NIGERIA: NIGERIAN INVESTMENT PROMOTION COMMISSION SOLICITS

UNCLAS SECTION 01 OF 02 ABUJA 000674

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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
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.

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

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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
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.

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