A report by the United States Department of State has identified insecurity, corruption, port inefficiencies and regulatory uncertainty as major obstacles to investment in Nigeria, warning that these challenges continue to weigh on the country’s business environment despite signs of macroeconomic stability.
In its ‘2026 Investment Climate Statements on Nigeria’, according to an online platform, the department said the country’s investment landscape has been shaped by the outcomes of “painful but necessary” structural reforms introduced by the President Bola Tinubu administration.
The report said the removal of fuel subsidies and liberalisation of the foreign exchange market initially triggered significant economic volatility, although indicators in early 2026 suggested some stabilisation.
However, it warned that security concerns, administrative bottlenecks and the social consequences of economic reforms remain significant considerations for foreign investors.
“The security environment is a primary variable which gives pause to potential investors,” the report said.
It noted that although attacks on oil infrastructure in the Niger Delta have decreased, oil theft and illegal bunkering persist.
“In the North, the expansion of terrorist and ‘bandit’ groups continues to degrade the climate for agribusiness and mining,” the document added.
The report also raised concerns about the treatment of foreign business executives in regulatory disputes, citing the detention of Tigran Gambaryan, a US citizen and Binance executive, for nearly eight months in 2024.
“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,” it said.
The report said such cases could influence the perception of Nigeria as a destination for foreign investment.
The department identified inefficiencies at Nigerian seaports as another major challenge for businesses, particularly those dependent on imports and exports.
“Port inefficiency remains a significant ‘hidden tax’ on investment,” the report said.
It noted that the Lekki Deep Seaport handled $9.6 billion in trade in 2025 and operated at 50 percent capacity, helping to ease pressure on older facilities.
However, it said traditional ports in Apapa and Tin Can Island continue to experience cargo dwell times exceeding 20 days because of manual examinations.
“To address this, the government launched phase one of the National Single Window (NSW) on March 27, 2026,” the report said.
The platform is designed to integrate trade agencies, including the Nigeria Customs Service, the National Agency for Food and Drug Administration and Control and the Standards Organisation of Nigeria, into a single digital workflow.
According to the report, the initiative targets a reduction in cargo dwell time to fewer than seven days and the elimination of 80 percent of manual paperwork by the end of 2026.
The report acknowledged an increase in capital inflows but said the figures did not necessarily reflect a corresponding surge in long-term investment in physical infrastructure.
“Nigeria’s capital importation reached $21 billion in October 2025, a large increase from 2024,” it said.
“However, 92 percent was made up of foreign portfolio investment (‘hot money’) seeking high interest rates, while actual foreign direct investment (FDI) in physical infrastructure remained modest.”
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