Ahead of the 2025 World Economic Forum (WEF) in Davos, Switzerland, Nigeria’s Finance Minister Wale Edun talked about important economic reforms that have boosted the nation’s growth and appeal to investors. Increasing domestic refining capacity, maintaining a stable exchange rate, and improving fiscal transparency are some of these measures. Investor confidence has been bolstered by these actions, which have enhanced foreign reserves, raised government revenue, and created a more stable business environment. Infrastructure development is also a top priority for the Nigerian government.
In order to promote industrial growth and improve global competitiveness, infrastructure is being developed, especially in the energy and transportation sectors. Edun and Vice President Kashim Shettima are leading Nigeria’s delegation to the WEF, which intends to present the nation’s vision for inclusive growth, technological innovation, and economic resilience. Shettima is going to co-chair a discussion on how digital Trade can boost Africa’s economic development, with an emphasis on putting the African Continental Free Trade Area’s (AfCFTA) Digital Trade Protocol into practice.
Critical industries have seen an increase in foreign direct investment.
A global risks conversation addressing geopolitical, technological, and environmental issues will also be part of his agenda. The administration of President Bola Tinubu has implemented reforms that have increased energy Security by investing in Renewable Energy and refining capacity, unified exchange rates, and enhanced financial responsibility through digital tools. Critical industries have already seen an increase in foreign direct Investment as a result of these measures. Nigeria has implemented important economic reforms to increase its capacity for domestic refining, draw in foreign direct investment (FDI), and create infrastructural projects that will change the country.
Although there are still issues with their implementation, several programs have produced quantifiable results. The Port Harcourt Refinery, which had been idle for years, began operations again in late 2024, significantly increasing Nigeria’s domestic refining capacity. As a result, the country’s capacity to refine oil expanded from 650,000 Barrels Per Day (bpd) to 860,000 bpd, a 67.7% increase. Nigeria is better positioned to meet its domestic fuel demand thanks to the Port Harcourt Refinery and the Dangote Refinery, which started production earlier in 2024 with a capacity of 650,000 bpd.
FDI fell to $29.83M in Q2, the lowest amount since 2013.
Reliance on imported refined Petroleum products will also be lessened by these improvements. Despite initiatives to improve the economic climate, Nigeria saw a drop in foreign direct investment in 2024. Foreign Direct Investment (FDI) fell to $29.8 million in the second quarter, the lowest amount since 2013. This is a 65.33% drop from the $86 million that was registered at the same time last year. Economic difficulties and the withdrawal of numerous international corporations from the Nigerian market are two of the reasons for the fall.
To promote economic growth, Nigeria has started ambitious infrastructural projects. One noteworthy example is the Nigeria LNG Train 7 project, which intends to raise the nation’s ability to produce liquefied Natural Gas from 22 million tonnes per annum (MTPA) to 30 MTPA, a 35% increase. It’s anticipated that this $6.5 billion investment will improve Nigeria’s standing in the international energy market and generate about 52,000 new jobs. The project was expected to be finished in four years, with a 30% completion rate as of August 2022.
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Even with these developments, Nigeria still has difficulties reaping the full rewards of its economic reforms. Concerns among Investors about the nation’s Economic Stability and policy coherence are shown by the drop in FDI. Additionally, even while the expansion of refining capacity is a good thing, problems like Pipeline vandalism and crude Oil Theft make it difficult to guarantee a steady supply of crude oil to these refineries. Nigeria must overcome these obstacles if it hopes to meet its economic goals and create an atmosphere that is more favourable to investment and expansion.