Download incentives to investors in the industry

INCENTIVES TO INVESTORS IN THE INDUSTRY
The statutory framework for investments in Nigeria, which provides
specific measures that are meant to encourage investors, guides
investments in the Nigerian telecom market. The government of
Nigeria has provided an enabling environment, which is conducive and
attractive to investors, with the introduction of a package of incentives
favourable to investors. Such incentives include:
 Good tariff structure, which ensures investors recover their
investment over a reasonable period of time.
 Import duty on all telecom equipment reduced from 25% to
5% for two years from August 2001
 Measures on speedy clearance of goods at the ports
 Exclusivity period for licenses, e.g. 5 years for the GSM
licenses, 3 years for long distance international gateway
operators.
 Pioneer status for five years (under industrial Development
(Income Tax Relief) Act 1990) is offered interested investors
who want to set up plants for the manufacture of telecom
equipment in the country.
ENTRY REQUIREMENTS AND PROCEDURES FOR POTENTIAL
INVESTORS.
Under the Act No. 75 of 1999, no person, or organization shall
operate a telecommunications service in Nigeria unless it is:
 Registered as a body corporate under the Companies and Allied matters
Act, and;
 Is licenced as a telecommunications services operator in accordance with
the provision of the NCC Act.
The licensing framework of the NCC stipulates the following requirements:
(a.) Qualifications: Compliance with the relevant provisions of the Companies
andAllied Matters Act of the Federal Republic of Nigeria
(b.) Application: Obtain relevant form(s), at a cost of =N= 1,000 each, and
submit completed application form (s) with a non-refundable
administrative fee (5% of the applicable Licence fees). Other items
listed in the form are:
(i) Certificate of company’s incorporation
(ii) Certified True Copy of the Memorandum & Article of
Association.
(iii) Feasibility study on the service (in conformance with
Checklist in the form)
(iv) 3 passport photographs of the company’s representative (s)
(c.) Type Approval: Of equipment, where applicable, before commencement of
service.
(d.) Levies: 2.5% turnover, less interconnection charges, to be paid annually as
operating levies.
Nigeria represents a very viable business opportunity for investors into
the telecommunications market. There is free entry for new
participants in virtually all the undertakings of the sector. Market
potential is huge and growing, while investment hurdles are minimal
and business risks not unconventional. The current growth momentum
has been inspired by the Nigerian Communications Commission, and
strong demand for communications services by the populace.
Investors can shape the future of the nation by helping new and old
players to maximize service opportunities within telecommunications in
Nigeria.
Nigeria is receptive to any investment proposal that will take
advantage of the market size and appropriate technologies to reduce
the cost of implementation and provide excellent service.
Telecommunications business is one of the most viable sectors the
world over. Nigeria telecommunications industry is not an exception.
NITEL’s performance since inception shows that with a commercially
oriented management, telecommunication business in Nigeria is a
viable venture.
Advances in wired and wireless technologies are producing more costeffective solutions for providing rural access. Interestingly, Nigeria has
a high number of rural communities (about 84% of the population is
rurally based). This is an untapped opportunity and should serve as a
challenge to telecommunications investors especially now that the new
policy encourages the development of 20% of the operator’s network
capacity to the rural areas.
The necessary economic and political factors that would guarantee
profitable and secure investment have been made available in the
industry. Prominent among these are the new political dispensation
(democratic governance) and the stability of the exchange rate in
recent times. With this, Nigeria is fast emerging as one of the most
promising countries for private domestic and foreign investment in all
sectors of the economy including telecommunications.
For more Information Contact:

The Executive Secretary/CEO
Nigerian Investment Promotion Commission (NIPC)
Plot 1181 Aguiyi Ironsi Street
Maitama District - Abuja.
Website: www.nipc-nigeria.org
E-mail: [email protected]

The Executive Vice Chairman
Nigerian Telecommunications Communication (NCC)
Nigerian Communications Commission
Plot 72, Ahmadu Bello Way
Central Business District (Benue Plaza)
Abuja.
Web site: www.ncc.gov.ng