Doing Business in Nigeria
Nigeria’s liberalised business regime and proactive reform
measures are making it easier to do business in the country
Since economic liberalisation in 1995, Nigeria has had one of the most open regimes in Africa for foreign investors. In the past 15 years, much has been done to reform business practices and regulations, and efforts to further improve Nigeria’s business environment are ongoing.
The Corporate Affairs Commission (CAC) is responsible for incorporating companies. It has offices in 32 of Nigeria’s 36 states. Since 2003, companies can use an online system for incorporation as well as an e-payment regime; these administrative improvements have brought the average duration of the incorporation process down to three days, from up to three months before the introduction of the online system. After incorporation, businesses with foreign participation must register with the Nigerian Investment Promotion Commission (NIPC) in order to be covered by the treatment and protection provisions of Nigeria’s investment laws. Companies locating in Nigeria’s Export Free Zones do not have to register with the NIPC – for them, investment approval and licensing is governed by the Nigerian Export Processing Zones Authority (NEPZA).
Working in Nigeria
Nigeria has slipped slightly in this year’s World Bank Ease of Doing Business ranks, from 120 in the world to 125, but one area in which it scores well is labour: for ease of employing workers, it is ranked 37th out of the 183 economies surveyed. Nigeria has a liberal labour regime based on English common law, and the majority of Nigerian workers are unionised. The country’s labour regime is currently being revised with the support of the International Labour Organisation (ILO). Nigeria’s minimum wage was set at N8’625 in mid-2007, but negotiations are under way to raise the minimum wage to keep up with inflation.
There are no significant restrictions regarding hiring and firing, although it may be difficult to source highly skilled workers locally for some industries. To hire workers from abroad, companies must obtain a Business Permit and an Expatriate Quota from the Ministry of Internal Affairs. Companies in the Free Zones do not need an Expatriate Quota, and workers from the other ECOWAS states (Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea-Bissau, Liberia, Mali, Senegal, Sierra Leone and Togo) do not require a work permit to work in Nigeria.