…Tax reforms, infrastructure gaps, financing costs threaten business expansion as World Bank projects 4.4% growth
NIGERIA: Financial and tax experts have called on the Federal Government to establish consistent, transparent and sustainable investment policies, warning that policy uncertainty, weak infrastructure and limited access to finance could undermine efforts to attract capital, expand businesses and create jobs.
The experts, who spoke at the National Tax and Economic Conference in Lagos on October 9, said Nigeria needed a more predictable business environment in which investors could make long-term decisions without the risk of abrupt policy changes, inconsistent tax administration or uncertainty over the rules governing their investments.
The conference, themed “Investment Strategy: Nigeria 2027 and Beyond,” brought together discussions on taxation, investment management and the economic conditions required to strengthen domestic enterprise and attract foreign capital.
Their recommendations come as Nigeria seeks to consolidate recent macroeconomic improvements and translate them into stronger private investment, higher productivity, employment opportunities and better living standards.
According to the World Bank’s October 2026 Nigeria Development Update, the economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent in the corresponding period of 2025 and 3.5 per cent in 2024.
The World Bank has projected that Nigeria’s economy could grow by an average of 4.4 per cent annually through 2028, provided the government sustains economic reforms and improves public service delivery. However, the institution has emphasised that stronger economic performance must translate into more jobs, reduced poverty and improved living conditions.
Speaking at the conference, Chief Blakey Okwudili Ijezie, an Anambra-born chartered accountant and fiscal reform advocate, said Nigeria needed policies that promote economic diversification, encourage private-sector participation and establish a more favourable environment for business growth.
Ijezie identified policy consistency, tax reforms, infrastructure development and access to finance as critical determinants of investor confidence and business expansion.
He stressed the relationship between taxation and investment, noting that a transparent and predictable tax system would enable businesses to plan more effectively while helping the government mobilise revenue for infrastructure and essential public services.
His position highlights a central challenge facing Nigeria’s economic reform programme: how to increase government revenue without creating unnecessary uncertainty or imposing avoidable compliance burdens on businesses whose expansion is essential to job creation.
TAX REFORMS UNDER INVESTOR SCRUTINY
Nigeria’s tax administration and revenue mobilisation efforts have become increasingly important to the government’s economic strategy.
Four new tax laws took effect on January 1, 2026, as part of a broader effort to modernise the tax system, improve compliance and strengthen revenue collection.
The reforms have implications for businesses, investors and government finances, making clarity over implementation, enforcement and compliance procedures particularly important.
The International Monetary Fund has welcomed Nigeria’s recent tax reforms while emphasising the need for stronger public financial management, fiscal transparency and accountability. It has also identified electricity, security, infrastructure, agriculture and human capital as priority areas for reforms aimed at supporting inclusive growth and economic diversification.
For businesses, the challenge extends beyond the tax rates they pay. Predictability in the interpretation and enforcement of tax rules, timely resolution of disputes and coordination among tax authorities can influence investment decisions, operating costs and the willingness of companies to commit capital to long-term projects.
Frequent or poorly communicated changes can make financial forecasting more difficult, particularly for small and medium-sized enterprises that have limited capacity to absorb additional compliance costs.
Conversely, transparent administration and clear rules can improve business planning, strengthen voluntary compliance and help the government generate sustainable revenue without relying excessively on unpredictable enforcement measures.
The policy challenge, therefore, is to balance revenue mobilisation with an investment environment that encourages businesses to expand production, employ more workers and compete effectively.
FOREIGN CAPITAL INFLOWS RISE, BUT GROWTH MUST DEEPEN
Nigeria has recorded a significant increase in private capital inflows, offering evidence that recent economic reforms have attracted renewed investor interest.
The Federal Ministry of Information and National Orientation reported on October 12 that World Bank Group President Ajay Banga had acknowledged an increase in private capital inflows from approximately $300 million in 2023 to nearly $6 billion in 2026.
The increase represents a substantial improvement in the volume of capital entering the country. However, the figures alone do not establish how much of the investment is long-term productive capital, how widely it is distributed across sectors or how many jobs it has created.
For policymakers, the next challenge is to ensure that stronger capital inflows translate into productive investment, expanded industrial capacity, technology transfer, export growth and employment.
This requires more than attracting investors into financial markets. Businesses that manufacture goods, process agricultural products, develop technology, build infrastructure and provide essential services also need reliable electricity, efficient transport networks, accessible financing and a regulatory environment in which long-term plans remain viable.
