US Flags Corruption, Insecurity, Others Are Barriers To Investment In Nigeria

A report titled 2026 Investment Climate Statements by the United States Department of State has listed corruption, insecurity, cargo delays, and power sector deficits as major stumbling blocks to investments in Nigeria.

It warned that despite the current macroeconomic stability, the obstacles have continued to affect the nation’s business climate.

The report stated that the “painful but necessary” structural reforms introduced by President Bola Tinubu have influenced the investment environment.

“The total removal of fuel subsidies in October 2024 and the liberalization of the foreign exchange market initially triggered profound macroeconomic volatility, but early 2026 indicators suggest a fragile stabilisation,” it read in part.

It said that “corruption remains a systemic barrier, including at seaports where customs delays impede trade”.

According to the report, Nigeria’s security environment is a primary variable which “gives pause to potential investors, adding that while attacks on Niger Delta oil infrastructure have decreased, some theft and illegal bunkering persist.

“In the North, the expansion of terrorist and “bandit” groups continues to degrade the climate for agribusiness and mining,” it revealed.

“Furthermore, the use of coercive exit bans and detentions — highlighted by the high-profile nearly eight-month detention in 2024 of U.S. citizen Binance employee Tigran Gambaryan — serves as a cautionary note for foreign executives regarding the risks of aggressive regulatory friction.”

On customs and port operations, the report read, “Port inefficiency remains a significant “hidden tax” on investment. While the Lekki Deep Seaport, which opened in 2023, significantly eased pressure in 2025 — handling $9.6 billion in trade and operating at 50 percent capacity — traditional ports in Apapa and Tin Can still suffer from cargo dwell times exceeding 20 days due to manual examinations.

To address this, the government launched phase one of the National Single Window (NSW) on March 27, 2026. This platform is intended to integrate Nigeria’s trade agencies – Nigeria Customs Service, National Agency for Food and Drug Administration and Control (NAFDAC), and Standards Organisation of Nigeria (SON) – into a single digital workflow, with a target of reducing cargo dwell time to under seven days and eliminating 80 percent of manual paper-shuffling by year-end 2026.”

It, however, said that the Nigerian Investment Promotion Commission Act of 1995, as amended, continues to provide the legal framework for a liberalised foreign investment regime, granting foreign investors equal access to all financial instruments.

“In 2025, the Nigerian government successfully stabilised foreign exchange inflows through aggressive monetary tightening and the unification of exchange rate windows.

“The Nigerian Exchange Group (NGX), an integrated stock exchange group, has emerged as a globally competitive financing option, particularly as high domestic interest rates — driven by a Monetary Policy Rate (MPR) that reached 27.5 percent in 2024 before a slight reduction to 26.5 per cent in early 2026 — have made bank lending expensive,” the statement read.

“The NGX delivered very high returns in 2025, with the All-Share Index (ASI) surging 51.19 per cent to close at 155,613 points. As of December 31, 2025, total equity market capitalization reached approximately $71.7 billion, a historic high. This growth was supported by the passage of the ISA, which modernized market oversight and transitioned the exchange toward a T+2 (and occasionally T+1) settlement cycle.”