UK Commits to Supporting Nigeria's Business Climate Reforms for Investment Growth

The United Kingdom has affirmed its dedication to partnering with Nigeria to enhance reform implementation, reduce operational hurdles, and foster a more predictable business climate. This initiative aims to unlock investment potential, generate employment, and drive sustainable economic expansion.

Alice Clarke, the UK’s Head of Macroeconomic Stability at the British High Commission in Nigeria, conveyed this commitment during the ‘The Reform and Diplomatic Roundtable 2026’. The event, organised by the Presidential Enabling Business Environment Council (PEBEC) in conjunction with the UK International Development and Nigeria Economic Stability and Transformation (NEST) programme, focused on the country's economic reforms.

NEST, a collaborative programme between the UK and Nigeria under the British High Commission, is dedicated to supporting macroeconomic reforms and improving the overall business landscape in Nigeria.

Clarke remarked that businesses experience reforms not just theoretically, but through tangible aspects such as permit processes, utility services, and institutional responsiveness to issues. She noted that the current assessment provides a clear understanding of areas experiencing progress and those requiring improved consistency.

"The UK is committed to working side-by-side with Nigeria to strengthen implementation, reduce bottlenecks, and create a more predictable business environment that unlocks investment opportunities, creates jobs and supports long-term growth," Clarke stated.

Presenting Nigeria’s Investment Outlook 2026, titled “From Reform to Real Capital Deployment,” with a focus on reform-leading states as gateways for global capital, NEST expert Mr. Afolabi Imoukhuede shared that Nigeria's investment prospects for 2026 are “cautiously optimistic,” referencing the Central Bank of Nigeria's stance in January.

He observed that Nigeria is regaining attention on the investment map, with macroeconomic reforms and adjustments in foreign exchange, fiscal policy, and general policy contributing to a more stable outlook.

The NEST expert, who also cited the International Monetary Fund’s projection of 4.4 percent economic growth for Nigeria in 2026, noted that investor confidence is gradually returning.

However, Imoukhuede clarified that investment capital remains discerning, risk-averse, and sector-specific. He added that while the economy is attracting capital inflows, these are predominantly short-term portfolio investments, underscoring the need for Foreign Direct Investments (FDIs) in the real sector.

Imoukhuede emphasized that securing substantial FDIs for the real sector is crucial. Nigeria must translate macroeconomic stability into bankable assets for real sector investment, transition from passive inflows to strategic deployment, and target FDIs towards sectors that generate or conserve foreign exchange, boost job creation, and prioritize production.

He identified key real sectors for FDI deployment as agriculture and agro- processing, manufacturing and industrial clusters, logistics and trade infrastructure, power and renewable energy including green jobs, mining, the digital and creative economy, and housing and construction materials. The focus, he stressed, should be on sectors that earn or save foreign exchange and create employment.

Imoukhuede proposed that the top ten states in the PEBEC Ease of Doing Business (EoDB) ranking should be developed into pre-packaged investment destinations designated as FDI ‘Landing Zones,’ moving beyond mere rankings. These zones, he explained, would signal improvements in areas like faster approvals, more predictable regulations, enhanced land and permit systems, a strengthened justice system, and better investor engagement.

Additional benefits include advancements in digital governance and dedicated investor aftercare services. He noted that reduced execution risk directly correlates with increased investment.

In his keynote address, "National Development Planning as a Catalyst for Subnational FDI," the Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, highlighted that Nigeria’s federal structure grants significant authority to states and local governments, including the power to enter contracts and manage their own judicial systems. Consequently, their actions are pivotal in attracting investment and stimulating economic growth.

He referred to Chapter 2 of the Constitution, which outlines the Fundamental Objectives and Directive Principles of State Policy, emphasizing Nigeria as a constitutional market economy and a federation. Section 13 of the Constitution mandates all tiers of government and authorities to collaborate in observing and achieving these fundamental objectives.

Bagudu stated that Nigeria's aspiration to achieve a $1 trillion economy by 2030 will significantly depend on the contributions of both states and the private sector.

"We feel confident that with that mindset, led by the private sector, we can create a $1 trillion economy, supported by the response that our economy has experienced to doing what is right," he commented.

He added that competition among states, supported by reforms and development initiatives backed by organizations like the World Bank, has led to improved economic performance nationwide. The minister reiterated that Nigeria's entrepreneurial population remains a significant asset, possessing a universal drive for innovation and hard work across all states.