Doing Business in Nigeria
Since economic liberalisation in 1995, Nigeria has had one of the most open regimes in Africa for foreign investors. The new liberalised business regime is making it easier to do business in the country, and efforts to reform practice and regulation are ongoing. The aim is to successfully leverage the nation's vast wealth of fossil fuels.
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).
Foreign and Direct Investment (FDI)
Nigeria has made it into the top 20 global destinations for Foreign Direct Investment, and Nigeria receives the largest amount of Foreign Direct Investment (FDI) in Africa. FDI inflows have been growing enormously over the course of the last decade: Nigeria’s FDI reached US$11 billion in 2009 according to UNCTAD, making the country the nineteenth greatest recipient of FDI in the world.
Nigeria’s most important sources of FDI have traditionally been the home countries of the oil majors. The USA, present in Nigeria’s oil sector through Chevron Texaco and Exxon Mobil, had investment stock of USD3.4 billion in Nigeria in 2008, (the latest figures available). The UK, one of the host countries of Shell, is another key FDI partner – UK FDI into Nigeria accounts for about 20% of Nigeria’s total foreign investment.
As China seeks to expand its trade relationships with Africa, it too is becoming one of Nigeria’s most important sources of FDI; Nigeria is China’s second largest trading partner in Africa, next to South Africa. From US$3 billion in 2003, China’s direct investment in Nigeria is reported to be now worth around US$6 billion. The oil and gas sector receives 75% of China’s FDI in Nigeria.
Other significant sources of FDI include Italy, Brazil, the Netherlands, France and South Africa.