cn 2010 construction

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The Business, Trade and Investment Guide 2010/2011

CORPORATENIGERIA

Corporate Nigeria 2010/2011 is aCorporate Guides International publication.

www.corporate-nigeria.net


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NIGERIA| CORPORATE GUIDES4

CONTENTS

Country Profile

08 Nigeria at a Glance 10 Nigeria Country Profile

History & Culture

16 History & Culture Overview 20 Nigerian Leaders 19602010

Politics

26 Politics Overview 30 Interview: Mr. Odein Ajumogobia (SAN),

Minister of Foreign Affairs 32 Interview: Mrs. Farida Mzamber Waziri,

Executive Chairman, Economic and FinancialCrimes Commission (EFCC)

Economy

34 Economic Overview38 Nigeria's Economic Growth

42 Interview: Dr Emmanuel Egbogah,P.Eng, (OON), Special Adviser to the

President on Petroleum Matters

Foreign Direct Investment

46 Foreign Direct Investment Overview 48 Interview: Engr. Mustafa Bello (FSNE),

CEO/Executive Secretary of NigerianInvestment Promotion Commission (NIPC)

54 In Focus: Eko Atlantic 60 Incentives for Investors 62 Doing Business in Nigeria 66 Interview: Mr. Mirko Plath, Managing Director,

Weststar Associates Ltd 70 Interview: Dr. Bamanga Tukur, President of

the African Business Roundtable (ABR)and Chairman NEPAD Business Group


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CONTENTS

5CORPORATE GUIDES|NIGERIA

Special Investment Destinations

74 Kano State: History and Background 80 Interview: His Excellency Mallam Ibrahim

Shekarau, Executive Governor of Kano State 82 Bayelsa State: History and Background

90 Interview: Chief Timipre Sylva, ExecutiveGovernor of Bayelsa State

Legal & Accounting

92 What You Need to Know AboutDoing Business in Nigeria

101 In Focus: Kenna & Associates

Banking, Finance & Insurance

102 Banking & Finance Overview106 Interview: Mr. Stephen Olabisi Onasanya,

CEO, First Bank of Nigeria111 In Focus: First Bank of Nigeria

114 In Focus: Commerzbank116 Nigeria Banking Developments 2010:

A New Broom Sweeps Clean120 In Focus: Guaranty Trust Bank Plc

Energy

124 Energy Overview128 A New Era for Oil132 Nigeria and OPEC140 Natural Gas in Nigeria142 Nigerian Liquid Natural Gas144 Electricity in Nigeria148 Alternative Energy


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CONTENTS

Infrastructure Telecommunications & IT

152 Telecoms Overview

156 Interview: Mr. Steve Evans, CEO

Etisalat Nigeria

162 Internet Taking Off

164 Mobile Market Matures166 Innovation in ICT

Infrastructure Transport

168 Transport Overview

172 Interview: Mr. Michael Druce,

Managing Director DHL Express Nigeria

179 Facts & Figures DHL Express Nigeria

180 Aviation in Nigeria

184 Investing in Transport

188 Firsts in Transport

Industry

190 Industry Overview

194 Nigerian Sugar

196 Beer Industry

198 Nigerias Trade Relations

Solid Minerals

200 Solid Minerals Overview

204 Interview: Arc. Musa Mohammed Sada,

Honourable Minister of Mines

and Steel Development


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7CORPORATE GUIDES|NIGERIA

Agriculture

208 Agriculture Overview

212 Cocoa Growing

214 Cassava a Multi-Purpose Plant

216 Nigerias Food Security

Construction

218 Construction Overview

Tourism

222 Tourism Overview

228 Interview: Mr. Panos Panayis,

General Manager Eko Hotel

& Suites, Victoria Island

233 In Focus: Eko Hotel & Suites Lagos

Listings

234 States of the Federal Republic of Nigeria

235 Good to Know Nigeria

238 Airlines

239 Hotels

242 Diplomatic Missions Abroad249 Foreign Embassies in Nigeria

254 List of the Federal Cabinet

255 Weblinks Corporate Nigeria

256 Imprint


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NIGERIA| CORPORATE GUIDES21 8

CONSTRUCTION

Nigeria has the potential to be one

of the biggest construction markets on

the planet.

