The United States Department of State has warned American businesses and investors about persistent insecurity, corruption, port inefficiencies and regulatory uncertainty in Nigeria, identifying the challenges as major obstacles to investment despite signs of economic stabilisation following reforms introduced by President Bola Tinubu’s administration.
The concerns were outlined in the department’s 2026 Investment Climate Statement on Nigeria, published in September 2026, which assesses the opportunities and risks facing American companies operating in or considering investment in the country.
Key Highlights
- The US Department of State identified insecurity, corruption and regulatory uncertainty as significant investment risks in Nigeria.
- Port delays at Apapa and Tin Can Island were highlighted as obstacles to trade and business operations.
- The report warned foreign executives about the risk of detention and travel restrictions arising from regulatory disputes.
- Lekki Deep Seaport handled a reported $9.6 billion in trade in 2025, while older ports continued to experience lengthy cargo delays.
- Nigeria’s National Single Window initiative aims to digitise trade procedures and reduce port clearance times.
- The report acknowledged economic reforms and signs of stabilisation but highlighted concerns over poverty and the composition of foreign investment.
US Identifies Insecurity as Major Investment Risk in Nigeria
The US Department of State described Nigeria’s security environment as a major consideration for prospective investors, warning that threats vary across different regions and economic sectors.
According to the report, attacks on oil infrastructure in the Niger Delta have declined, but crude oil theft and illegal bunkering remain concerns.
In northern Nigeria, the continued activities of terrorist groups and armed criminal gangs have created additional risks for businesses, particularly those involved in agriculture, mining and other activities requiring travel across remote areas.
The report also cautioned that road travel between some major northern cities can be hazardous, especially after dark.
These concerns reflect broader security challenges involving terrorism, kidnapping, violent crime and civil unrest, which can increase operating costs and complicate investment decisions.
For American companies considering Nigeria, the report underscores the importance of assessing location-specific security conditions before establishing operations or sending employees into the country.
Corruption Raises Business Costs and Uncertainty
Corruption was another major concern identified in the 2026 Investment Climate Statement.
The report highlighted opaque administrative processes, inconsistent enforcement and delays in government-related procedures as obstacles to doing business.
Seaport operations received particular attention, with customs-related delays identified as an example of how administrative inefficiencies can increase the cost of trade.
Although Nigeria has introduced anti-corruption measures and strengthened aspects of its financial regulatory framework, the report indicated that translating policies into consistent enforcement remains a challenge.
Nigeria’s removal from the Financial Action Task Force’s grey list in October 2025 marked progress in addressing deficiencies identified in its anti-money laundering and counter-terrorist financing framework. However, the US report maintained that broader governance and corruption concerns continue to affect the investment environment.
For businesses, such challenges can increase compliance expenses, delay transactions and make it harder to predict the time and cost required to complete commercial operations.
Port Delays Described as a Hidden Tax on Investment
The report identified inefficiencies at Nigerian seaports as a significant burden on importers, exporters and other businesses dependent on international trade.
It described port inefficiency as a “hidden tax” on investment because delays can increase shipping costs, storage charges, demurrage and the overall cost of moving goods.
According to the report, Lekki Deep Seaport handled approximately $9.6 billion in trade in 2025 and operated at about 50 per cent of its capacity.
However, traditional facilities at Apapa and Tin Can Island in Lagos continued to experience cargo dwell times exceeding 20 days, partly because of continued reliance on manual inspections and procedures.
Long clearance times can affect manufacturers waiting for imported inputs, retailers replenishing stock and exporters seeking to move goods to international markets.
The report also highlighted the Federal Government’s efforts to modernise trade administration through the National Single Window initiative.
Phase one of the initiative was launched on March 27, 2026, with the aim of connecting relevant agencies, including the Nigeria Customs Service, the National Agency for Food and Drug Administration and Control, and the Standards Organisation of Nigeria, through a more integrated digital process.
The initiative is intended to reduce paperwork, improve coordination and bring cargo clearance times below seven days. Achieving those targets will depend on effective implementation and cooperation among the agencies involved.
US Raises Concern Over Detention Risks for Foreign Executives
The US report also warned American executives about the possibility of regulatory disputes escalating into detention or restrictions on their movement.
It cited the 2024 detention of Tigran Gambaryan, a US citizen and Binance executive, as an example of the risks that can arise when foreign businesses become involved in disputes with Nigerian authorities.
Gambaryan was detained in Nigeria for nearly eight months amid a dispute involving the cryptocurrency exchange and Nigerian authorities.
The report cautioned that foreign executives could face detention or restrictions on leaving the country when a company comes under regulatory investigation or faces legal or tax-related disputes.
It also raised concerns about the use of exit restrictions as leverage in commercial and regulatory disagreements.
The warning is particularly relevant to international companies whose executives travel to Nigeria for negotiations, regulatory meetings or business development.
The report does not suggest that every foreign executive faces such an outcome. Rather, it identifies the possibility of coercive measures as a risk companies should consider when assessing their legal exposure and operating arrangements.
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Tinubu’s Economic Reforms and Nigeria’s Investment Outlook
The investment warning comes against the background of economic reforms introduced by President Tinubu, including petrol subsidy removal and changes to the foreign-exchange market.
The measures initially contributed to significant economic adjustments, including pressure on household purchasing power and increased costs for businesses. The US report nevertheless acknowledged signs of macroeconomic stabilisation.
According to the figures cited in the statement, Nigeria’s foreign reserves reached approximately $50.45 billion in February 2026, their highest level in 13 years.
GDP growth was around 4 per cent, while headline inflation was reported at 15.15 per cent in December 2025 under the rebased consumer price index. Food inflation stood at 10.84 per cent.
The report also cited capital importation of approximately $21 billion by October 2025, although about 92 per cent consisted of portfolio investment rather than longer-term foreign direct investment.
US foreign direct investment in Nigeria stood at a reported $7.9 billion at the end of 2024, while bilateral trade reached approximately $14.8 billion in 2025.
These figures indicate continued commercial ties between the two countries, but the composition of capital inflows remains important because portfolio investments and long-term direct investments have different implications for productive capacity and employment.
The report also highlighted the social costs associated with economic adjustment, citing a World Bank estimate that Nigeria’s poverty rate reached approximately 63 per cent in 2025.
US Acknowledges Nigeria’s Business-Facilitation Efforts
Despite the warnings, the investment statement recognised initiatives aimed at improving Nigeria’s business environment.
These include efforts by the Nigerian Investment Promotion Commission to simplify procedures through its One-Stop Investment Centre and the introduction of digital systems intended to improve trade administration.
Such initiatives could help reduce administrative delays and improve access to information for investors if they are implemented consistently.
However, the report indicated that improvements in economic indicators alone may not be sufficient to eliminate the structural problems confronting businesses.
Security risks, corruption, port congestion and unpredictable regulatory processes remain important considerations for companies assessing the costs and benefits of operating in Nigeria.
What the US Investment Warning Means for Nigeria
The 2026 Investment Climate Statement provides American companies with an assessment of Nigeria’s investment opportunities and the challenges they may encounter.
Its findings point to a business environment in which economic reforms and trade opportunities coexist with significant operational and governance risks.
For Nigeria, improving investor confidence will require sustained attention to security, transparent public administration, efficient port operations and predictable enforcement of laws and regulations.
The success of initiatives such as the National Single Window will also depend on whether they produce measurable improvements in cargo clearance times and reduce the cost of doing business.
While Nigeria continues to attract international commercial interest, the US assessment highlights the importance of addressing structural challenges if the country is to encourage more long-term investment and translate economic growth into broader improvements in living standards.
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