Nigeria’s sweeping macroeconomic reforms have gained praise from the global investment community, yet significant concerns linger over structural vulnerabilities and regulatory bottlenecks. These sentiments came to the fore during a private investor forum hosted by the Central Bank of Nigeria (CBN) at the Nasdaq MarketSite in New York on April 17, 2025.

Titled “The Nigeria Investment Agenda: Pathways for Growth & Global Partnerships,” the high-profile gathering attracted major players in global finance, including Citi, JPMorgan Chase, Standard Chartered, and Jadara Capital Partners. Co-hosted by the NGX Group, J.P. Morgan, and the African Venture Capital Association (AVCA), the event marked a major milestone in Nigeria’s efforts to re-engage foreign portfolio and direct investors.

While investors acknowledged the bold steps taken by Nigerian authorities—such as fuel subsidy removal and foreign exchange (FX) market liberalization—they also raised red flags on the country’s ongoing reliance on crude oil, capital repatriation risks, and excessive transaction costs in local capital markets.

Applause for Reforms, Warnings About Oil Dependency

Joyce Chang, Chair of Global Research at JPMorgan Chase, offered commendation for Nigeria’s strides in addressing deeply rooted structural challenges. She singled out FX liberalization and fuel subsidy elimination as particularly impactful.

However, she cautioned that these reforms have emerged in a turbulent global environment. Citing recent U.S. tariff hikes—widely attributed to former President Donald Trump’s policy revival—Chang explained that the resulting trade friction could generate a tax effect equivalent to 3% of U.S. GDP. In her view, such global instability only amplifies the risks associated with Nigeria’s continued dependence on oil revenues.

“Oil price volatility is a fundamental risk factor that investors cannot ignore,” Chang warned. She noted JPMorgan’s updated recession forecast, which now places the probability of a U.S. economic downturn at 60%, up from 40%, raising further uncertainty for oil-exporting economies like Nigeria.

Market analysts now expect oil prices to drop into the $50 per barrel range by 2026, a shift that could erode Nigeria’s fiscal buffers and pressure its external reserves.

A Push for Post-Oil Diversification

Some investors argued that oil dependency, while still relevant, should no longer dominate the investment discourse. Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered, offered a more optimistic take on Nigeria’s trajectory. She emphasized that recent structural changes—particularly FX market reform—have laid the groundwork for economic diversification.

“Nigeria is now in a position to begin detaching from the boom-and-bust oil cycle,” Khan stated. “The naira is more reflective of market forces, and the policy regime is evolving to support non-oil growth.”

Still, she advised that credibility hinges on consistency. Khan stressed that structural reforms must be nurtured over time and that premature policy reversals could derail progress.

“We’re just at the beginning of a credible transformation,” she said, urging policymakers to maintain momentum even in the face of near-term pressures.

FX Policy Wins Praise, But Confidence Remains Fragile

Jason Rekate, Global Co-Head of Corporate Banking at Citi, noted a sharp turnaround in global investor sentiment toward Nigeria. Thanks to increased FX transparency and fewer capital controls, Nigeria is no longer viewed as a problematic destination, he said.

“Clients are no longer asking whether to invest in Nigeria—they’re asking how soon they can enter,” Rekate remarked.

Nevertheless, he warned that Nigeria remains vulnerable to global macroeconomic shocks. A potential recession in the U.S. or a broader emerging market selloff could easily reignite naira volatility. Rekate emphasized that the naira’s newfound stability must prove resilient under stress.

“Nigeria’s FX policy has improved, but we need to see how it holds up in a more adverse environment,” he said.

Capital Market Costs Still a Major Obstacle

While foreign investor appetite is improving, structural barriers in the Nigerian capital markets continue to deter long-term capital. Ahmad Zuaiter, Co-Founder and Chief Investment Officer of Jadara Capital Partners, provided a sobering comparison: transaction costs for listed equities in Nigeria currently range from 2% to 3%, while similar trades cost only 10 to 15 basis points in peer markets like Saudi Arabia and Egypt.

“Two years ago, investors were completely out of Nigeria due to capital controls,” Zuaiter explained. “Today, there’s renewed interest—but the market is still too expensive.”

He attributed these high costs to regulatory inefficiencies, including outdated levies such as stamp duties. Zuaiter urged Nigerian regulators to provide clear and consistent assurances that the era of arbitrary market restrictions—such as circuit breakers and surprise FX rules—is over.

“Credibility must be rebuilt,” he said. “Investors need to know that the rules won’t change overnight.”

Long-Term Potential Still Appeals

Despite the concerns, the general tone at the event remained cautiously optimistic. Analysts and investors alike agreed that Nigeria’s large and youthful population, vast natural resources, and ongoing reform drive position it as one of Africa’s most promising frontier markets.

Razia Khan pointed to Nigeria’s recent population census as evidence of its looming consumer potential, noting projections that the country could become the third most populous nation by 2050.

“Nigeria is not yet fully priced into global investment strategies,” she said. “But that’s beginning to change.”

JPMorgan’s Joyce Chang echoed this sentiment, highlighting that Nigeria had remained a top investment recommendation for the bank for over 18 months.

“The reforms are being noticed. The key now is sustaining them,” she said.

Key Requests to the Central Bank of Nigeria

Throughout the forum, foreign investors reiterated a clear list of expectations from Nigerian policymakers to unlock deeper investment flows:

• FX Policy Stability: Investors want consistent and transparent FX policies without arbitrary market closures or backdoor controls.

• Lower Transaction Costs: They urge reductions in high trading fees and levies that diminish investment returns.

• Diversification Blueprint: Clear, actionable plans for broadening revenue sources beyond oil, especially in areas like VAT and tax administration, are essential.

• Improved Business Climate: Investors cited infrastructure, travel restrictions, and logistical hurdles as key barriers to entry.

• Policy Communication: Transparency in monetary and fiscal policy announcements was listed as a top priority.

Context and Backdrop

This forum took place nearly two years after Nigeria launched its sweeping FX reform efforts in June 2023, shortly after President Bola Tinubu took office. The CBN had moved decisively to dismantle Nigeria’s multiple exchange rate windows and replace them with a more market-driven approach. The reforms eliminated FX restrictions and allowed exchange rates to be determined by demand and supply dynamics.

Though these reforms initially led to naira depreciation and market instability, the currency began stabilizing in early 2025 following a series of interest rate hikes and liquidity support from the CBN. By Q1 2025, investor confidence had improved, and FX inflows via formal channels increased.

However, external pressures returned in April 2025 as global markets reacted to Trump-era trade tariffs, reigniting fears of a global slowdown. Oil prices dropped, and the naira came under fresh pressure. In response, the CBN injected liquidity into the market and clarified that Nigeria’s net foreign reserves now stand at $23 billion.

These macroeconomic uncertainties set the tone for the New York investor roadshow. While investors welcomed Nigeria’s new direction, they remain watchful—and demand consistent execution to turn early optimism into lasting capital inflows.