While the world is still struggling to

emerge from the global economic col-

lapse, Nigerias construction indus-

try is growing fast and is likely to grow

astronomically over the next decade,

according to forecasts made in a June

2010 report by Global Construction

Perspectives and Oxford Economics.

Estimates suggest that current growth

in the construction industry is greater

than that of India. Indeed, the report

found that Nigerias population of

approximately 154 million is urbanising

at one of the fastest rates in the world,

but construction is now only 3.2 per cent

of the Gross Domestic Product. From2009 to 2020, only Nigeria and India will

enjoy higher growth rates than China in

their construction output.

Hopes for the Future

This outlook is excellent news for the

country as a whole. Every ambition that

the Nigerian government has such

as creating much-needed housing,

improving public services, developing

its tourist sector, improving transport

links, creating new jobs and eradicating

poverty can be linked to the construc-

tion sector.

Foreign investment is desperately

needed to build roads, ports, bridges and

airports. The countrys archaic railway

network, barely altered since colonial

days, is also in great need of an upgrade.

Roads, in particular, are a prob-

lem. Only the capital Abuja and, to a

lesser extent, the coastal metropolis of

Lagos, has a reasonable road network.

Nationwide, road fatalities are one of

the most common causes of death. In

June 2010, the World Bank announced

that it would invest USD300 million for

the overall development of Nigerianroads. However, far greater investment

is needed to bring the country up to

scratch.

Construction Overview

The awakening of a sleeping giant

Foreign investment is desperately neededto build roads, ports, bridges and airports.


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21 9CORPORATE GUIDES|NIGERIA

Hotels and numerous tourist-related

facilities will need to be built if Nigeria is

to achieve its target of becoming one of

Africas most desirable tourist destina-

tions. Many existing tourist attractions

are in need of major work.

It is hoped that Nigeria, which has

been to a certain degree protected from

the global economic crisis by rising oil

prices, can attract overseas compa-

nies seeking new markets in developing

countries.

Ripe for Investment

Nigerias surge in the construc-

tion sector comes despite some major

obstacles corruption, government

bureaucracy and poor existing infra-

structure. All are slowly but surely being

tackled, though some problems remain.

Most of these pale into comparison,

however, when set against the back-

drop of the enormous opportunities that

Nigeria offers to foreign investors.

In the past, the majority of large-

scale projects were undertaken by the

government. Although this is often the

case today, many more large-scale

projects are being constructed by both

the government and the private sector.

The country is certainly ripe for pri-

vate investment as the Nigerian gov-

ernment aggressively seeks to upgrade

infrastructure in its pursuit of its vision

for 2020. Indeed, there are simply hun-

dreds of projects many related to key


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CONSTRUCTION

infrastructure being embarked upon

around the country and which need for-

eign investors.

For example, as well as investing

heavily in the countrys roads, the World

Bank, in July 2010, committed a total

of USD400 million to the nations elec-

tricity and gas improvement project. The

programme aims to improve the power

supply to all corners of the country and

represents an important upgrade in

infrastructure that will aid both the peo-

ple of Nigeria and companies who are

already present or are looking to invest

in the future.

Nigeria is actively courting foreign

investment on both a governmental and

state level. Unsurprisingly given the

favourable conditions, many overseas

governments are encouraging its com-

panies to take advantage of the many

large projects on offer in Nigeria.

In July 2010, Turkish President

Abdullah Gl visited Nigeria, along

with ministers, managers of leading

business unions and over 100 Turkish

investors, to attend the Turkey-Nigeria

Trade and Investment Forum, organ-

ized jointly by the Turkish Confederation

of Businessmen and Industrialists

(TUSKON) and the Turkish Exporters

Assembly. There, they met with nearly

500 representatives of Nigerian compa-

nies, with TUSKON calling on Turkish

entrepreneurs to take advantage of the

myriad investment opportunities in the

country.

