Overlapping Regulations, Frequent Policy Shifts Discouraging Investments – NESG

The Nigerian Economic Summit Group (NESG) has stated that overlapping regulations and frequent policy shifts have over the years discouraged investors in Nigeria’s business environment.

The Group made the disclosure on Wednesday during the release of “Baseline Report on Priority Legislative Actions to foster a Business Enabling Environment”  conducted by Ernest Shonekan Center  of the NESG in partnership with the Policy and Legal Advocacy Center (PLAC) with support from FCDO.        

The report identified the regulatory, structural and legislative barriers to the business environment and economic transformation in Nigeria.  

“Despite Nigeria’s large market size, youthful population, and abundant natural resources, businesses operate under high-cost and high-risk conditions. Persistent constraints include unreliable electricity supply, inadequate transport and logistics infrastructure, limited access to affordable finance, foreign exchange scarcity, regulatory unpredictability, insecurity, skills shortages, and sustained inflationary pressure. 

“A comparative assessment over recent years shows that many of these constraints have remained largely unchanged, suggesting that previous reforms have only delivered marginal gains rather than a structural transformation capable of significantly improving competitiveness. Among other constraints of the business environment, regulatory and institutional inefficiencies are major challenges. 

“Complex and overlapping regulations, frequent policy shifts, weak coordination across agencies, and uneven subnational implementation raise compliance costs and create uncertainties for investors,” the report said

It further stated that reforms driven by the Presidential Enabling Business Environment Council and the Business Facilitation Act have improved aspects of business registration and administrative efficiency, yet gaps remain in regulatory consistency, dispute resolution, contract enforcement, and policy predictability, noting that these weaknesses dilute the effectiveness of broader economic reforms and discourage long-term domestic and foreign investment.

In his remarks, a board member of the Ernest Shonekan Center (NESG), Mr. Nnanna Ude noted that Nigeria has experienced alternating cycles of growth and constraint with economic growth remaining moderate, stabilising at about 3 to 4 per cent in recent years, largely driven by the non-oil sector.

Yet, he said despite these improvements, key challenges persist. 

“Public debt remains elevated, and structural constraints such as infrastructure gaps, regulatory inefficiencies, policy inconsistencies, and institutional and regulatory challenges continue to limit private sector growth and investment.This underscores a central message of the report: macroeconomic reforms alone are not sufficient without strong, coherent, and effective legislative and regulatory frameworks,” the report added

Speaking further, he said, “The purpose of this policy brief, therefore, is to identify the key bottlenecks within Nigeria’s business environment and outline priority legislative actions that can address these constraints.

“The report examines the structural, institutional, legal, and regulatory barriers affecting the business environment. It identifies gaps within existing legal frameworks and proposes targeted legislative interventions to improve policy consistency, strengthen regulatory effectiveness, and support economic transformation.

“A major finding of this work is that many of the challenges confronting businesses today are rooted in gaps within the legal and regulatory framework. These include conflicting provisions across laws, overlapping regulatory mandates, weak enforcement capacity, and limitations in the legislative process itself, particularly around transparency, coordination, and inclusiveness.

“Without addressing these issues, reforms will continue to deliver limited gains, and the full potential of the Nigerian economy will remain constrained.”

The report, he said, further recommended legislative and regulatory action, not only to improve the quality of laws, but also to strengthen how those laws are developed, coordinated, and implemented.

Also speaking, Board chairman of the ESC, Kyari Bukar said the report particularly reviews existing and new legal frameworks pertaining to the business environment – focusing on six key areas: justice, governance and institutions; digital economy; trade, investment and competition; infrastructure, housing and urban development; energy and power; climate and environment; fiscal policy and financial sector, and identify gaps in the frameworks and how they undermine the business environment, while proposing a broad and legislation-specific recommendations to improve the business environment and facilitate rapid economic growth.