Analysing the Investments Incentives in Nigeria's Consumer Goods Industry


Friday, December 06, 2019   /09:46 AM  / By Taiwo Oyedele* / Header Image Credit:Wall Street


Background and context

  • Consumer Goods Industry affects the lives of all Nigerians in a significant way on a daily basis.

  • The sector is a major employer and contributor to GDP as well as government revenue.

  • The need to diversify Nigeria's economy has led to a drive by the government to boost the consumer and industrial products industry by creating an enabling environment for investors.

  • The industry is hampered by low capacity utilisation induced by erratic power supply and other infrastructure deficits.

  • Other challenges include multiplicity of taxes, inconsistent trade policies, low aggregate demand, high cost of importing raw materials for production, among others.

  • Opportunities in this industry could be spurred by the recent border closure, which is expected to encourage domestic production and reduce the competition from imported products.

  • Also, the restriction of FX for certain products offers another potential opportunity for investment in the industry. Government initiatives at boosting the manufacturing sector include the Economic Recovery and Growth Plan (ERGP), which includes plans to grow small and medium scale manufacturing activities.


Incentives and Opportunities



  • Pioneer status
  • Free Trade Zones
  • 15% investment tax credit for replacement of obsolete plant and machinery
  • 10% investment allowance
  • Export incentives / EEG
  • Small businesses with turnover less than N25m to be exempted from Companies Income Tax
  • A lower CIT rate of 20% to apply to medium-sized companies with turnover between N25m and N100m



  • Large population
  • High propensity to consume
  • Excise duties on imported goods
  • AfCFTA
  • Technology and digital economy
  • Expansion/clarification of VAT exempt items
  • Introduction of VAT registration threshold
  • Cash basis for VAT remittance to FIRS


Disincentives and Challenges



  • High effective corporate income tax rates
  • Multiplicity of taxes and taxing agencies
  • Excess dividend tax
  • Commencement and cessation rules
  • Minimum tax
  • Restriction of input VAT on assets
  • Stamp duties on electronic transactions
  • Expanded definition of "Goods" and "Services"
  • Increase in VAT rate to 7.5%


Other challenges

  • Poverty - generally low purchasing power
  • Poor infrastructure
  • Low level of tax compliance & competitiveness
  • Ease of doing business
  • Inconsistent trade regulations and investment policies
  • VAT registration threshold (input VAT problem)
  • Taxes on rebates, discounts etc
  • Introduction of Thin Capitalisation Rules


Nigerians Are Dissatisfied With Public Services

Proshare Nigeria Pvt. Ltd.


And Frustrated With The Complex And Corrupt Tax Collection Process

Proshare Nigeria Pvt. Ltd.


The Top 3 Changes You Are Most Excited About

Proshare Nigeria Pvt. Ltd.


The Top 3 Changes You Most Disagree With

Proshare Nigeria Pvt. Ltd.


Given the need for government to raise revenue to cater for the various proposed reliefs, which 3 tax increase proposals do you support?

Proshare Nigeria Pvt. Ltd.


About The Author

Taiwo Oyedele is the Head of Tax and Corporate Advisory Services at PwC Nigeria. He has been in the forefront as a thought leader and prominent speaker on key accounting and tax issues including the tax implications of IFRS Adoption and Transfer Pricing. Taiwo writes articles in leading national newspapers, professional journals, international magazines and newsletters. He is a regular presenter and a highly sought after public speaker delivering over 200 speeches and presentations around the world in the past 3 years alone. Taiwo is the Head of PwC Tax Academy, Dean of the Direct Taxation Faculty of the Chartered Institute of Taxation of Nigeria, member of the Nigerian Taxation Standards Board and a member of the Taxation and Fiscal Policy Management Faculty Board of ICAN. He can be reached via   @taiwoyedele 


Proshare Nigeria Pvt. Ltd.

