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The Nigerian Economic Summit Group (NESG) has raised concerns that recent tax reforms introduced by the United States could negatively impact foreign direct investment (FDI) in Nigeria.
According to NESG’s report, titled Trump’s Policy Playbook: Strategic Implications for Nigeria, the tax policies implemented under former US President Donald Trump may incentivize American firms to repatriate their investments, leading to reduced capital inflows into Nigeria.
The report underscores the urgency for Nigeria to diversify its investment sources by fostering stronger economic ties with alternative markets such as China, the European Union (EU), and Gulf nations. Enhancing the country’s investment climate through regulatory compliance, risk mitigation, and governance improvements could attract foreign investors despite shifting US policies.
“Trump’s tax reforms could drive US companies to repatriate their investments, thereby reducing FDI in Nigeria. To counteract this trend, Nigeria should proactively enhance its investment climate and attract investors from China, the EU, and Gulf nations,” the report stated.
The NESG also highlighted concerns regarding the future of the African Growth and Opportunity Act (AGOA), which is set to expire in September 2025. Given Trump’s previous limited focus on Africa, there remains uncertainty over whether AGOA will be renewed or modified. Any reduction in AGOA’s benefits could significantly impact Nigeria’s trade with the US, particularly in key sectors such as oil and agriculture.
Furthermore, the report warns that potential tariff hikes and trade restrictions could pose additional challenges for Nigerian exporters, particularly those in oil, cocoa, and textile industries. Stricter US trade policies could lead to revenue losses and increase the need for Nigeria to explore new trade partnerships while strengthening its regulatory framework to enhance economic resilience.
By prioritizing regulatory compliance, trade policy adaptation, and investment-friendly reforms, Nigeria can mitigate the risks posed by US tax reforms and sustain its economic growth.
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