The U.S. Department of State says Nigeria’s economic reforms have improved some macroeconomic indicators, but households have paid heavily: petrol prices have quintupled from 2023 levels, and the national poverty rate is estimated at 63 percent in 2025. In its warning to American business executives, the department identifies insecurity, corruption, port delays and regulatory uncertainty as major obstacles to investment.
Reforms and their costs
The department’s “2026 Investment Climate Statements on Nigeria” says investment conditions have been shaped by “painful but necessary” structural reforms introduced by the President Bola Tinubu administration. Removing fuel subsidies and liberalising the foreign exchange market initially caused significant economic volatility. Some indicators suggested stabilisation in early 2026, but the report says the social consequences remain a significant consideration for foreign investors.
“The fiscal correction came at a high social cost,” the report said. It linked the removal of fuel subsidies to petrol prices that “quintuple from 2023 levels” and cited an April 2026 World Bank report for the 63 percent poverty estimate in 2025.
Nigeria’s GDP growth rose from 3.3 percent in 2023 to 4.1 percent in 2024, then eased to four percent in 2025. According to the report, the Central Bank of Nigeria reported foreign exchange reserves of $50.45 billion in February 2026, a 13-year peak. Headline inflation reached 34.8 percent in late 2024 before falling to 15.15 percent by December 2025, following the rebasing of the Consumer Price Index and subsequent methodological changes. Food inflation stood at 10.84 percent that December under the rebased index.
Security, enforcement and trade
“The security environment is a primary variable which gives pause to potential investors,” the report said. Attacks on oil infrastructure in the Niger Delta have decreased, while oil theft and illegal bunkering persist. In the North, the expansion of terrorist and “bandit” groups continues to harm prospects for agribusiness and mining, it said.
The report also points to the nearly eight-month detention in 2024 of Tigran Gambaryan, a U.S. citizen and Binance employee, during a regulatory dispute. “The use of coercive exit bans and detentions,” it says, serves as a cautionary note for foreign executives and could affect perceptions of Nigeria as an investment destination.
Port delays directly cost companies that rely on imports and exports. “Port inefficiency remains a significant ‘hidden tax’ on investment,” the report said. At Apapa and Tin Can Island, cargo dwell times exceed 20 days because officials conduct 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.
Investment and government coordination
The government launched phase one of the National Single Window on March 27, 2026. The 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 digital workflow. It aims to cut cargo dwell time to fewer than seven days and eliminate 80 percent of manual paperwork by the end of 2026.
Nigeria’s capital importation reached $21 billion in October 2025, but the report says that increase didn’t necessarily mean a corresponding rise in long-term physical-infrastructure investment. It says 92 percent was foreign portfolio investment seeking high interest rates, while actual foreign direct investment in physical infrastructure remained modest.
The report says Nigeria permits full foreign ownership in most sectors, subject to restrictions and licensing requirements in some industries. The Nigerian Investment Promotion Commission’s One-Stop Investment Centre coordinates 27 government agencies to help investors navigate administrative processes. U.S. foreign direct investment reached $7.9 billion by the end of 2024, up 25 percent from the previous year, while bilateral trade between the United States and Nigeria reached $14.8 billion in 2025.
The department calls the trade regime “somewhat protectionist,” citing high tariffs and import restrictions intended to protect domestic industries. Some companies must invest in local production to obtain permits and quotas to import the same products. Regulatory implementation remains uneven, the report says, including adjustments required after the Economic Development Tax Incentive replaced the Pioneer Status Incentive scheme in January 2026.