The World Bank’s October assessment similarly stresses the importance of sustaining macroeconomic reforms while advancing measures that support private investment, productivity and job creation.
The distinction matters because an improvement in headline economic growth does not automatically guarantee a corresponding improvement in household incomes or employment opportunities.
Nigeria must therefore focus not only on the amount of capital attracted but also on its productive use, the sectors receiving it and its contribution to domestic value creation.
INFRASTRUCTURE AND FINANCING COSTS REMAIN CENTRAL
Ijezie’s emphasis on infrastructure and access to finance reflects two constraints that can influence the ability of Nigerian businesses to expand.
Unreliable electricity, inadequate transport infrastructure and high logistics costs can increase production expenses, weaken competitiveness and discourage investment in manufacturing and other capital-intensive sectors.
For smaller enterprises, financing conditions can be equally consequential. Businesses need affordable credit to purchase equipment, maintain inventories, invest in technology and expand their operations.
When borrowing costs are high or lenders consider businesses too risky, otherwise viable projects may be delayed or abandoned. Companies may also be forced to rely on retained earnings, limiting the speed at which they can expand.
A more investment-friendly economy would therefore require coordinated action on infrastructure, financial-sector access, regulatory predictability and the efficiency of public spending.
Government investment in infrastructure can complement private capital, while transparent procurement and effective project delivery can improve confidence that public resources are producing measurable economic benefits.
The World Bank has also stressed the importance of improving the quality of public expenditure, particularly as increased government revenues create opportunities for states to strengthen infrastructure and public services.
INVESTORS WARNED AGAINST CONCENTRATING WEALTH
Beyond government policy, the conference also examined how individual and institutional investors could protect their capital and improve investment decisions.
The Managing Director and Chief Executive Officer of Morgan Capital Investment Limited, Mr Chukwudi Nga, identified diversification, analysis, allocation, review and discipline as essential principles of investment management.
Nga cautioned investors against concentrating their funds in a narrow range of assets, particularly land and shares.
He urged prospective investors to assess opportunities carefully, diversify their portfolios and understand the risks involved before committing their money.
He also advised investors to ask critical questions about the nature of an investment, its potential returns and the risks that could affect their capital.
Diversification can help reduce exposure to losses associated with a single asset or market, although it does not eliminate investment risk or guarantee positive returns.
Similarly, investment analysis requires investors to distinguish between credible opportunities supported by verifiable information and schemes whose projected returns cannot be independently substantiated.
For Nigeria, where businesses and households face changing economic conditions, these principles are relevant to the mobilisation and preservation of private capital.
Investment decisions made without adequate due diligence can expose individuals and businesses to avoidable losses, while disciplined financial planning can help channel savings into productive activities.
THE CHALLENGE AHEAD OF NIGERIA 2027
The conference’s focus on Nigeria 2027 and beyond places investment policy within a period when economic management, public accountability and the durability of reforms will remain important considerations for businesses and investors.
For investors committing capital over several years, the credibility of economic policies depends partly on whether regulations are clear, institutions function effectively and government commitments are implemented consistently.
Political and administrative transitions can create uncertainty when investors fear that existing rules, incentives or contractual arrangements may be altered without adequate notice or consultation.
Maintaining a predictable policy environment does not mean that governments must never revise their economic programmes. Rather, changes should be supported by clear objectives, credible evidence, transparent communication and appropriate implementation arrangements.
Such an approach would help businesses distinguish between necessary economic adjustments and arbitrary policy shifts.
It would also strengthen the relationship between government revenue generation and private-sector expansion, particularly if tax receipts are channelled into infrastructure, education, healthcare and other services that improve productivity.
The World Bank’s latest assessment points to a related challenge: Nigeria’s improving economic performance must be accompanied by better public service delivery and spending that produces tangible development outcomes.
Ultimately, the recommendations made by Ijezie and Nga underscore two complementary requirements for sustainable economic growth: a stable and transparent policy environment that encourages investment, and disciplined investment decisions that enable businesses and individuals to manage risk.
For Nigeria, the test will be whether improvements in economic stability and capital inflows can be converted into more productive enterprises, sustainable jobs and higher living standards.
The discussions at the National Tax and Economic Conference reinforced the need for government, businesses and investors to align policy decisions and investment strategies with the country’s long-term economic development objectives.
Stella Obi is of the Ministry of Information and Value Reformation, Anambra State.
Century Herald
