By Seun Ibiyemi
Nigeria’s push to become a $1 trillion economy by 2030 is being hampered by declining foreign investment, even as the government implements sweeping macroeconomic reforms.
According to a recent report by the Bashir Adeniyi Centre for International Trade and Investment (BACITI) of the Nigerian Institute of International Affairs (NIIA), reforms such as exchange rate unification, removal of fuel subsidies, and improved trade facilitation have stabilized the economy.
However, foreign direct investment (FDI) has fallen sharply, from $3.31 billion in 2021 to $1.08 billion in 2024, raising concerns about Nigeria’s attractiveness to global investors.
“Institutional credibility, transparent governance, and consistent policies, not just fiscal incentives are key to rebuilding investor confidence,” the BACITI report states.
Currently, over 80 per cent of impact investments come from foreign development finance institutions, with domestic investors contributing less than 5 per cent.
While digital initiatives like the Nigeria Customs Service’s Unified Customs Management System (UCMS) have enhanced transparency and efficiency, operational bottlenecks persist.
Clearing goods at Nigerian ports takes an average of 19 days, compared to 7 in Ghana and 5 in Morocco, undermining investor confidence in trade facilitation.
Subnational economic hubs, particularly Lagos, are emerging as key drivers of investment.
Lagos alone contributes nearly 30 per cent of national GDP and over 70 per cent of non-oil exports, highlighting the potential of competitive federalism in attracting both domestic and foreign capital.
BACITI warns that Nigeria’s export dependence on crude oil (62.9%) and other primary commodities, alongside stagnant industrial growth, limits its appeal to investors seeking diversified, high-value opportunities.
Experts say achieving the $1 trillion goal will require annual growth of 15–19 per cent, driven by industrial deepening, value-chain integration, and consistent policy implementation.
The centre concludes that while Nigeria has made important strides in reform, foreign investment will only increase if reforms translate into tangible infrastructure, productive capacity, and institutional trust. “Reform can fix the rules, but only trust can mobilize investment,” BACITI said.