The Lagos Chamber of Commerce and Industry (LCCI) has said Nigeria is emerging as one of Africa’s top-performing destinations for foreign direct investment (FDI), despite heightened geopolitical uncertainty and weak global investment flows.
President of the Chamber, Leye Kupoluyi, stated this while delivering the LCCI’s “State of the Economy” address, citing the UNCTAD World Investment Report 2026.
According to him, Africa recorded a modest improvement in investment inflows, with Nigeria ranking among the continent’s strongest performers after FDI rose by 148.4 per cent to $4.01 billion in 2025, driven largely by financing for oil and gas projects.
He noted, however, that global FDI remained below pre-pandemic levels due to geopolitical tensions, subdued cross-border mergers and acquisitions, and cautious investor sentiment.
Kupoluyi said the evolving global economic environment presents Nigeria with both opportunities and risks, underscoring the need for flexible, agile and forward-looking policies to preserve macroeconomic stability and sustain long-term economic growth.
He explained that while higher crude oil prices resulting from geopolitical tensions could temporarily boost export earnings, government revenue and external reserves, prolonged disruptions could also fuel inflation through increased energy, transportation, fertiliser and import costs.
He therefore urged the government to maintain a prudent, data-driven monetary policy to anchor inflation expectations while ensuring clear communication of policy decisions to strengthen market confidence.
On fiscal policy, Kupoluyi advised the government to focus on rebuilding fiscal buffers through stronger domestic revenue mobilisation, improved public expenditure efficiency and debt sustainability, while providing only temporary and targeted support to vulnerable households and businesses.
He cautioned against untargeted subsidies and price controls, warning that they weaken market signals, increase fiscal costs and discourage energy efficiency.
Commenting on the Central Bank of Nigeria’s decision to retain the Monetary Policy Rate (MPR) at 26.50 per cent, the LCCI said the move reflects the apex bank’s commitment to preserving price stability, anchoring inflation expectations, safeguarding exchange rate stability and strengthening macroeconomic resilience amid heightened global uncertainty.
The Chamber noted that although the decision would keep borrowing costs elevated, potentially constraining private sector investment, business expansion and access to affordable credit—particularly for micro, small and medium enterprises—it would also support exchange rate stability, improve investor confidence and reduce foreign exchange volatility.
According to the LCCI, sustaining the current monetary policy stance will reinforce macroeconomic stability by supporting the disinflation process and strengthening confidence in the financial system, even though higher interest rates may moderate economic growth in the short term by dampening private investment and consumer spending.
The Chamber therefore called for complementary fiscal and structural reforms aimed at boosting domestic production, improving infrastructure, enhancing revenue mobilisation and reducing the cost of doing business to maximise the benefits of the current monetary policy stance.
Kupoluyi also attributed Nigeria’s rising debt profile to continued borrowing to finance fiscal deficits and the valuation impact of exchange rate movements on external debt.
He, however, said higher crude oil prices and improved oil production in 2026 are expected to generate an oil revenue windfall that could strengthen government revenues, support external reserves, reduce borrowing requirements and improve exchange rate stability.
According to him, the anticipated windfall should be used prudently to reduce public debt, rebuild fiscal buffers, strengthen external reserves and finance critical infrastructure rather than expand recurrent expenditure.
He added that accelerating non-oil revenue mobilisation, improving tax administration and enforcing fiscal discipline remain critical to achieving long-term debt sustainability.
Kupoluyi also urged the Federal Competition and Consumer Protection Commission (FCCPC) to strengthen oversight of the pricing environment, citing cases where oil marketers increased pump prices in line with rising international crude oil prices but failed to reduce them when global prices declined.
He further called on the Commission to examine the pricing dynamics in the aviation sector to protect consumers and businesses from alleged price-fixing by domestic airlines during peak festive periods.