Similarly, on a state level, Imo state

in the Niger Delta, which is led by gov-

enor Ikedi Ohakim, is seeking out US

investors in sectors such as housingand energy development. Housing for

all income levels is needed nationwide.

In the short-term, projects are aiming

to build as many as 350,000 houses.

However, hundreds of thousands more

will need to be built over the next 10 to

20 years to satisfy the countrys bur-

geoning population.

Nigerias Lucrative Real Estate Market

In a similar vein, real estate can pro-

vide a lucrative form of business for

investors. Lagos is one of the worlds

fastest growing cities and forecasts pre-

dict that by 2020 it may even have grown

into a metropolis to rival the likes of

Tokyo. The housing market is only going

to grow in the future and Nigerian real

estate is currently thriving with returns

on rent and price appreciation in some

cases as high as 30 per cent a year. A

steadily expanding middle-class popu-

lation in both Lagos and Abuja demands

a significant amount of work in the resi-

dential sector.

Investing in the real estate market is

also becoming easier for both locals and

foreigners. Historically the 1978 Land

Use Act, which limits access to land for

development purposes, has long been

identified as a significant disincentive to

real estate development and the growth

of the real sector of the nation's econo-

my. Specifically, the act stated that pro-

spective investors needed the state gov-

ernors consent when looking to acquire

land for development.

However, the time it takes to gain this

permission has been greatly reduced

in many of the countrys 36 states and

there have been significant moves to

reform this act, with former president

Umaru Yar'Adua getting the ball rolling

with his proposed Land Use Amendment

Act of 2009.

Moreover, current presidentGoodluck Jonathan is equally deter-

mined to ensure that the 1978 Land Use

Act is reformed in order to help free

up the market. When asked about the

act in 2010, he said: Let me use this

opportunity to reaffirm the adminis-

trations commitment towards amend-

ing or repealing of such laws that are

not in sync with aspiration for a society

governed by rule of law and respect for

human dignity.

Opportunities for Western

Sub-Contractors

There are also significant opportu-

nities for western companies provid-

ing subcontracting services, largely

because the subcontracting sector is

not as developed in Nigeria as it is in

America or Europe. Western subcon-

tractors with specialist construction

skills could potentially take work off of

Nigerian general contractors, who hith-

erto may have handled all aspects of a

job themselves.

Such a relationship would be benefi-

cial to both parties, with the Nigerian

contractor being freed up to focus on

the broader aspects of a given project,

whereas the western sub-contractor

will have tapped into a valuable income

stream.

The supply of specialist materials, as

well as equipment rentals, are just twoareas that have long been earmarked

as potentially highly lucrative areas for

western sub-contractors.

The country is certainly ripe for privateinvestment as the Nigerian governmentaggressively seeks to upgrade infrastructurein its pursuit of its vision for 2020.

... govenor Ikedi Ohakim, is seeking out USinvestors in sectors such as housing andenergy development.


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22 1CORPORATE GUIDES|NIGERIA

The Future is Now

There is widespread belief in Nigeria

that there can be no further procras-

tination with regards to investing in

the countrys infrastructure. President

Jonathans clean-sweep of the minis-

tries should help galvanise those in

positions of power to help lay the foun-

dations necessary at this crucial time in

the countrys history.

The last few years has seen the

Nigerian government, via bodies such

as the Economic & Financial Crime

Commission (EFCC) and its sister agen-cies, save a large amount of money

which may hitherto have been lost to

corruption and this money has in turn

been used to develop the nations infra-

structure.

Fortunately, Nigeria is blessed with

the raw materials needed for a thriving

construction industry. Timber, cement,

aggregates-granites and sharp sand

all the basic ingredients can be found

in the country. The government needsto ensure that these materials can con-

tinue to be bought at a reasonable cost.

Foreign companies are indeed wak-

ing up to the investment opportunities

that lie within Nigeria. The IFC, a mem-

ber of the World Bank Group, announced

in July that it will invest USD12.1 mil-

lion in Nigerian companies Skye CAPIC

and CAPIC Hexagon to develop hotels

in Nigeria.

