Incentives and regulations

1

• Incentives and
  regulations
• for agribusiness investment
• presented by
• A.M. LAWAL
• Nigerian Export Promotion Council
• at the
• International Agribusiness Summit Expo
• Kwara Hotels Pavilion Limited, Ilorin
• July 28 30, 2009

2
Vision
Make the non-oil export sector a significant
contributor to Nigerias GDP.
Mission
We facilitate opportunities for exporters
promote sustainable economic development.
3
Core Responsibilities

• To promote the development and diversification of
  Nigerians export trade
• To assist in promoting the development of export
  related industries in Nigeria
• To spearhead the creation of appropriate export
  incentives and
• To actively articulate and promote the
  implementation of export polices and programs of
  the Nigerian Government

4
The Role of NEPC

• NEPCs role is 4-pronged in nature

5
Sectoral Contribution to GDP

• Agriculture 42.07
• Manufacturing 4.13
• Solid minerals 0.31
• Telecom/postal services 2.90
• Finance insurance 3.79
• Building construction 1.83
• Hotel and restaurant 0.46
• Whole sale and retail trade 17.3
• Crude petroleum natural gas 17.54
• Others 9.63

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Non Oil Export in 2007
7
Non Oil Export in 2008
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An Overview Of Agric Dev. in Africa

• FAO survey indicates that
• Food security and rural development, would be the
  engine for economic growth in Africa.
• 36 global hunger hotspots, 23 are in Africa.
• 70 of Africans work in agriculture sector.
• Annual aid to agriculture, which currently stands
  at 4 billion dollars, is a pittance compared to
  the 125 billion dollars that rich countries gave
  their farmers in 2006

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Government Agric Policy Objectives

• Attainment of food security through increases
• in food production and improvement in
• distribution
• Increasing production of food and industrial
• crops in areas of comparative advantage
• Regaining competitive edge and recapturing
• market share for major export crops

Continues on the next slide
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Government Agric Policy Objectives

• Diversification of the agricultural production
• base into non-traditional crops (
  Horticulture,
• Medicinal Herbs, etc )
• Improving land management practices and
• protection of land resources from environmental
  
• degradation
• Creating an enabling environment for faster
• private-sector led agricultural growth.

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Federal Government Agric. Initiatives

• Co-operatives 1935-Date
• Commodity Boards 1947-1986
• Agric Research Institutes 1964-Date
• National Accelerated food Programme 1970s
• Nigeria Agric Co-operative Bank 1973-Date
• Operation Feed the Nation 1976-1979

Continues on the next slide
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Federal Government Agric. Initiatives

• River Basin Development Authority 1977-Date
• DFRRI 1986-1993
• NALDA 1991-1999
• Presidential Initiatives on Cocoa, Rice
• Cassava, Livestock, Fisheries,
  Vegetables 1999-2007
• National Food Security Programme 2008-date

SOURCE NATIONAL FOOD RESERVE AGENCY
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Federal Government Policy thrusts of the
National Food Security Programme

• Import substitution
• Substantial Food Security
• Promotion of modern Agricultural Practices and
  Agro Processing
• Natural Resources Conservation

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Policy Interventions

• Enhance productivity of small holder agriculture
• Create an environment conducive to private
  investment
• Make trade work for the poor by enhancing
  domestic
• competitiveness through policy and
  institutional reforms
• Coordinate domestic and international resources
  for
• agriculture and rural development policy

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Natural Agricultural Resources

• Arable Land of 68million ha
• Cultivable Agricultural land under cultivation
  less than
• 50
• Water Surface of 266.7 bn sqm
• Peasant farmers cultivate over 90 of the land
• Under ground water 57.9 bn sqm
• Irrigable Land 3.14 million
• Irrigable land under irrigation 220,000 ha

Continues on the next slide
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Natural Agricultural Resources

• There are 12 River Basin Development Authorities
• across the country to support crop irrigation
  all season
• Rainfall between 300mm 4000mm per annum

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Why Invest in Agriculture

• Agriculture employed more than 70 of the
  labour
• force.
• Agriculture and Agro-processing are ripe in
  Nigeria
• for investment which has been neglected for
  so long.
• Funds for Agricultural developments yields 4
  times
• the returns prevalent in other sector.
• Huge market of 150 million population.
• Availability of Air link network for freshable
  Agric produce
• within the ECOWAS Sub Region and Major
  European market.
• Proximity to the traditional and terminal
  European market.

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Why Invest in Nigeria

• Skilled and Low Cost Labour
• There is an abundance of skilled labour at an
  economic
• cost, resulting in production costs, which are
  among
• the lowest in Africa.
• Infrastructure
• Development of physical and industrial
  infrastructure,
• in terms of transportation, communications,
• electricity and water supply.

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Agricultural Incentives

• The provision of subsidies to domestic firms is
  an important policy goal for many governments
  around the world.
• Tractor hiring services
• Fertilizer subsidy
• Extension services
• River Basin Development Authorities
• NARCDB
• Research Institutes

Continues on the next slide
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Agricultural Incentives

• Syndicated  special funds at very low interest
  rates,
• long term moratorium and repayment period for
  rice
• processing and marketing worth N10 billion.
• Export Expansion Grant (EEG) administered by the
  NEPC
• provides support to the development and
  promotion of Agric
• sector. Over 70 of the EEG goes to the sector.

