FG, 6 states woo investors at ‘Invest in Lagos 3.0’ Summit

The "Invest in Lagos 3.0" Summit, featuring the Federal Government and six state governments, signals a concerted effort to attract both domestic and foreign investment into Nigeria's critical sectors. This article examines the legal and regulatory landscape underpinning such investment drives, focusing on key legislation like the Nigerian Investment Promotion Commission Act, the Investment and Securities Act 2025, and relevant Public-Private Partnership laws. It delves into the various incentives and guarantees offered to investors, alongside the procedural requirements and potential legal challenges, such as land tenure complexities and dispute resolution mechanisms. For legal practitioners, understanding these frameworks is crucial for advising clients on navigating Nigeria's evolving investment climate and leveraging opportunities presented by federal and sub-national initiatives.

Nigeria's economic landscape is currently experiencing a renewed push to attract significant investment, as evidenced by the recent "Invest in Lagos 3.0" Summit. This high-profile event, themed "Lagos: The Business Gateway to Africa," brought together representatives from the Presidency and governors of Lagos, Imo, Abia, Plateau, and Taraba states, all keen to showcase investment opportunities in critical sectors. The collaborative effort between the Federal Government and these states underscores a strategic national imperative to diversify the economy, enhance infrastructure, and stimulate growth through private capital.

For legal professionals advising potential investors, this summit highlights the dynamic interplay between federal and state investment policies and the need for a nuanced understanding of the legal and regulatory environment. While the promise of attractive returns and improved business conditions is compelling, successful investment hinges on navigating a complex web of statutes, regulations, and administrative procedures. This article will provide an overview of the pertinent legal frameworks, incentives, and potential challenges that attorneys must consider when guiding clients through Nigeria's investment terrain, particularly in the context of multi-level government engagement.

The legal framework governing investment in Nigeria is primarily anchored by several key statutes designed to promote and protect both domestic and foreign capital. Central among these is the Nigerian Investment Promotion Commission (NIPC) Act, Cap N117, Laws of the Federation of Nigeria (LFN) 2004, which established the NIPC as the primary agency for investment promotion and coordination. The NIPC Act liberalizes investment, allowing 100% foreign ownership in most sectors, and provides crucial guarantees against nationalization or expropriation without fair compensation, as well as the unrestricted transferability of funds. Complementing this is the Companies and Allied Matters Act (CAMA) 2020, which significantly reformed corporate governance and business registration processes, aiming to improve the ease of doing business and attract foreign investment.

Furthermore, the Investment and Securities Act (ISA) 2025, which recently replaced the ISA 2007, provides a comprehensive regulatory framework for the Nigerian capital market, covering securities, mergers, acquisitions, and collective investment schemes. This Act also empowers the Securities and Exchange Commission (SEC) as the chief regulator and has expanded its scope to include digital assets, enhancing investor protection and market transparency. At the sub-national level, states like Lagos have enacted their own legislation, such as the Lagos State Public Private Partnership Law 2011, to facilitate private sector participation in infrastructure development, reflecting a decentralized approach to attracting and managing investments.

Investors looking to channel funds into Nigeria must consider a range of legal mechanisms and incentives. The NIPC Act, for instance, provides for various investment incentives, including the Pioneer Status Incentive (PSI) under the Industrial Development (Income Tax Relief) Act, Cap 17 LFN 2004, which grants qualifying companies a tax holiday for a period of three to five years. More recently, the Nigeria Tax Act (NTA) 2025 introduced the Economic Development Tax Incentive (EDTI), replacing the PSI, to encourage investment in priority sectors. Other incentives include investment tax credits for local content, research and development, and rural investments, as well as benefits from double taxation treaties.

However, the legal landscape also presents certain complexities. The Land Use Act of 1978, for example, vests all land within a state in the Governor, who holds it in trust for the people. This means individuals and corporations can only hold rights of occupancy, typically for 99 years, and require the Governor's consent for any land transactions, which can be a time-consuming and expensive process. This centralized control and the potential for revocation of occupancy rights for public purposes, albeit with compensation, introduce a layer of risk that requires thorough due diligence.

Dispute resolution mechanisms are critical for investor confidence. The NIPC Act provides for amicable settlement of disputes between investors and the government, with arbitration serving as the main alternative. Nigeria is a signatory to the New York Convention and the International Centre for Settlement of Investment Disputes (ICSID) Convention, allowing for the enforcement of foreign arbitral awards and the application of ICSID Rules where there is disagreement on the method of dispute settlement. The Infrastructure Concession Regulatory Commission (ICRC) Act 2005 provides the principal legislation for regulating Public-Private Partnership (PPP) contracts involving Federal Government infrastructure projects, while states like Lagos have their own PPP laws and offices to streamline such arrangements.

Furthermore, the Companies and Allied Matters Act (CAMA) 2020 has introduced significant reforms aimed at simplifying business processes, enhancing corporate transparency, and strengthening shareholder protection, which are crucial for attracting foreign direct investment. These reforms include provisions for single-member companies, electronic filing systems, and virtual meetings, aligning Nigeria's corporate governance standards with international best practices. However, foreign companies intending to carry on business in Nigeria are generally required to incorporate a separate local company and obtain a business permit, with non-compliance voiding any acts of the foreign entity.

The "Invest in Lagos 3.0" Summit underscores Nigeria's proactive stance in attracting investment, with both federal and state governments presenting a unified front. For legal practitioners, this environment presents both significant opportunities and intricate challenges. Advising clients effectively requires a deep understanding of the NIPC Act, the ISA 2025, CAMA 2020, and the specific PPP frameworks at both federal and state levels. Particular attention must be paid to the nuances of the Land Use Act and the implications for property acquisition and security of tenure.

Attorneys should emphasize robust due diligence, meticulous contract drafting, and a clear understanding of dispute resolution avenues, including international arbitration. While the government's commitment to improving the ease of doing business and offering incentives is clear, navigating regulatory consistency across different tiers of government and ensuring effective enforcement of contracts remain paramount. Practitioners should closely monitor ongoing legislative reforms and policy shifts to provide up-to-date and strategic advice, positioning their clients to capitalize on Nigeria's vast investment potential while mitigating inherent risks.