Minister of Transport Mr. Yusuf

Suleiman also announced in July that

work on coastal rail-lines across the

Niger Delta was due to commence

soon, with some 25 companies bidding

for the contract. All forms of transport

across the country need to be developed

in order to take pressure off the roads,

he said.

China and Nigeria have also signed

an USD8 billion deal to build the first

of three oil refineries in the Lekki freetrade zone of Lagos. This develop-

ment will create some 20,000 jobs for

Nigerians.

The Nigerian government is mind-

ful of the obstacles that have blocked

accelerated change in the construc-

tion sector and are keen to incorporate

successful strategies and frameworks

from other leading economies to devel-

op essential public utilities. Transport

networks across the country have also

been earmarked for upgrades, withlast years World Bank report on the

Federal Roads Development Project

suggesting strategies to reduce pas-

senger times and ways of cutting road

fatalities.

Nigerias people, in particular its

young, can be some of the main benefi-

ciaries, especially through the creation

of jobs and the reduction of poverty, as

the country seeks to develop its infra-structure in all areas and fulfil its ambi-

tious visions for 2020.

Transport networks across the country havealso been earmarked for upgrades.


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IMPRINT

Corporate Nigeria 2010/2011 is aCorporate Guides International Ltd.publication, produced in collaboration

with the Nigerian InvestmentPromotion Commission (NIPC).

Publisher:Corporate GuidesInternational Ltd.

Executive Director:Elke [email protected]

Editorial Director:Anji [email protected]

Assistant Director:Jenny [email protected]

Design & Production:CONIN Werbeagentur GmbH,Cologne, Germany

Please visit our website:www.corporate-nigeria.net

For editorial informationplease write to:[email protected]

To advertise within Corporate Nigeriaplease write to:[email protected]

To purchase your own copyplease write to:[email protected]

Contributors:

Justine Doody, Johnny Paige, TonyKiely, Greg Leadham, Steven Mather

Sources of Facts, Figures, Graphsand Tables:

Access Intelligence

AllAfrica Global Media

Broad Street Journal Nigeria

Business Monitor International

Business Wire

BusinessDay Nigeria

Corporate Guides Research

FDA News

Finnish Fund for Industrial Cooperation

Global Insight

World Bank

Governmental Sources

Highway Africa News Agency

International Finance Corporation

International TelecommunicationsUnion (ITU)

Interviews: Corporate GuidesResearch

IRIN (Integrated Regional InformationNetworks)

Lagos State GovernmentLibrary of Congress FederalResearch Division

Multilateral Investment GuaranteeAgency

National Sugar Development Council

National Food Security Programme

Nigeria Export Processing ZonesAuthority

Nigerian Federal Ministry of Transport

Nigerian Investment PromotionCommission

Nigerian National Agency for Food andDrug Administration and Control

OECD

Office of the United States TradeRepresentative

OT Africa Line (OTAL)

Paul Budde Communication

Reuters

TeleGeography

The Associated Press

The Economist

The Economist Intelligence Unit

The Financial Times

The Nigerian CommunicationsCommission

The Nigerian Ministry of Informationand Communications

The Public-Private Infrastructure

Advisory Facility (PPIAF)

This Day Nigeria

Transparency International

United States Department ofAgriculture

US State Department

Vanguard Nigeria

World Bank

Xinhua News Agency

Image Sources:

Anji Gill

DHL

Elke Gill

Federal Government of Nigeria

iStock Photo

Jennifer Tan

LufthansaNasa

Obudu Ranch Int. Mountain Race

Special Thanks go to:

NIPC Nigerian Investment PromotionCommission

Stanbic IBTC Bank Plc

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Corporate Guides International Ltd.

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Nigerian InvestmentPromotion Commission (NIPC)

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Imprint

Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publishers accept noresponsibility for any loss, financal or otherwise, sustainedby any person using this publication. No part of this publication may be reproduced,stored in retrieval system or transmitted in any form by any means, without prior written permission of Corporate Guides. All rights are reserved.

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