One of the primary drivers of economic growth and development in any country is foreign participation/ investment, Nigeria inclusive. Foreign investments in the Oil and gas sector and other various sectors, have significantly contributed to economic growth and boosted the country’s GDP.[1]

Foreign participation also known as alien participation, refers to the ability of foreigners to undertake or carry on a trade or business in a foreign country.[2] Most countries have their respective laws that govern and regulate the ability of foreigners to participate and carry on business in the country. The requirements for a foreigner or foreign-owned company to commence business operations in the oil and gas industry in Nigeria are as follows:[3]

1. Company Registration with the Corporate Affairs Commission (CAC): By the provision of Section 78 of CAMA, 2020, the first step to foreign participation in Nigeria is registering with the Corporate Affairs Commission (CAC).
2. Registration with the Nigerian Investment Promotion Commission (NIPC): Upon registration with the Corporate Affairs Commission (CAC), the company must register with the NIPC. Registration with the NIPC is a prerequisite for obtaining the relevant Permits and licenses from the Ministry of Interior.
3. Obtaining the relevant Business Permits, Resident Permits, Expatriate quotas, Work Permit and other licenses that may be required.
4. Certificate of Capital Importation (CCI) for equity or loan brought into Nigeria: Where a foreign company imports capital into the country to run its business, it must obtain a CCI from the CBN through commercial banks. CCI serves as statutory evidence of capital inflow/ investment into a Nigerian company.

The above steps must be complied with by foreign companies intending to carry on business in the Nigerian oil and gas sector. Whilst the Nigerian oil and gas sector continues to experience an inflow of foreign participation, it is imperative to note that legislative measures have been put in place to encourage more local participation in the sector. Accordingly, the Nigerian Oil and Gas Industry Content Development Act 2010 requires that Nigerian operators and indigenous service companies should be given first consideration in the award of oil blocks, licenses and works in the sector[4].  In addition, the Act requires that any operator bidding for any license, permit, or interest and before carrying on any project in the Nigerian Oil and gas industry, shall submit a Nigerian Content Plan to the Board demonstrating compliance with the Nigerian Content requirements of the Act[5]. To further increase and support indigenous participation in the oil and gas sector, the National Assembly is currently working on a Bill to repeal the Nigerian Oil and Gas Industry Content Development Act and enact the Nigerian Content Development and Enforcement Act[6].

Indeed, the economic benefits of foreign participation in the Nigerian oil and gas sector are enormous. However, it has become equally imperative for the Nigeria Government to protect and support indigenous participation in the sector.

RESOURCES

[1] Chinedu Ozor, An overview: Foreign participation in business in Nigeria at https://businessday.ng/opinion/article/an-overview-foreign-participation-in-business-in-nigeria/ assessed on May 19, 2021

[2] Ibid

[3] Olusola Jegede “Nigeria: Procedure for the Incorporation of Foreign Company in Nigeria” available at https://www.mondaq.com/nigeria/shareholders/972520/procedure-for-incorporation-of-foreign-company-in-nigeria ; assessed on May 17, 2021

[4] Section 3 of the Nigerian Oil and Gas Industry Content Development Act, 2009, available at https://www.ncdmb.gov.ng/images/GUIDELINES/NCACT.pdf , accessed on May 17, 2021.

[5] Section 7 of the Nigerian Oil and Gas Industry Content Development Act, 2009, available at https://www.ncdmb.gov.ng/images/GUIDELINES/NCACT.pdf , accessed on May 17, 2021.

[6] Further Africa; Aderonke Alex Adedipe; “Nigerian Oil and Gas; “Effects of Content development and Enforcement Bill on Foreign Participation” available at https://furtherafrica.com/2020/07/30/nigeria-oil-and-gas-effects-of-content-development-and-enforcement-bill-on-foreign-participation/;  accessed on May 17, 2021