Nigeria’s fuel-subsidy removal and foreign-exchange liberalisation under President Bola Tinubu brought significant economic volatility and high costs for households, a U.S. Department of State report says. Petrol prices quintupled from 2023 levels, and an April 2026 World Bank report cited in the assessment estimated Nigeria’s national poverty rate at 63 percent in 2025. The same report examines what those conditions mean for foreign investors.
The cost paid at the bottom
“The fiscal correction came at a high social cost,” the U.S. department said. Its “2026 Investment Climate Statements on Nigeria” described the reforms as “painful but necessary,” while noting that indicators in early 2026 suggested some stabilisation. That balance sheet puts the costs to households beside the conditions facing businesses.
GDP growth rose from 3.3 percent in 2023 to 4.1 percent in 2024, then eased to four percent in 2025. The Central Bank of Nigeria reported foreign exchange reserves of $50.45 billion in February 2026, which the report called a 13-year peak. Headline inflation reached 34.8 percent in late 2024 before falling to 15.15 percent by December 2025 after officials rebased the Consumer Price Index and changed methods. Food inflation under the rebased index stood at 10.84 percent that December.
The report identifies insecurity as a major obstacle to investment. “The security environment is a primary variable which gives pause to potential investors,” it said. Attacks on oil infrastructure in the Niger Delta have decreased, but oil theft and illegal bunkering persist. In the North, the report said, the expansion of terrorist and “bandit” groups continues to degrade conditions for agribusiness and mining.
Detention, delays and the apparatus
The report points to the nearly eight-month detention in 2024 of Tigran Gambaryan, a U.S. citizen and Binance employee, as a warning about regulatory disputes. It said “the use of coercive exit bans and detentions” serves as “a cautionary note for foreign executives regarding the risks of aggressive regulatory friction.” The department said such cases could affect perceptions of Nigeria as an investment destination.
At the ports, the report calls inefficiency a “hidden tax” on investment. Cargo dwell times at Apapa and Tin Can Island exceed 20 days because of manual examinations. Lekki Deep Seaport handled $9.6 billion in trade in 2025 and operated at 50 percent capacity, helping ease pressure on older facilities. The report also describes corruption as a persistent barrier, including at ports where customs delays impede trade.
The government launched phase one of the National Single Window on March 27, 2026. The digital platform is intended to bring the Nigeria Customs Service, the National Agency for Food and Drug Administration and Control, and the Standards Organisation of Nigeria into one workflow. Its targets are to cut cargo dwell time to fewer than seven days and eliminate 80 percent of manual paperwork by the end of 2026. Those are targets, not reported outcomes.
Capital flows and promised fixes
Nigeria’s capital importation reached $21 billion in October 2025, but the report says 92 percent was foreign portfolio investment seeking high interest rates; foreign direct investment in physical infrastructure remained modest. U.S. foreign direct investment in Nigeria reached $7.9 billion by the end of 2024, up 25 percent from the previous year, while bilateral trade reached $14.8 billion in 2025.
Nigeria permits full foreign ownership in most sectors, subject to some industry restrictions and licensing requirements. The Nigerian Investment Promotion Commission’s One-Stop Investment Centre coordinates 27 government agencies to help investors navigate administrative processes. The report calls the trade regime “somewhat protectionist,” citing high tariffs and import restrictions, and says some companies must invest in local production to obtain permits and quotas to import the same products.
The government’s regulatory changes have met uneven implementation, the report says. It describes a “structural reset” intended to improve predictability and notes that the Economic Development Tax Incentive replaced the Pioneer Status Incentive scheme in January 2026, requiring administrative adjustment by foreign businesses. For households, meanwhile, the report’s own figures record the steep fuel-price rise and the poverty estimate left in its wake.