TYPES OF INVESTMENT
- Foreign Direct Investment
- Foreign Portfolio Investment
- Local Direct Investment [THINK NIGERIA]
A foreigner who wants to invest or do business in Nigeria has various options. He can use either foreign direct investment option or foreign portfolio investment option.
Foreign direct investment hereinafter referred to as ‘FDI’ involves a foreigner establishing a direct business interest in Nigeria; such as establishing manufacturing concern etc. while foreign portfolio investment hereinafter ‘FPI’ involves a foreigner investing in financial assets, such as stocks and bonds.
A foreign investor has basic consideration and checks to do before moving or risking his capital. Some of the basic checks include economic factors and political factors.
FOREIGN DIRECT INVESTMENT ‘FDI’
FDI is a long term investment; it can take the shape of a foreign multi-national setting up a factory in Nigeria or any other sort of business. There are numerous factors such multi-national must consider this includes the following;
AVAILABILITY OF LABOUR SKILL: Nigeria as a country is endowed with abundant human resources. Every investor is interested in quality workforce and Nigeria is endowed abundantly in this area so investing in Nigeria will not present much challenge to any investor in this regard.
WAGE RATE: Due to the disparity in the exchange rate of Naira the currency of Nigeria and united state Dollar official rate as at 28/05/2017 is 376Naira to Dollar makes the minimum wage in Nigeria which is 18,000 although government has set up a committee that will look into 54,000 minimum wage request by Labour . Even if this is approved this is just $143.62 per month for the least paid worker. This is still cheap and favourable to foreign investor especially for multinationals who are looking for cheap Labour for manufacturing and has plans to re-export goods produced to their country
TAX RATE
Nigeria has a fantastic tax rate, with the help of tax attorneys a foreign investor will be able to enjoy all the benefits allowed by Nigerian tax laws.
TRANSPORT AND INFRASTRUCTURE
Nigeria has many seaports for export/transport trade facilitation. The government is also embarking on extensive railways modernization. Thus both local distribution of goods and services and export or import is easy
SIZE OF ECONOMY/POTENTIAL FOR GROWTH
Nigeria is the power house of Africa. It has the largest economy and the biggest population. These are all ingredient for growth.