I books are welcome to my podcast the way I say it. My name
is Kalu Aja and on my podcast I'm talking money, the economy and finance.
This episode, I'd like to talk about the ease of doing business in
Nigeria, or should I say the unease of doing business in Nigeria as a
topic. I'm looking at the Handbook on Expatriate Quota Administration in Nigeria. It's
issued by the Ministry of Interior revised twenty twenty two in summery. Let me
give you some background. If you want to do business in Nigeria and you're
a foreigner or you're a Nigerian that's going to have a joint venture with foreigners,
then that business needs to be registered with the Nigerian Ministry of Interior.
To get that registration or the business permit, the missure of material requires this
is not requires that you have a paid up share capital of one hundred million
nira. Now this is paid or not authorized, which means you've got to
invest a hundred million naira into that company that you would like to use to
do business in Nigeria. Now, the value of equipment or machinery you import
into Nigeria for the purpose of this business could also form a part of the
paid up capital for your business. That's the rule. In addition, the
Ministry also requires that you should prove that you have a permanent owner operating premise
in Nigeria. So first of all, you've got to get a hundred million
ERA. Then you've got to bring that one hundred milliaris into the country with
certificate of capital importation. A bank has got to issue or letter confirming that
those funds actually came to Nigeria. Then you have to go get a permanent
operating premise. This is to do business in Nigeria. So the question really
is why do I need a hundred million ERA or why does every business that
wants to do business in Nigeria need a hundred millionaire paydoff. What if I
was an internet servicing company or a small firm for instance, What if I
want to do online education and I hooked up with say the New York instead
of Finance and together we want to set up this online training portal to train
Nigerian bankers in Nigeria. Do we need one hundred million for that? Even
if we're online? Do we need that? So you can see that the
requirements are very not just stringent, they are unnecessary and most importantly, they
cause Nigeria not to compete favorably with other jurisdictions that are also seeking capital as
foreign direct investments. Now, what if I don't have a hundred millionaire,
what would I do? Well, it's very easy. I'll go to the
US or even Rwanda and set up a company there. The US does not
require one hundred million Ira to set up a company in Delaware. They don't.
Rwanda also also require one hundred million. As a matter of fact,
eighty percent of Nigerian startups are now incorporated in the US's According to the US
government's official eighty percent of Nigeria startups incorporated in the US. Alarm bells should
be bring in the y a Nigerian youths of Nigerian companies leave in Nigeria to
go to the US to incorporate. But rather than alarm bells, we are
seeing bells or we're seeing eightym signs flashing as the measure of Interior wants to
make internal gentle revenue instead of worrying about foreign direct investments and guys, that's
where this is all going to This looks to me like a push for revenues,
intelligent revenues rather than foreign direct investments, which are more long term and
would be more beneful to Nigian economy in the long term. Why is Nigeria
doing this? Do we not know that we are competing not just with Ghana
and Ivory Coast and Rwanda, but where the US when our global village tried.
So capital is mobile and it can move to require a hundred million before
you set up in Nigeria if you are foreign participation is a big, big,
big hurdle and many Nigerians, as they are already indicating where they incorporate
their businesses, will simply not do it. So I think we need to
reave to go go back and look at this guideline. You should buy the
nijerm niush of interior and perhaps rescind or rework or perhaps make the capaid of
capital more attuned to the type of business you'd like to do in Nigeria and
not to blanket one hundred million. All right, guys, that's my take
for this episode. I hope you guys to join me next time when we
come on a podcast again. My name is Kalu and this is the way
I see it. Thank you so much for listening thake Care and by