Related News On Consumer Goods

  1. NSE CEO Opening Remarks At The CEO Interactive Session For The Consumer Goods Sector
  2. Honourable Minister Niyi Adebayo's Speech At The NSE  CEO Interactive Session For The Consumer Goods Sector
  3. Consumer Goods Sector - NESTLE Tops on EPS as ENAMELWA Tops on PE Ratio
  4. Industry Leaders in Nigeria and Ghana Consumer Goods – Market Map
  5. H2 2018 Consumer Goods Outlook - Topline To Remain Volume Driven
  6. Consumer Goods Sector - GUINNESS Records Over 3,000 PE Ratio
  7. Nigerian Consumer Goods Sector - H1’17 Earnings Preview
  8. Consumer Goods Sector - NESTLE, CHAMPION and NB Record Over 1,000 PE Ratio
  9. Nigerian Consumer Goods Sector update: Subdued trends for a little while longer
  10. Key Reasons for downtrend in Banking and Consumer Goods Sub-Sectors
  11. Consumer Goods Sector Remains A Goldmine in 2014- Proshare
  12. MCNICHOLS & DANGSUGAR lead as patronage remains firm in the Consumer Goods Sector


Proshare Nigeria Pvt. Ltd.

Related News on Reviews and Outlooks

  1. 2020 Economic Outlook: Trade, Global Growth, and U.S. Political Shock Key Risk Factors in Forecast
  2. Moody's Changes Nigeria's Sovereign Ratings Outlook to Negative From Stable; Affirms The B2 Ratings
  3. Sub-Saharan Africa Sovereign Outlook Stable But Upward Debt Risk
  4. UK Banking Outlook Changes To Negative From Stable As Operating Environment Weakens
  5. Driving Growth in CG Sector: Insights and Outlook into Nigeria's Macroeconomic Environment
  6. NSE Interactive Session Explores The Role Of The Capital Market In Unlocking Consumer Goods Sector
  7. Regional Economic Outlook: Sub-Saharan African Navigating Uncertainty
  8. The Nigerian Economy: Outlook And Opportunities For Private Investors
  9. Q4 2019 Economic Outlook : A Less Threatening External Landscape
  10. Economic Associate's Conference on Nigeria's Economic Outlook, To Hold On Dec 12, 2019
  11. Fiscal Policy Easing Ahead in 2020 - Fitch
  12. 2020 Outlook: Unpredictable and Disruptive Political Environment Exacerbates Credit Challenges
  13. AGUSTO Releases 2019 Consumer Digital Banking Satisfaction Index Report
  14. Fitch Rates Access Bank's Tier 2 Subordinated Debt Final 'A(nga)'
  15. Moody's Assigns B2 Corporate Family Rating To Interswitch Limited; Outlook Stable
  16. African Competitiveness Lags In WEF Ranking
  17. A Rising Tide Lifts All Boat - H1 2019 Review And H2 Outlook
  18. H2 2019 Outlook: Fish or Cut Bait
  19. NSR H2 2019 (12) - Fixed Income - Will The CBN Give In To Liquidity Pressure?


Proshare Nigeria Pvt. Ltd.

Related News on Taxes and Tariffs

  1. Nigeria's Finance Bill 2019 Key Changes and Implications
  2. Why Nigeria Needs To Improve Its Ease of Tax Payments
  3. Finance Bill 2019 Compels Individuals to Produce Their TIN Before Operating Bank Accounts
  4. Custom Duty Collecting Bank - Celebrating Another First with FSDH Merchant Bank
  5. N275.12bn Generated As VAT In Q3 2019 - NBS
  6. House of Representatives Passes Finance Bill, 2019
  7. Government Reviews Stamp Duty Charge
  8. Tax Appeal Tribunal Delivers Landmark Decision on Threshold for Exported Service
  9. Finance Bill 2019: Tax Implications for Nigerian Entities
  10. Senate Passes Finance Bill, 2019
  11. FBNQuest Merchant Bank Obtains Approval for Customs Duties Collections In Nigeria
  12. Taxation Of On-Line Transactions - Implications On Domestic Revenue Mobilisation
  13. 2019 Finance Bill: 20 Sweeping Changes To Nigeria's Tax Laws That May Affect You
  14. TAT Judgement On Taxation Of Dividend Paid From Tax-Exempt Income
  15. The Key Changes In The 2019 Finance Bill - Focus on Taxation

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
Related News