(i) Stable macro-economic environment

(ii) Stable and reliable legal framework

(iii) Adequate physical infrastructure

(iv) Prudent fiscal regime

(v) Capacity building

(vi) Pass the necessary legislation on the implementation of SMEEIS to provide Tax Reforms

(vii) Make the bank’s contribution to the scheme enjoy 100% investment allowance

(viii) Reduce tax paid by SMEs to 10% (ix) Provide a 5-year tax holiday to the SMEs under the scheme Exempt divested funds under scheme from capital gains tax

THE CENTRAL BANK OF NIGERIA

(i) Ensure sound financial system

(ii) Liaise with the federal ministry of finance to ensure that the required incentives are granted.

(iii) Monitor the implementation and gather statistics to quality the impact of the scheme.

(iv) Articulate clear guidelines for the implementation of the scheme

(v) Liaise with SEC to facilitate and simplify the registration of venture capital operators

(vi) Ensure each bank’s compliance with the guidelines of the scheme

(vii) And penalise erring banks in accordance with the penalty stipulated for non-compliance

(viii) Capacity building

(ix) Disseminate information on the scheme to SMEs and the larger public

(x) Prepare annual progress report

(xi) Provide data for the review of the scheme after 5years by the banker’s committee.

(xii) Provide enabling environment, specifically, the development of the capital market Prohibition of certain imported items i.e. canned juice, ballpoint pens, pencils, flowers, containers, toothpaste, furniture, meat, bins, beef, detergents, hangers, bins, soaps, cups, pork products, ties, buckets, wheel barrows, men’s footwear, knives, spades, shovels, textiles, etc One of these measures is the creation of the Small and Medium Enterprises Development Agency of Nigeria(SMEDAN) which oversees the activities of the SMEs in Nigeria. Other measures are the repeal of anti-investment legislations especially the 1972 and 1978 Nigerian Enterprises Promotion Act, Public Sector Reforms, the creation of National Economic Empowerment Development Strategy(NEEDS) Infrastructure provision/rehabilitation in the areas of:

(i)Information Technology

(ii) Power generation, transmission, distribution and marketing

(iii) Tele communications

(iv) Road networks Protection of Domestic economy. Prohibition of certain imported items i.e. Canned juice, ballpoint pens, pencils, flowers, containers, toothpaste, furniture, hangers, goat meat, etc

Empowerment/streamline of approving/facilitating regulatory agencies:

(i) NIPC/Immigration service

(ii) Nigerian Port Reforms

(iii) CBN Autonomy- Macroeconomic consistency

(iv)Nigeria Bank of Industry

(i) Nigeria Agricultural, cooperative &Rural Development Bank

(ii) 10% of PBT by Commercial Banks for SMIEIS Fund Small & Medium Enterprises Development Agency of Nigeria(SMEDAN) Provision of incentives such as

(iii) Tax Holliday of 5-7 years for Agric and Agro Allied Industries

(iv) Agric loans from commercial Banks guaranteed up to 75%by the Nigerian Agricultural Provision of incentives such as;

(i)Tax Holliday of 5-7 years for Agric and Agro Allied Industries

(ii)Agric loans from commercial Banks guaranteed up to 75%by the Nigerian Agricultural Credit guarantee Scheme Credit guarantee Scheme (iii)Issuance of pioneer status Certificate by NIPC

(iv) Business permit (if the company has foreign equity participation)

(v)Conformity with approved list of pioneer activities

(i)Certificate of Incorporation with CAC & NIPC (if it has foreign equity participation)

(ii) Company not more than 1 year old from commencement of production

(iii)Availability of Initial Capital Allowance

•  Mining is 95%
• Plants for Agriculture is 95% (capital allowances for other sectors of the economy is between 50% to 90%)
• Corporate tax on dividend, interest and rent is 10%
• for royalties 15%
• and for management and Technical Agreements 10%

(i) Retention of export proceeds in foreign exchange

(ii) Freedom to open domiciliary A/Cs with any authorized Bank(if export commodities are manufactured in Nigeria)

(i) Existence of Duty Drawback Scheme for refunds of duties/surcharged on raw materials,imported to manufacture export goods,etc.

(ii) Existence of export Processing free Zones (EPZ)

(vii) Tax deductibles on expenditure on R&D

(viii) Tax concession on labour intensive mode of production

(viii) Tax deductible on expenditure on-in-plant training and utilization of local raw materials(implying trade balance in favour of China) In the final analyses it is worthy of note that: The total funds set aside by banks under the Scheme have continued to increase far ahead of investments made by banks Investments by 53banks in185 projects at April 2004 was 9.71b.This connotes 63.86% participation &44.00% by value of investments by banks.As at April 30,2004,a total of N22.29bwas set aside,N2.19b has been withdrawn from banks as uninvested funds under the Scheme.Of this amount N1.84b was invested in Nigerian treasury Bills on 11th March 2004