President Tinubu recently stated that Nigeria is on track to attract about $20 billion in Foreign Direct Investment (FDI) in 2026. He made this statement while attending the Africa CEO Forum in Kigali, Rwanda, an event which is the continent’s largest gathering of business leaders and heads of state, convened annually to deliberate on African economic integration and private sector growth. He cited the fact that his administration’s systematic removal of regulatory bottlenecks, macroeconomic stabilization, and transparency reforms, had made this possible.
Now I must say, if realized, it will certainly be a highly commendable breakthrough, as Nigeria historically has only been able to attract under a billion dollars in FDI annually due to investor anxiety over currency devaluation and multiple exchange rate windows. However, this statement by President Tinubu needs to be qualified in ways that he didn’t do so at the Africa CEO Forum. I shall proceed to do so now.
I shall start with a fact that you might be already aware of, but I will state anyways just to be on the safe side. Now it should be pointed out that the $20 billion isn’t money that is already in Nigeria’s kitty. The figure represents the sum value of a combination of committed investments, signed partnerships, and deals currently in pipeline stages that the administration expects to fully lock in over the course of 2026. Actually realizing these investments could easily take years.
Now let’s look at what projects the $20 billion has actually been earmarked for. While an exact, dollar-for-dollar sectoral breakdown of the projected $20 billion FDI has not been officially released in a single public balance sheet, the foundational deals underpinning President Tinubu’s statement reveal that oil and gas overwhelmingly dominate the total, like the proposed Shell Bonga South West deepwater project, which Shell executives could bring in investments worth $20 billion.
Now while this is no doubt a massive fiscal victory for the government, oil and gas projects typically operate as enclave with little backward and forward linkages to the rest of the economy and as a result create very few jobs for the teeming unemployed. Other notable projects include the 90,000 km fibre optic network being planned to scale ecommerce and AI connectivity. About $2 billion has been earmarked for this. The funding has been funding is structured as a Public-Private Partnership (PPP) composed of sovereign loans from international Development Finance Institutions (DFIs), grant funding, and private equity. Another notable project is the $600 million pledged by APM Terminals as investment into Nigeria’s maritime sector to upgrade port efficiency and expand cargo handling capacity.
An area in dire need of investment but is being ignored by the foreign investor community is the manufacturing sector. As a result of this, the federal government has been forced to set up a 75-billion-naira domestic Manufacturing Sector Fund to provide low-interest loans to local factories. A vibrant manufacturing sector will create jobs in sufficient amounts that at least begin to truly solve Nigeria’s unemployment problems.
It will be highly instructive to attempt to benchmark the $20 billion figure bandied about by President Tinubu. This is so because most people do not have exposure to public finance and so most people when they hear figures like this, they naturally and subconsciously compare them to their own finances. The inevitable result of this is these figures appear astronomically large.
Personal finance is however, not the proper means for gauging such figures. You need other projects being sponsored by public finance to make sense of such figures. This is what I intend to do in the following paragraphs.
Last year, the Minister of Budget and National Planning, Senator Atiku Bagudu, made it known that Nigeria must attract at least $100 billion in investment annually to achieve middle income status by the year 2050. Now that puts things in perspective. Areas such as Healthcare and local pharmaceuticals, Education and Human Development, Mechanized Agriculture and Agro-processing, and National Security could gulp as much as $43 billion annually. Investment in physical infrastructure would largely make up the rest.
So in rounding up, I will say given historical patterns of FDI into Nigeria, President Tinubu has cause to beat his chest if the $20 billion figure is realized, we as a nation, however have a long long way to go if we are to be able to garner the level of investment required to make a meaningful difference in life of ordinary Nigerians.
