The Elements of Nigeria’s Indigenization Policy

Incorporated in 2005, Ambit Energy Corporation is a Canada-based oil and gas exploration and production enterprise focused on resources in the Niger Delta Basin in Nigeria. Ambit Energy Corporation’s work in Nigeria led the company to develop a business model and corporate structure based on the Nigerian Indigenization Policy.

Established in the early 1970s, Nigeria’s indigenization policy was created when significant economic and political nationalism led the state to impose regulations on the private sector. The Nigerian government developed the policy with a number of objectives, such as fostering opportunities for Nigerians, increasing the amount of domestically produced goods, and growing local profit retention.

With significant impacts on foreign direct investment, the indigenization policy restricted foreign investors’ access to certain markets, including basic manufacturing and advertising, while encouraging foreign investors to partner with local enterprises. The policy also required foreign businesses operating in Nigeria to sell company shares to Nigerians, with the minimum of company shares set at 40 percent. While the Nigerian Indigenization Policy is known to have yielded a variety of outcomes, some of the positive results were a stronger Nigerian stock market and an influx of Nigerian entrepreneurs.