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Conditions for Doing Business in Niger

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Niger: flow of FDI in 2018 - 460,1 mln US Dollars (at current prices, UNCTAD)
FDI - Foreign Direct Invetsment

Africa Capacity Index (ACI) 2019
Since 2011, the African Capacity Building Foundation (ACBF – specialized agency of the AU, located in Harara, Zimbabwe https://www.acbf-pact.org/) publishes an annual Africa Capacity Report (ACR).
The ACR measures and examines the capacity of African countries to pursue their development agenda, focusing on key determinants and components of capacity for development. ACBF defines capacity as the “ability of people, organizations, and society as a whole to manage their affairs successfully” and capacity development as the process by which “people, organizations, and society as a whole unleash, strengthen, create, adapt, and maintain capacity over time.
Capacity of African countries, examined in ACR, is reflected by Africa Capacity Index (ACI). The ACI - is a composite index computed from a quantitative and qualitative assessment of four sub-indices or indicator “clusters” on a specially designed questionnaire. “The policy environment cluster” considers the conditions that must be in place to make transformational change and development possible. “The processes for implementation cluster” assesses the extent to which countries are prepared to deliver results and outcomes. “The development results at country level cluster” refers to tangible outputs that encourage development. And “the capacity development outcomes cluster” measures change in the human condition.
Niger ACI 2019 Rank 19 Score 53.8
Cluster 1 Policy environment for capacity development 88.2
Cluster 2 Processes for implementation 59.3
Cluster 3 Development results at country level 66.7
Cluster 4 Capacity development outcomes 32.1

Incentives and Guarantees for foreign investors
2011 ended well for Niger, with restoration of AGOA eligibility in October and the official start of oil production at the Zinder refinery in December. In addition, Niger attracted major investments in 2011, with the launch of Niamey Nyala, a multi-faceted program to rehabilitate the capital, the start of construction on both a new cement factory in Malbaza and on the Kandadji dam, and an agreement with a U.S. firm to build affordable housing over the next five years.
Following the April, 2011 restoration of democracy, Niger’s elected government announced its commitment to attracting private investors. Under the Investment Code, industrial investments enjoy tax and customs exemptions, and in some cases exemptions from value added tax (VAT). Other tax benefits are possible, but terms must be negotiated with the Ministry of Commerce and Private Sector Promotion on a case-by-case basis. Most investors benefit from special tax treatment and tariff protection for periods that vary with the level and location of investment. The Investment Code contains no provisions for screening, and guarantees equal treatment of investors regardless of nationality. Nigerien authorities have announced that the National Council of Private Investors (CNIP), which is charged with reviewing Niger’s investment climate and performance and proposing specific actions to address national investment priorities, will re-start activity soon.

The Guichet Unique or one-stop-shop, at the Chamber of Commerce is the first step for foreign investors interested doing business in Niger and qualifying for investment incentives. The Guichet Unique welcomes investors and can inform them of laws and regulations that govern investment, and enable them to fulfill the requirements for creating a business as expeditiously as possible. Within the Chamber of Commerce, there is also a division called Centre de Promotion des Investissements (CPI, Center for Investment Promotion) that welcomes, directs, advises, and assists national and foreign entrepreneurs/investors with a view to promoting private investment in Niger.
The Investment Code offers advantages to sectors the government of Niger deems key to economic development: energy production, mineral exploration and mining, agriculture, food processing, forestry, fishing, low-cost housing construction, handicrafts, hotels, schools, health centers, and transportation. Total foreign ownership is permitted in most sectors except energy, mineral resources, and sectors restricted for national security purposes. Foreign ownership of land is permitted, but requires authorization from the Ministry of Planning, Land Management, and Community Development.
Disincentives to investment include the limited domestic market, high transportation costs, and a slow and cumbersome government bureaucracy. Niger's low literacy rate and weak education system limit the availability of skilled labor and service providers. English is not widely spoken.

Conversion and Transfer Policies
As a member of the CFA, Communaute Financiere Africaine (“franc zone”) and the Economic Community of West African States (ECOWAS), Niger has benefited from a foreign exchange system that is free of restrictions on payments and transfers. Foreign capital and domestic capital are legally equal. Investments are not screened, and most sectors of the economy are open to foreign investment.

Dispute Settlement
While Niger’s laws protect property and commercial rights, the administration of justice can be slow and uneven. The Investment Code provides for settlement of disputes and indemnification by arbitration or by recourse to the World Bank’s International Center for Settlement of Disputes on Investment. However, investment dispute mechanisms in contracts are not always respected and due diligence is extremely important.

Niger has been a member of OHADA, the Organization for the Harmonization of Business Law in Africa (Organisation pour l’Harmonisation Afrique des Droits des Affaires) since 1995. The OHADA Treaty aims to harmonize business laws in sixteen African countries by adopting common rules adapted to their economies, by setting up appropriate judicial procedures, and by encouraging arbitration for the settlement of contractual disputes. OHADA Treaty regulations on business and commercial law include definition and classification of legal persons engaged in trade; procedures for credit and recovery of debts; means of enforcement; bankruptcy; receivership; and arbitration.

In 2009, the government of Niger created the Arbitration Center (Centre de Médiation et d’Arbitrage), which is charged with settling routine business disputes, and a Business Center (Centre de Gestion Agréée) for helping businesses transition from the informal sector to the formal sector.

Performance Requirements and Incentives
Performance requirements are not imposed as a condition for establishing, maintaining, or expanding foreign direct investments. Niger does offer incentives that increase as the size of the investment and number of jobs created increase. The Investment Code offers generous, VAT-inclusive tax exemptions, depending on the size of the business. Potential tax exemptions include start-up costs; property, industrial and commercial profits; services and materials required for production; and energy use. Exemption periods range from ten to fifteen years and include waivers of duties and license fees. Further advantages accrue to those investing in small-scale enterprise. There are no restrictions on foreign companies opening a local office in Niger, though they must obtain a business certificate from the Ministry of Commerce.

