This might be the reason why Foreign Companies wouldn't invest in Nigeria

Have you ever heard of the indigenization decree of 1997? Probably not.

First, indigenization comes from the word indigene, which means to come from a place. In the economy of Nigeria, when we talk of indigenization we mean making companies owned by foreigners to become companies owned by Nigerians.

In 1972, under military government of General Yakubu Gowon a decree (law) was passed that for any company established by a foreigner in Nigeria, citizens of Nigeria must own at least 40% of the company. Then in 1977, the law was changed and it was passed that every company established in Nigeria by a foreigner, Nigerians must own 60% of the company. What this means is that if Mr. Lionel from abroad wants to establish a company in Nigeria, he will only own 40% of the company and he will sell 60% of the ownership to citizens of Nigeria either to one person or a group of persons. Even though it was Mr. Lionel that started the company and he is the one managing it, he still has to forfeit 60% of ownership to Nigerians. This implies that Mr. Lionel can only take 40% of any profit his company makes, the rest of the 60% of the profit will go to the Nigerians who own shares of the company. In other words, the indigenization decree makes companies established by foreigners in Nigeria to be owned mainly by Nigerians. Discussing this in Naira figure; if Mr. Lionel opens a company worth 1,000,000 Naira and starts a business in Nigeria. When the business has started, he must collect 60% of the 1,000,000 Naira which is 600,000 from Nigerians by selling shares of the company, so that Nigerians can now become part owners of the company, contributing the Major share. This also means that Nigerians will take the major share of the profit that comes to the firm. But remember, the business idea came from Mr. Lionel from abroad.

If you were a foreigner, will you agree to this deal?

What is your take on this Law, do you think it should be changed?