VII.  INVESTMENT CLIMATE

A June 1992 survey of U.S. companies in Nigeria put total U.S.
investment at USD 3.9 billion, all but USD 88 million of which
was invested in the petroleum sector.  Other sectors with
substantial U.S. investment include manufacturing, pharmaceuti-
cals, food processing, agribusiness, and banking.  Nigeria offers
potential investors a relatively low-cost labor pool, abundant
natural resources, and the largest domestic market in Sub-Sahara
Africa.  These advantages must be weighed against Nigeria's
inadequate and poorly maintained infrastructure, increasing labor
problems, complicated and inconsistent regulatory environment,
and the importance of personal ties in doing business.  This
means that considerably more time, money, and managerial effort
than may be customary in than other developing countries must be
expended in Nigeria to begin operating and earning profits.

Nigeria's regulatory regime is confusing, and often seems hostile
to new investors.  It is difficult, for example, to find informa-
tion on obtaining the various official approvals needed to begin
doing business.  The Government's industrial policy stipulates
that foreigners must secure approval from the Industrial
Development Coordination Committee, (IDCC, part of the Ministry
of Finance), if they wish to invest in Nigeria and remit divi-
dends.  Approval can take as long as six to eighteen months, and
in the  cases of some major projects, approval processes can and
have taken years.  IDCC practices are governed by the Nigerian
Enterprises Promotion decree, which is the primary law governing
foreign investment.  The decree bars foreign majority ownership
in 40 types of companies unless the foreign individual or company
provides an initial investment of at least 20 million Naira, the
equivalent of USD 400,000 as of March 1994.  The four exceptions
to this are banking, insurance, petroleum and mining which
require at least 60% Nigerian equity.

In an effort to attract foreign investment, the Nigerian
Government is developing an export processing zone near the city
of Calabar in Eastern Nigeria.  If the zone is completed as
planned, it will allow investors duty-free importation of raw
materials and semi-finished products for manufacture and export.
(See section VIII). As in other parts of the country, however,
infrastructure problems are expected to pose serious limitations.

The following enterprises have been classified as scheduled
businesses exclusively reserved for 100 percent Nigerian
ownership:

1.  Advertising and public relations
2.  All aspects of pool battling business and lotteries
3.  Assembly of radios, radiograms, record changers, television
    sets, tape recorders and other electrical domestic appliances
    not combined with the manufacture of components
4.  Blending and bottling of alcholic drinks
5.  Block and ordinary tile manufacture for construction
6.  Bread and cake making
7.  Candle manufacturing
8.  Casinos and gaming centers
9.  Cinemas and other places of entertainment
10. Commercial transportation (wet and dry cargo and fuel)
11. Commission agents
12. Department stores and supermarkets having an annual turnover
    of less than 2,000,000 Naira
13. Distribution agencies excluding motor vehicles, machines and
    equipment and spare parts
14. Electrical repair shops other than repair shops associated
    with distribution of electrical goods
15. Estate Agency
16. Film distribution (including cinema films)
17. Hairdressing
18. Ice-cream making when not associated with the manufacture of
    other dairy products
19. Laundry and dry-cleaning
20. Manufacturers' representatives
21. Manufacture of suitcases, brief cases, hand-bags, purses,
    wallets, portfolios and shopping bags
22. Municipal bus services and taxis
23. Newspaper publishing and printing
24. Office cleaning
25. Passenger bus services of any kind
26. Poultry farming
27. Printing of stationery (when not associated with the printing
    of books)
28. Protective agencies
29. Radio and television broadcasting
30. Retail trade (except by or within departmental stores and
    supermarkets)
31. Singlet manufacture (men's undershirts)
32. Stevedoring and shorehandling
33. Tire retreading
34. Travel agencies
35. Wholesale distribution of local manufacturers and other
    locally produced goods
36. Establishments specialized in the repair of watches, clocks
    and jewelry including imitation jewelry
37. Manufacture of jewelry and related articles including
    imitation jewelry
38. Garment manufacturing
39. Grain mill products including rice milling
40. A few minor, miscellaneous categories