The United States Department of State has warned American business executives about insecurity, corruption, port delays and the risk of detention during regulatory disputes in Nigeria, saying the challenges continue to undermine the country’s investment climate despite signs of economic stabilisation.
The warning was contained in the department’s 2026 Investment Climate Statements on Nigeria, released in Washington on Saturday, October 10, 2026, which assessed the impact of President Bola Tinubu’s economic reforms and identified persistent obstacles confronting foreign investors.
The report said security concerns remained a major factor discouraging investment, particularly in agriculture, mining and the oil industry.
“The security environment is a primary variable which gives pause to potential investors,” the report stated.
It noted that attacks on oil infrastructure in the Niger Delta had declined, but oil theft and illegal bunkering remained concerns.
In northern Nigeria, the report said the expansion of terrorist and bandit groups continued to affect the business environment for agribusiness and mining.
The US government also raised concerns about the treatment of foreign executives involved in regulatory disputes, citing the nearly eight-month detention of American citizen and Binance executive Tigran Gambaryan in 2024.
According to the report, such cases could influence foreign companies’ perceptions of Nigeria as a destination for investment.
The department also identified port inefficiencies as a major obstacle to trade, describing delays and administrative bottlenecks as a hidden cost for businesses.
“Port inefficiency remains a significant ‘hidden tax’ on investment,” it said.
The report noted that cargo dwell times at the Apapa and Tin Can Island ports in Lagos exceeded 20 days, partly because of manual examinations.
It said the Lekki Deep Seaport handled $9.6bn in trade in 2025 and operated at 50 per cent capacity, helping to ease pressure on older facilities.
The Federal Government launched the first phase of the National Single Window on March 27, 2026, to integrate trade-related agencies into a digital platform.
The initiative aims to reduce cargo dwell time to fewer than seven days and eliminate 80 per cent of manual paperwork by the end of 2026.
On capital inflows, the report said Nigeria recorded $21bn in capital importation in October 2025.
However, it noted that 92 per cent of the inflows represented foreign portfolio investment, which typically seeks short-term returns, while direct investment in physical infrastructure remained modest.
The department said US foreign direct investment in Nigeria reached $7.9bn by the end of 2024, representing a 25 per cent increase from the previous year.
Bilateral trade between both countries also reached $14.8bn in 2025, according to the report.
Despite acknowledging improvements in some economic indicators, the US government said Nigeria’s reforms had imposed significant costs on households.
“The fiscal correction came at a high social cost,” the report stated.
It linked the removal of fuel subsidies to a sharp increase in petrol prices and cited an estimated national poverty rate of 63 per cent in 2025, referencing an April 2026 World Bank report.
The report said Nigeria’s gross domestic product growth rose from 3.3 per cent in 2023 to 4.1 per cent in 2024 before easing to four per cent in 2025.
It also reported that the Central Bank of Nigeria’s foreign exchange reserves reached $50.45bn in February 2026, their highest level in 13 years.
On inflation, the department said the headline rate fell from 34.8 per cent in late 2024 to 15.15 per cent in December 2025, following the rebasing of the Consumer Price Index and subsequent methodological changes.
The report, however, identified corruption as a persistent challenge, particularly in port operations, where customs delays continue to affect trade.
“Corruption remains a systemic barrier, including at seaports where customs delays impede trade,” it said.
It also described Nigeria’s trade regime as somewhat protectionist, citing high tariffs and import restrictions intended to protect domestic industries.
The department acknowledged efforts by the Federal Government to improve regulatory predictability but said implementation remained uneven.
It further highlighted the transition from the Pioneer Status Incentive scheme to the Economic Development Tax Incentive, which took effect in January 2026, as an area requiring administrative adjustment for foreign businesses.
The report said Nigeria continued to permit full foreign ownership in most sectors, subject to restrictions and licensing requirements in certain industries.
It added that the Nigerian Investment Promotion Commission’s One-Stop Investment Centre coordinated 27 government agencies to help investors navigate administrative processes.
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