What Can Nigeria Do to Attract Sustainable Foreign Capital?

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Nigeria’s recent rise in foreign inflows has revived hopes that the country can once again become a major destination for long-term investment. The Central Bank of Nigeria (CBN) reports that foreign capital reached $20.98 billion in the first ten months of 2025. This is up 70 percent from the whole of 2024 and more than quadruple 2023 levels. Yet beneath these positive numbers, investors say Nigeria must still fix persistent structural problems if it wants consistent capital that actually stays.

Nigeria might, for example, look to countries in the Gulf where foreign capital remains more consistent. Qatar, in particular, has built a reputation for steady economic expansion driven by long-term planning, rapid infrastructure upgrades and strong foreign participation in sectors such as energy, logistics and finance. While some markets remain largely untapped, such as gambling, locals can explore where to play in Qatar to find safe platforms creating a circular financial system with foreign money being both invested in and spent out of the small peninsula.

Much of Nigeria’s recent capital surge reflects improvements in the foreign-exchange system. The CBN unified multiple FX windows in early 2024 and introduced the Electronic Foreign Exchange Matching System, lifting daily market turnover substantially. Clearing the long-standing $7 billion FX backlog removed a major psychological barrier for foreign companies that previously feared they could not repatriate profits. Furthermore, Nigeria’s removal from the FATF grey list in 2025 reduced compliance hurdles and signalled better anti-money-laundering standards – an important condition for large institutional funds.

However, significant risks remain. The naira still depreciated 40.9 percent in 2024, and the gap between the official exchange rate (around N1,535 per dollar) and the parallel market rate (near N1,660) shows that confidence in currency stability is not yet fully restored.

Security also weighs heavily on investor decisions. Persistent violence in farming regions, oil theft in the Niger Delta and kidnappings along major transport routes raise operational costs for companies. Travel restrictions, high insurance premiums and the risk of supply-chain disruption all lead foreign investors to assign a higher “risk premium” to projects in Nigeria. A clear improvement in safety would have an immediate positive impact on investment sentiment.

Power supply is another major concern. Although generation briefly reached record highs in 2025, effective available capacity remains far below what a country of more than 200 million people requires. Manufacturers, data centres and agro-processors still rely heavily on diesel generators, pushing production costs far above those in peer economies. Without a credible plan for grid upgrades, cost-reflective tariffs and space for private renewable projects, large-scale, long-term investment will stay limited.

Governance concerns also shape investor decisions. Transparency International’s 2024 index scored Nigeria 26/100, and surveys show widespread public belief that corruption has worsened. For foreign investors, this translates into unpredictable costs and complex negotiations, especially when several agencies claim overlapping authority. Examples such as the sudden $10 billion Binance fine in 2024 or mass revocation of Bureau de Change licences reinforce the perception that enforcement actions can arrive abruptly.

Environmental, social and governance (ESG) standards, which are now mandatory for many global funds, further complicate Nigeria’s position. Oil spills and gas flaring remain chronic issues in the Niger Delta, with research indicating that most cases go unresolved. Large investors increasingly screen out jurisdictions with weak environmental accountability, limiting Nigeria’s access to long-term, sustainability-linked capital unless improvements become visible.

Despite these obstacles, there are signs of meaningful progress. Nigeria’s external reserves rose to $46.7 billion by November 2025, the highest in nearly seven years. Diaspora remittances increased about 12 percent, helped by the new Non-Resident BVN scheme. Tax reforms passed in 2025 introduced clearer rules for large companies and a Tax Ombudsman to mediate disputes, addressing long-standing complaints about arbitrary enforcement. If consistently implemented, these steps could gradually lower operational risk.

To build on this momentum, Nigeria must focus on a few key priorities. The FX market needs continued structural improvement, with policies that remain stable over time. Security must improve in both rural and urban areas. Power supply must become more reliable through realistic timelines that combine public and private investment. Tax and customs systems should become more digital, predictable and transparent. Above all, policies must be consistent – not only announced, but implemented and maintained.

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