Nigeria’s reputation as Africa’s economic powerhouse has faced significant strain in recent years. Foreign direct investment (FDI) plummeted by 36 percent in 2023, reaching just $698 million—the lowest in over a decade, according to the UNCTAD World Investment Report 2024.
High-profile exits, from energy giant Shell divesting its onshore operations to Procter & Gamble halting manufacturing and Microsoft closing its African Development Centre in Lagos, have underscored deepening investor unease. The reasons? A toxic mix of policy instability (including abrupt tax hikes and import restrictions), a volatile naira (which lost 70 percent of its value in 2023 after forex reforms), and rising security costs—factors that pushed Nigeria to the lower rung of the ease of doing business ladder since 2020.
Yet beneath the exodus, tentative green shoots are emerging. While GlaxoSmithKline and Sanofi joined the retreat in 2023, others like Microsoft (signing a $1M digital transformation deal with the government in early 2024) and Dangote Group’s $20B refinery—now operational—signal cautious optimism.
“While reforms like the naira float show promise, sustainable recovery hinges on stabilising these interconnected crises. Without meaningful progress, Nigeria risks losing its status as Africa’s investment hub.”