Foreign Direct Investment in Nigeria: Challenges, Comparative Lessons, and the Path to Reform
Tony A. Francis, Beauty B. Obuh
Abstract
This article examines the legal and institutional challenges confronting foreign direct investment in Nigeria and draws comparative lessons from China and the United States. Despite an extensive body of investment legislation and institutional machinery, Nigeria's FDI performance remains volatile and heavily concentrated in extractive sectors, while established multinational investors continue to exit the market. The article identifies six structural problems, namely: regulatory volatility and institutional overlap; frequent legislative amendment and policy reversal, particularly in foreign exchange administration; the complications of federalism and uneven state capacity; systemic corruption and weak accountability institutions; gaps in intellectual property enforcement; and the constraints imposed on land-based transactions by the Land Use Act 1978. Drawing on China's negative-list liberalisation, and the United States of America's Committee on Foreign Investment regime, the article argues that predictability and consistent enforcement matter as much as the substantive content of investment law. It concludes that Nigeria's investment framework suffers less from a deficiency of legislation than from fragmentation, weak institutional coordination, and enforcement gaps, and recommends consolidation of the legal framework, a rebalancing of investor protection against the State's regulatory space, strengthened institutional coordination, and targeted sectoral reform, particularly of land administration and foreign exchange regulation.
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Keywords
References
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[1] Hereinafter abbreviated and referred to as CFIUS.
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