Niger has been a member of the WTO since 1996 and as such is committed to trade liberalization and opening its markets to foreign investments. Local products and traditional handicrafts of WAEMU origin enter duty free, together with a limited number of industrial products from producing enterprises approved by the WAEMU Commission. Niger’s AGOA eligibility was restored in 2011 after the restoration of democracy. Under the provisions of the African Growth and Opportunity Act (AGOA), most Nigerien non-textile and apparel exports may enter the United States duty free. In December 2003, it was determined that Niger qualified for textile and apparel benefits provided under AGOA.

Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish and own business enterprises. Private entities can freely establish, acquire, and dispose of interests in business enterprises. Legally established private-sector companies have the same access to markets, credit, and other business operations as do public enterprises (parastatals). As noted above, foreign ownership of land is permitted, but requires authorization from the Ministry of Planning, Land Management, and Community Development.

Protection of Property Rights
Niger is a member of the West African Intellectual Property Organization (Organisation Africaine de la Propriété Intellectuelle, OAPI), which sets the legal framework for protecting intellectual property and approves requests for registration. Protection is initially granted for ten years and is renewable for up to an additional ten years.
As a signatory to the 1983 Paris Convention for the Protection of Industrial Property, Niger provides national treatment under Nigerien patent and trademark laws to foreign businesses. Niger is also a member of the World Intellectual Property Organization (WIPO) and a signatory to the Universal Copyright Convention.

Niger’s judiciary system is understaffed and has lacked independence. Despite a legal regime that protect intellectual property rights, the government of Niger lacks the capacity and resources to enforce copyright violations, and counterfeits, such as CDs , videocassettes and pharmaceuticals, are readily available.

Transparency of Regulatory System
Investment approval should be within thirty days from the date of application but investors should be prepared for delays due to inter-ministerial approvals. While efforts continue to make the tax laws more transparent, investors find it useful to specify financial obligations, such as tax liability, in individual business agreements. It is important to seek qualified guidance to insure compliance with tax and labor regulations.

In March 2011, the Extractive Industry Transparency Initiative (EITI) designated Niger as “compliant.” In 2006, the government of Niger revised the Mining Code to offer specific incentives beyond those listed in the Investment Code: a five-year income tax holiday for large mines (two years for small mines) and exemption from customs duties on imported equipment for use in mineral exploration or mining operations. An updated Petroleum Code, based on international standards, was adopted in 2007.
A multi-sectoral regulatory agency (Agence de Régulation Multisectorielle, ARM) established in 2004 has oversight over telecommunications, water and electricity pricing.

Political Violence
Niger has suffered a series of coups, but they have not been affiliated with political violence and there has never been a civil war and there has been no damage to investments. Leaders of the most recent coup, in February 2010, restored democratic government within just over a year through a series of elections that ended in March 2011. The new government took office in April 2011 and has been committed to improving governance, implementing reforms, and supporting national reconciliation. President Mahamadou Issoufou, who had been an opposition leader for 20 years and had run for president in three past elections, won with 58% of the vote. He was inaugurated April 7 and named a Tuareg leader, Brigi Rafini, as Prime Minister, signaling a determination to work towards national reconciliation and better relations with the population of northern Niger.

There is a continuing threat of terrorist activity by al-Qaida in the Islamic Maghreb (AQIM), which claimed responsibility for the abduction of two French nationals from a restaurant in Niamey in January, 2011. Both were subsequently killed in the rescue attempt. The new government’s priorities include a strong commitment to confronting and defeating the security threats. There is concern that Boko Haram’s violent tactics may spill over from northern Nigeria, although there have been no attacks in Niger.

Corruption
Corruption in the executive and legislative branches is compounded by poorly financed and poorly trained law enforcement and weak administrative controls. Foreigners are advised not to pay bribes to policemen, customs officials, or other government officials. Bureaucratic processes can be slow, but this is often due more to inefficiency and lack of information technology than to corruption.

Foreign-Trade Zones/Free Ports
Niger is landlocked, has no free trade zones and relies on the Port of Cotonou as a primary seaport. Importers also use the ports of Lome and Tema. Delivery can take months due to delays at borders and internal control points along the route.

Bilateral Investment Agreements
Foreign investment in Niger has been predominantly French, but recently Chinese and other investors, including Indian, have shown interest.

OPIC (The Overseas Private Investment Corporation) and Other Investment Insurance Programs
Niger is eligible for OPIC coverage but OPIC has not been involved in any Niger investments to date. The Export-Import Bank (Ex-Im) has a number of programs geared towards helping sub-Saharan manufacturers expand their business by financing U.S. exports of manufacturing equipment and services. Niger is not a member of the Multilateral Investment Guarantee Agency (MIGA) but is a member of the Bourse Régionale des Valeurs Mobilières (BRVM), a regional stock market located in Abidjan, Cote d’Ivoire.

Foreign Direct Investment
The government of Niger considers foreign investment key to restoring economic growth and development. Official statistics show Niger's second largest trading partner, after France, to be Nigeria. Nigeria, however, is Niger's largest trading partner when informal trade is included. South and East Asian countries also provide food (rice from Thailand) and inexpensive manufactured goods (from China, India). Niger also has trade relations with Japan, Germany, Saudi Arabia, the Gulf States, the Netherlands, the United Kingdom, Ivory Coast, Ghana, and Benin.

http://www.state.gov/e/eb/rls/othr/ics/2012/191210.htm