The Abortive Third Republic

In early 1989, a constituent assembly completed work on a constitution for the Third Republic, and political activity again was permitted. In April 1990, mid-level officers tried and failed to overthrow Babangida, and 69 accused coup plotters were later executed after secret trials before military tribunals. In December 1990 the first stage of partisan elections was held at the local government level, followed by gubernatorial and state legislative elections in December 1991; elections were peaceful but turnout was low. However, Babangida canceled primaries scheduled for August and September 1992 due to fraud. All announced candidates were disqualified from again standing for president once a new election format was selected. After delayed promises for elections in 1990, the government finally held a presidential election on June 12, 1993.

In what most observers deemed to be Nigeria's fairest elections, early returns indicated that wealthy Yoruba businessman M.K.O. Abiola had won a decisive victory. But on June 23, Babangida, using several pending lawsuits as a pretense, annulled the election, throwing Nigeria into turmoil. More than 100 persons were killed in riots before Babangida agreed to hand power to an "interim government" on August 27. Babangida then attempted to renege on his decision. Without popular and military support, he was forced to hand over to Ernest Shonekan, a prominent nonpartisan businessman. Shonekan was to rule until new elections, slated for February 1994. Although he had led Babangida's Transitional Council since early 1993, Shonekan was unable to reverse Nigeria's ever-growing economic problems or to defuse lingering political tension.

With the country sliding into chaos, Defense Minister Sani Abacha quickly assumed power and forced Shonekan's "resignation" on November 17, 1993. Abacha dissolved all democratic political institutions and replaced elected governors with military officers. Abacha promised to return the government to civilian rule but refused to announce a timetable. Following the annulment of the June 12 election, the United States and other nations imposed various sanctions on Nigeria, including restrictions on travel by government officials and their families and suspension of arms sales and military assistance. Additional sanctions were imposed as a result of Nigeria's failure to gain full certification for its counter-narcotics efforts.

Although Abacha's takeover was initially welcomed by many Nigerians, disenchantment grew rapidly. Many opposition figures formed the "National Democratic Coalition (NADECO)" to campaign for an immediate return to civilian rule, and most Nigerians boycotted the May 1994 polls for delegates to a government-sponsored Constitutional Conference. On June 11, 1994, using the groundwork laid by NADECO, Abiola declared himself president and went into hiding. He reemerged and was promptly arrested on June 23. A series of strikes by petroleum workers and other unions initially brought economic life in Lagos and the southwest to a standstill, but by mid-August Abacha had dismissed the national union leadership, arrested his opponents, closed media houses, and moved strongly to curb dissent. In early 1995, Abacha alleged that some 40 military officers and civilians were engaged in a coup plot, including former head of state Obasanjo and his deputy, retired Gen. Shehu Musa Yar'Adua. After a secret tribunal, most of the accused were convicted, and several death sentences were handed down. The tribunal also charged, convicted, and sentenced prominent human rights activists, journalists, and others--including relatives of the coup suspects--for their alleged "anti-regime" activities.

In an October 1, 1995 address to the nation, Gen. Sani Abacha announced the timetable for a 3-year transition to civilian rule. Public turnout for his sham local elections in December 1997 and in April 1998 state assembly and gubernatorial elections was under 10%, and public reaction to Abacha's presidential nomination by the five accepted parties was apathy and a near-complete boycott. Widely expected to succeed himself as a civilian president on October 1, 1998, he remained head of state until his death on June 8 of that year. During the Abacha regime, the government continued to enforce its arbitrary authority through the federal security system--the military, the state security service, and the courts. Under Abacha, all branches of the security forces committed serious human rights abuses. Abacha was replaced by General Abdulsalami Abubakar, who subsequently released almost all known civilian political detainees and decreased the number of reported human rights abuses.