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Export Processing Zones Incentives

• Incentives Locating in any Free Zone in Nigeria
• automatically confers upon the investor certain
  
• advantages, benefits and incentives which have
  been
• strategically designed by the Federal
  Government of
• Nigeria to create a business-friendly
  environment for
• the investor and to be competitive.
• These incentives, established by Act No. 63 of
  1992 and
• which have been improved even more in
  subsequent
• legislation, are the following

Continues on the next slide
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Export Processing Zones Incentives

• Complete tax holiday for all Federal, State and
  Local
• Government taxes, rates, customs duties and
  levies.
• One-stop approvals for all permits, operating
  
• licenses and incorporation papers.
• Duty-free, tax-free import of raw materials and
• components for goods destined for re-export.
• Duty-free introduction of capital goods,
  consumer
• goods, machinery, equipment, and   furniture.

Continues on the next slide
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Export Processing Zones Incentives

• Permission to sell 100 of manufactured,
  assembled
• or imported goods into the domestic Nigeria
  market.
• When selling into the domestic market, the amount
  
• of import duty on goods manufactured in the
  Free
• Zone is calculated only on the basis of the
  value of
• the raw materials or components used in
  assembly
• not on the finished products.
• 100 foreign ownership of investments.

Continues on the next slide
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Export Processing Zones Incentives

• 100 foreign ownership of investments.
• 100 repatriation of capital, profits and
  dividends
• Waiver of all import and export licenses
• Waiver on all expatriate quotas for companies
• operating in the zones.
• Prohibition of strikes and lockouts
• Rent-free land during the first 6 months of
• construction

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AGRICULTURAL INFRASTRUCTURAL DEVELOPMENT, A
CASE OF HADEJIA-JAMAARE RIVER BASIN DEVELOPMENT
AUTHOURITY
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Features of the Tiga Dam
SourceHJRRBDA
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Main Tiga Dam
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Head of Dam
Where journey starts to irrigate farms
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Valve stations on the main feeder channel
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Cold store
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Farmland sites
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Commercial farming Infrastructure
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• AGRICULTURAL INVESTMENT INITIATIVES BY NEPC

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Development of Horticulture for Export
In an effort to have a share of the US5billion
global market in the Floriculture industry, the
Council in collaboration with a private sector,
incorporated a company for the production of
flowers and vegetables in Jos, Plateau state
under the Public Private Partnership
Continues on the next slide
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Development of Horticulture for Export

• NEPC has made an investment of N65 million and to
  
• provide a grant of N35 million with the
  private
• partners investing N210 million.
• 15 containers of Greenhouse equipments have
  arrived
• in preparation for the production of
  cut-flowers and
• vegetables for both domestic and international
  market
• Production to commence by Q1 of 2010.

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Impact of the Project

• Accessing the US5billion market size from zero
  level
• Create new employment ( 150 )
• Generate foreign exchange earnings through
  exports
• Attract new investment in the sector

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Project in Focus
Continues on the next slide
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Project in Focus
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Horticultural Produce
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Local Vegetables/Fruits Retail Market
A typical fruits and Vegetables Market under the
Maximum Outside Temperature
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Agricultural Produce Packaging
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Yam exports
20/40 CTN x 25kg per pallet for shipment to UK by
Sea
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Investment Incentives

• While some of these incentives cover all sectors,
  other
• are limited to some specific sectors.
• COMPANIES INCOME TAX
• The Companies Income Tax Act has been amended in
  order to encourage potential and existing
  investors and entrepreneurs. The current rate in
  all sectors, except for petroleum, is 30 percent.
  The is likely to come down.

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Investment Incentives

• (ii) PIONEER STATUS
• The grant of Pioneer Status to an industry is
  aimed at enabling the industry concerned to make
  a reasonable level of profit within its formative
  years. The profit so made is expected to be
  ploughed back into the business.

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Investment Opportunities (Agriculture)

• Priority areas include
• All aspects of direct Agricultural production,
  but in particular tree Crops like Rubber, Palm
  Oil, Cocoa Plantation, Fish production and
  Forestry
• Processing of Agricultural produce and storage
  facilities
• Development of Seeds industry to support the
  growing needs of farmers.

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AREAS FOR INVESTMENT IN THE AGRIC SECTOR

• POULTRY INDUSTRY
• FABRICATION OF MACHINES AND EQUIPMENT
• HORTICULTURE SECTOR FOR EXPORT
• TREE CROPS PLANTATION
• LIVESTOCK
• FISHERIES AND SEA FOODS
• PACKING AND PACKAGING
• SEEDS
• ORGANIC FERTILISER AND PRODUCE

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Investment Opportunities (Agriculture)

• Efforts are daily being expended on revitalizing
  the
• agricultural sector to cater for both the local
  and export
• market.
•  

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Challenges
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Challenges that provides Investment opportunities

• Improved yield
• value addition,
• Modern and structured markets,
• Access and affordability of credit.
• Policy inconsistence
• Inadequate supply of farm inputs ( fertiliser,
  improved
• seeds/seedlings etc
• Inadequate mechanization
• Inadequate infrastructure.
• Dependent on imported Seeds

Continues on the next slide
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