Nigeria urged to fix regulatory gaps as investor uncertainty persists

Nigeria’s business environment continues to be undermined by overlapping regulations and frequent policy changes, discouraging both domestic and foreign investment, according to a new report by the Nigerian Economic Summit Group.

• Nigeria’s business climate remains constrained by overlapping regulations and frequent policy changes, according to a new NESG report.
• Despite reforms, gaps in regulatory consistency, contract enforcement, and policy predictability persist.
• Economic growth has stabilised at 3 to 4 percent, but structural challenges continue to limit private-sector expansion.
• The report calls for targeted legislative reforms to improve coordination, reduce uncertainty, and attract long-term investment.

The findings were presented in a “Baseline Report on Priority Legislative Actions to Foster a Business Enabling Environment”, produced by the Ernest Shonekan Centre in partnership with the Policy and Legal Advocacy Centre, with support from the Foreign, Commonwealth & Development Office.

The report highlights longstanding structural and regulatory barriers that continue to constrain economic transformation in Africa’s largest economy. It notes that, despite Nigeria’s large consumer market, youthful population, and resource base, businesses still operate under “high-cost and high-risk conditions.”

Persistent challenges include unreliable electricity supply, weak transport and logistics infrastructure, limited access to affordable finance, foreign exchange shortages, and high inflation. The report adds that insecurity, skills shortages, and regulatory unpredictability further complicate operations for firms.

“Complex and overlapping regulations, frequent policy shifts, weak coordination across agencies, and uneven subnational implementation raise compliance costs and create uncertainties for investors,” the report stated.

While reforms introduced through the Presidential Enabling Business Environment Council and the Business Facilitation Act have improved business registration processes and administrative efficiency, the NESG said significant gaps remain. These include inconsistencies in regulation, weak contract enforcement, slow dispute resolution, and poor policy predictability, all of which continue to dilute the impact of broader economic reforms.

Speaking at the presentation, Nnanna Ude, a board member of the Ernest Shonekan Centre, said Nigeria’s economic growth has stabilised at around 3 to 4 percent in recent years, largely driven by non-oil sectors. However, he warned that structural weaknesses continue to limit private sector expansion.

“Public debt remains elevated, and structural constraints such as infrastructure gaps, regulatory inefficiencies, policy inconsistencies, and institutional challenges continue to limit private sector growth and investment,” Ude said.

He added that the report underscores the limits of macroeconomic reforms without corresponding legislative and regulatory improvements.

“Macroeconomic reforms alone are not sufficient without strong, coherent, and effective legislative and regulatory frameworks,” he noted.

According to the report, many of the challenges facing businesses stem from gaps within Nigeria’s legal and regulatory systems. These include conflicting provisions across laws, overlapping mandates among regulators, weak enforcement capacity, and shortcomings in legislative processes, particularly around transparency and coordination.

Kyari Bukar, chairman of the Ernest Shonekan Centre, said the review covers key sectors including governance, the digital economy, trade, infrastructure, energy, climate policy, and the financial system. He noted that identifying and addressing legal gaps across these areas is critical to improving investor confidence.

The report recommends targeted legislative reforms to improve policy consistency, strengthen regulatory coordination, and enhance implementation. Without such changes, it warns, Nigeria risks continued underperformance in attracting long-term investment and achieving sustained economic growth.