT: NIGERIA: NIGERIAN INVESTMENT PROMOTION COMMISSION SOLICITS U.S INVESTMENT ¶1. (SBU) Summary. During an April 9 courtesy call, officials of the Nigerian Investment Promotion Commission (NIPC) informed the Ambassador that the organization is working towards attracting Foreign Direct Investment (FDI) into Nigeria, despite the global economic downturn. It is currently working within the Government of Nigeria (GON) to introduce streamlining of business disputes, improving the investment climate and further trade policy reforms. To assist companies with disputes, NIPC supports Alternative Dispute Resolution (ADR) mechanisms rather than the long and tortuous Nigerian judicial system. It is also in the process of reviving the "Doing Business" Committee established during the administration of former President Olusegun Obasanjo. A One-Stop Investment Center (OSIC) has also been established at the NIPC to streamline procedures for business registration, licensing and obtaining necessary permits by foreign investors. NIPC has lobbied the GON to remove import bans that discourage foreign direct investment (FDI). NIPC seeks USG assistance in capacity building to increase its ability to implement its programs. The NIPC's initiatives are timely and useful; however progress will likely be difficult. End Summary. ¶2. (SBU) On April 9, the Ambassador, Economic Counselor and Econ Specialist notetaker met with NIPC Executive Secretary Engineer Mustafa Bello and his senior staff. Bello highlighted the need for collaboration between the Embassy and the NIPC in attracting U.S investments to Nigeria. The Ambassador reported that there was substantial U.S. interest in Nigeria, but the investment climate discourages investment. The Ambassador noted that lack of respect for the sanctity of contracts by successive administrations at the federal and state levels, import bans, and infrastructure challenges were major drawbacks. Although a cordial bilateral relationship exists between both countries, the Ambassador said U.S investors look beyond the bilateral relationship and focus on the investment climate in decision-making. . Sanctity of Contracts -------------- . ¶3. (SBU) Bello replied that he was aware that the cost of doing business in Nigeria was high, but NIPC was working within the GON to improve that. The NIPC was also working with the World Bank to introduce Alternative Dispute Resolution (ADR) mechanisms in three pilot states, Kaduna, Lagos, and Abia, and plans to expand to other parts of the country. Bello expects the ADR mechanism will encourage businesses to operate in Nigeria because it will be a positive alternative to Nigeria's long and tortuous judicial process. The Ambassador commended the initiative and solicited Bello's support in resolving an ongoing business dispute between a U.S. company and the Abia State government, to whom she recently sent a letter. . Investment Climate -------------- . ¶4. (SBU) Bello reported that a "Doing Business" committee, which became moribund at the end of the Obasanjo administration, will be revived to provide policy advice on how to improve the business climate. The "Doing Business" committee will be responsible for coordinating input for the World Bank's "Doing Business Report" and recommending appropriate policy reforms to improve the investment climate. According to Bello, the committee made some strides during the last administration which he believes can be extended. . One-Stop Investment Center -------------- . ¶5. (SBU) Bello said a One-Stop Investment Center (OSIC) has been established at the NIPC as a facilitating mechanism. All relevant government agencies and ministries are located in the OSIC to streamline services required by investors and provide them in a transparent and efficient way. Bello contended that businesses can be incorporated within 24 hours at the OSIC and all relevant permits and licenses can be obtained there. The agencies that are currently at the OSIC include the Corporate Affairs Commission, the Nigerian Immigration Service, the Nigerian Customs Service, the Federal Inland Revenue Service, the National Office for Technology Acquisition and Promotion, the National Agency for Food and Drug Administration and Control, the Central Bank of Nigeria, the National Bureau of Statistics, the Ministry of Solid Minerals, the Ministry of Finance, the Standards Organization of Nigeria, the Federal Capital Territory Administration, and the NIPC. There are ABUJA 00000674 002 OF 002 plans to expand the OSIC to include the Ministry of Petroleum. The Ambassador lauded the establishment of the OSIC and advised the NIPC to publicize its existence by linking it to the GON website and making presentations at various investor fora, such as the Corporate Council for Africa investment workshops. . Trade Policy -------------- . ¶6. (SBU) Regarding trade policy and import bans, Bello opined that the bans don't work because goods are eventually smuggled into the country without the GON receiving revenue. When he was Minister of Commerce from 1999 to 2003 he advised against bans and for tariffs on imports, which could be used to develop the sectors that the GON wanted to protect. Moreover, bans were bad because investors require foreign inputs to manufacture in Nigeria and bans thereby discourage foreign investment. . Capacity Building -------------- . ¶7. (SBU) Bello asked for the Ambassador's support in providing overseas training for his staff and conducting studies on how to improve Nigeria's investment climate. The Ambassador, without promising assistance, responded that it would be more useful for training to be conducted locally because more of his staff will benefit and train-the-trainers program , she opined had more of a multiplier effect. Regarding feasibility studies, the Ambassador mentioned that the United States Trade and Development Agency (USTDA),which was planning a visit to Nigeria in June 2009, could explore possibilities with NIPC during their visit. . Comment -------------- . ¶8. (SBU) The NIPC leadership seems to have clear goals and how to go about achieving them. Bello's experience as Minister of Commerce under Obasanjo gives him a basis for understanding the prerequisites for attracting FDI. He was able to push through some reforms to facilitate foreign investment in collaboration with the economic team during the last administration, which led to the establishment of the OSIC. He is an advocate for broader reforms on the investment climate, reduced tariffs, a more open trade policy and ADR. We hope he has the political dexterity to achieve these goals, including achieving an enforcement system for any ADR decisions. ¶9. (U) This message was coordinated with the Consulate in Lagos. SANDERS