Investing in Agriculture, Solid Mineral,
Tourism & Energy Sectors


Without prejudice to government�€™s deregulation of the financial sector, banks have been enjoined to recognize the differences in the gestation periods within each category of agricultural loans ranging from 6 months to 10 years, for crops, livestock, fisheries, forestry and wild life.
In addition, the following incentives are also available;

· Companies in the agro-allied business do not have their capital allowance restricted to 60% but graduated in full - 100%;
· Agro-allied plant and equipment enjoy enhanced capital allowances of up to 50%.

Nigeria is richly endowed with a variety of solid minerals of various categories ranging from precious metals, stones and industrial minerals such as barites, gypsum, kaolin and marble.

The ministry of solid minerals has worked out a package of attractive incentives for potential investors in the solid minerals sector, including:

· 3 to 5 years tax holiday;
· Deferred royalty payments depending on the magnitude of the investment and strategic nature of the project;
· Possible capitalisation of expenditure on exploration and surveys;
· Provision of 100% foreign ownership of mining companies or concerns;

In addition to roll-over relief under the capital gains tax (CGT), companies replacing their plants and machinery are to enjoy a once-and-for-all 95% capital allowance in the first year with 5% retention value until the asset is disposed of, etc.

The tourism sector was accorded preferred sector status in 1991. This makes it qualify for such incentives as tax holidays, longer years of moratorium and import duty exemption on tourism related equipment; State governments are prepared to facilitate acquisition of land through the issuance of certificate of occupancy for the purpose of tourism development; 25% of income derived from tourists by hotels in convertible currencies are tax-exempt provided such income is put in a reserve fund to be utilized within 5 years for expansion or the construction of new hotels, conference centers, etc that are useful for tourism development.

All areas of investment in this sector are considered to be pioneer product or industry. As a result, there is a tax holiday of 5 to 7 years for investments in the sector.
There has been a deregulation of this sector resulting in the emergence of independent power producers (IPP) that have started operations in Nigeria. The National Electricity Regulation Commission has been set up based on the passage of the power reform act by the national assembly, which effectively liberalizes the power sector, to break the monopoly of nationally owned Power Holding Company of Nigeria (PHCN).

Licenses have been issued to several private power companies to build their power plants, and apart from some state governments, some oil majors have commissioned the IPP power plants, while some are under construction. Presently, power generated by IPPs is sold to PHCN. At the conclusion of the power sector reforms, private companies will own their distribution infrastructure.

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