US Asks American Business Executives to Be Wary of Insecurity, Corruption, Detention Risk in Nigeria
Sunday Ehigiator 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
The United States Department of State has released a report highlighting several key issues that may deter American business executives from investing in Nigeria. According to the report, the country's investment landscape has been significantly impacted by challenges such as insecurity, corruption, inefficiencies in port operations, and regulatory uncertainty.
Despite recent efforts to stabilize the economy through structural reforms, the report warns that the security environment remains a significant concern for potential investors. While attacks on oil infrastructure in the Niger Delta have decreased, issues such as oil theft and illegal bunkering persist. Additionally, terrorist and bandit activities pose ongoing risks to businesses, particularly in the North where agribusiness and mining operations face heightened insecurity.
Furthermore, the report raises concerns about the treatment of foreign business executives in regulatory disputes, citing the example of Tigran Gambaryan, a US citizen and Binance executive, who was detained for nearly eight months in 2024. The high-profile detention highlights the risks associated with aggressive regulatory actions and could potentially influence perceptions of Nigeria as a destination for foreign investment.
Another major challenge highlighted in the report is the inefficiency of Nigerian seaports, which are identified as a "hidden tax" on investment. The Lekki Deep Seaport, while handling $9.6 billion in trade in 2025, operated at only 50 percent capacity, with cargo dwell times exceeding 20 days in traditional ports due to manual examinations.
To address these issues, the government launched phase one of the National Single Window initiative, aiming to streamline trade processes and reduce cargo dwell times. However, the report acknowledges that while capital inflows have increased to $21 billion in October 2025, a large portion is still foreign portfolio investment seeking high interest rates, rather than substantial foreign direct investment in physical infrastructure.
Despite permitting full foreign ownership in most sectors, the report notes that certain industries have restrictions and licensing requirements. The Nigerian Investment Promotion Commission's One-Stop Investment Centre facilitates investor navigation through administrative processes, though challenges remain. Overall, while Nigeria's economic reforms have improved some macroeconomic indicators, the report emphasizes that these reforms have imposed significant costs on households, leading to a national poverty rate of 63 percent in 2025.
Additionally, corruption and a somewhat protectionist trade regime are identified as persistent obstacles to investment.
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