The Current Regulation on The Appointment of Foreign Directors

The promoters of business ventures in Nigeria are free to appoint directors of their choice, either foreign or Nigerian, and the directors may be resident or non-resident. The application to the NIPC must reflect the names of the proposed Nigerian and foreign directors (with an indication of resident and non-resident directors). The Business Permit Certificate consequently issued following such application usually reflects the respective names of the proprietors of the company, as well as the directors representing each proprietor or co-proprietor.

Payments of foreign directors’ fees, are remittable in the same manner as dividends accruing to the foreign company. However, since such fees are taxed at source (5% as a withholding tax), each foreign director’s fees are remittable subject to satisfactory evidence that the taxable amounts on such fees have been paid.

Pioneer Status (Tax Holiday) Advantages to a Company

The Industrial Development (Income Tax Relief) Act, Cap. 179 Laws of Nigeria, 1990, declares a number of industries as pioneer industries. Thus, any company whose products fall within the categorised industries could be conferred with Pioneer Status.

This designation is not necessarily a reflection that a company was pioneer per se in the industry, as several companies within the same pioneer industry classification could qualify for Pioneer Status. Where the activities of a company include the production of pioneer and non-pioneer products, the tax relief available on conferment of Pioneer Status would be restricted to income derived from

pioneer products only. Under the current industrial policy, conferment of Pioneer Status accords a company relief from income tax liability for a period of up to 5 years (tax-holiday status).

Finally, it should be noted that even if a company’s activities and/or products are classified within pioneer industries, the grant of Pioneer Status is not automatic. The criteria for granting Pioneer Status are related and/or based on the following considerations:-

(i) the amount of underlying capital investment in a company (N5 million and above) must be verifiable by physical inspection and supported by a report of the Industrial Inspectorate Division of the Federal Ministry of Industries, before a Pioneer Certificate is granted.

(ii) the socio-economic advantages of a company’s activities to the Nigerian economy as set out in its Feasibility Study is also an important consideration.

Without prejudice to these conditions, NIPC is empowered to confer Pioneer Status and other investment incentives, in any other deserving
circumstance as the Council of NIPC may approve.

Nigeria Profile

NIGERIA

Country Profile, The Land and People
Fact File

Area:
923,766 sq.km.

Population:
120 million (estimate)

Capital:
Abuja

Government:
Three-tier structure - A Federal Government, 36 State Governments, 774 Local Government Administrations

Official Language:
English

Main Indigenous Languages:
Hausa, Igbo, Yoruba

Main Religions:
Christianity, Islam, Traditional

Main Commercial/Industrial Cities:
Lagos, Onitsha, Kano, Ibadan, Port Harcourt, Aba, Maiduguri, Jos, Kaduna, Warri, Benin,Nnewi

Major Industrial Complexes:
Refineries and Petro-Chemicals: Kaduna, Warri, Port Harcourt, Eleme. Iron and Steel: Ajaokuta, Warri, Oshogbo, Katsina, Jos. Fertilizer: Onne- Port Harcourt, Kaduna, Minna, Kano Liquified Natural Gas : Bonny Aluminium Smelter: Ikot Abasi, Port Harcourt

Main Ports:
Lagos (Apapa, Tin-can Island), Warri, Port Harcourt, Onne Deep Sea and Hub Port, Calabar (EPZ)

Main Airports:
Lagos, Kano, Port Harcourt, Abuja, Enugu, Kaduna, Maiduguri, Ilorin, Jos, Owerri, Calabar, Yola, Sokoto

Road Network:
Over 15,000 km of intercity all weather paved roads, including dual carriage express trunks.

Railways:
2 main lines (South-West to North-East; South-East to North-West) inter-linked and terminatory at Lagos, Port Harcourt, Kaura Namoda, Maiduguri and Nguru. Major junctions at Kaduna, Kafanchan, Zaria. Gauge: 1067mm; Total length 3505 route km.

Energy:
Hydro-electric: Kainji, Jebba, Shiroro. Thermal and Gas: Egbin (Lagos), Ughelli, Afam, Sapele, National grid for electricity distribution; National pipeline network with regional depots for petroleum products distribution; National network (pipeline) for distribution of gas (under construction)