US Tax Reforms may Reduce FDI in Nigeria – NESG

The Nigerian Economic Summit Group (NESG) has warned that the US President, Donald Trump’s tax reforms may lead to a reduction in foreign direct investment (FDI) to Nigeria.

This was contained in the NESG’s report titled ‘Trump’s Policy Playbook: Strategic Implications for Nigeria’, released in February.

The NESG said Trump’s tax policies may encourage US firms to repatriate investments, thereby reducing capital inflows into Nigeria.

The report highlighted that Nigeria must proactively attract investors from alternative markets such as China, the European Union (EU), and Gulf nations by improving its investment climate.

“Trump’s tax reforms may encourage US firms to repatriate investments, reducing FDI in Nigeria. To counter this, Nigeria should attract investors from China, the EU, and Gulf nations by improving its investment climate.

“The future of AGOA, set to expire in September 2025, remains uncertain under Trump’s second term, especially given his less focus on Africa during his first term.

“However, if AGOA is renegotiated or its benefits reduced, it could impact trade in Nigeria, as the US remains one of the country’s top five export destinations for oil and agricultural products,” the report indicated.

The NESG’s report also points out that potential tariff hikes and trade restrictions could create significant challenges for Nigerian businesses exporting to the US market. Industries dependent on exports to the US, such as oil, cocoa, and textiles, may suffer revenue losses if stricter trade policies are implemented.