THE IMPLICATION OF THE NIGERIAN ENTERPRISE PROMOTION DECREE OF 1972 TO THE ECONOMIC DEVELOPMENT OF NIGERIA

Business enterprises today are expected to meet standards of responsible business conduct that go beyond what had been expected traditionally. Although people more often than not still speak of business in terms of products, jobs, and profits, it is understood and accepted across the globe that a business enterprise remains a member of its community. The pursuit of profits and economic progress is not a license to ignore community’s expectations from business. Identify the various ways through which a business could add value to the community.

THE IMPLICATIONS OF THE NIGERIAN ENTERPRISE PROMOTION DECREE OF 1972 TO THE ECONOMIC DEVELOPMENT OF NIGERIA

The Nigerian Enterprises Promotion Decree or NEPC 1972 as amended in 1977 was meant to effect changes in the ownership structure of businesses in Nigeria and to provide opportunity for indigenous capital to have assertive control of the economy. The law also restricted economic activities of foreign firms to certain areas and obliged the firms to add Nigerians as partners. Up to 1,130 companies were affected, some companies transferred equity through private placement while others listed on the stock exchange. A total of 81 companies listed shares on the stock exchange worth a total value of 210 million naira while majority offered the shares through private placement.The modification provides for triple schedules of enterprises for better participation of Nigerians instead of the former double schedule.

Among these triple schedules are

1. Schedule One: This comprises of enterprises which are exclusively reserved for Nigerians. Nigerians reserved the right of participation and ownership of all the items which are exclusively in schedule 1 without any interference. Some of the items in schedule 1 are:
2. Advertising
3. Public relation business

iii. Assembling of radios, television

1. Bottling of alcohol drinks
2. Schedule Two: This comprises of enterprises in which Nigerians must have major interest at least 60% equity interest. And these include:
3. Banking
4. Commercial Banks
5. Merchants Banks

iii. Development Banks

1. Basic iron and steel manufacturing
2. Beer brewing
3. Clearing and forwarding agencies
4. Schedule Three: This comprises of enterprises in which Nigerian must have at least forty percent equity interest. Theseinclude:
5. Distilling and blending of spirits such as
6. Ethyl alcohol
7. Whiskey

iii. Brandy etc.

1. Fertilizer production
2. Manufacturing of basic industrial chemicals
3. Manufacturing of tobacco

The implications cannot be overemphasized these are:

1. Through the promulgation of the Indigenization decree: The lack of fund by local investors and the inability to raise loans from the foreign controlled financial institution were drastically alleviated by established of financial institutions specifically for this project.
2. The provision of the Decree: The essence of which is to give Nigerians increased involvement in the ownership control and management of the country’s productive enterprises, have brought a redistribution of income and increase in the employment of Nigerians in top and middle management positions.
3. The Nigerian enterprise Promotion Decrees promote indigenous participation in business undertakings and foster the growth of indigenous enterprises.
4. Through the capital issue commission sets up under the Decrees, prices of shares for companies were stabilized.

CONCLUSION

NEPC decree of 1972 was a legislation to effect changes in the ownership structure of light industries such as retail and small scale businesses. Industries were divided into two divisions called schedule 1 and schedule 2. Along with the decree was the establishment of the Nigerian Enterprises Promotion Board to manage the implementation of the new law. Following the spirit of the new law, the government acquired interest in major expatriate led banks within the country including First Bank of Nigeria and Union Bank of Nigeria and mandated a compulsory percentage of loans be made to Nigerians. The government also acquired interest in the insurance and oil and gas sectors. A new bank, the Nigerian bank of Commerce and Industry came into existence to facilitate loans to Nigerians for the purpose of investing in foreign owned firms.

REFERENCE

“Corruption a Delicate Subject.” Nigeria: Financial Times Survey. Financial Times, 30 Sept. 1980, p. XLII. The Financial Times Historical

Vincent, Ola (July 1979). “Using local resources to achieve increase in productivity”. Nigerian business digest. (Universal Publications) Lagos.

Valentine., Nde Fru, (2011). The international law on foreign investments and host economies in Sub-Saharan Africa : Cameroon, Nigeria, and Kenya. Berlin: Lit. p. 145. ISBN 9783643109743. OCLC 761742714.

The Political economy of Nigeria. New York, N.Y.: Praeger. 1983. ISBN 0030614767. OCLC 8929158