Nigeria faces a growing risk of capital flight and diminished foreign direct investment (FDI) unless it urgently overhauls its notoriously sluggish business registration system, the country’s Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) warned on Tuesday.
In a newly released policy advisory, the RMAFC said bureaucratic bottlenecks in company incorporation stretching from weeks to months in many cases, are undermining President Bola Tinubu’s broader push to improve the ease of doing business in Africa’s largest economy. The commission singled out the Corporate Affairs Commission (CAC), the agency responsible for business registration, as a critical pressure point that requires immediate digital and administrative upgrades.
“Each day of delay pushes potential investors toward more agile markets in East Africa or Southeast Asia,” the RMAFC statement said. The commission noted that while Nigeria has made incremental progress in automating name searches and fee payments, post-incorporation steps, including tax identification registration, pension and social insurance enrollment remain fragmented and time intensive.
Economists tracking FDI flows point to real consequences. According to the United Nations Conference on Trade and Development (UNCTAD), Nigeria attracted roughly $3.3 billion in FDI in 2022, a fraction of the $10 billion it drew a decade ago. By contrast, smaller economies such as Rwanda and Kenya have slashed registration times to under 24 hours through fully integrated online portals.
The RMAFC’s intervention carries weight because the commission plays a dual role in revenue allocation and fiscal policy oversight. Its warning aligns with recent criticism from the Lagos Chamber of Commerce and Industry, which has flagged that informal business registration drives revenue loss and discourages formal financing.
Without legislative action to unify business registration with tax and labor agencies into a single digital window, analysts say Nigeria risks ceding its competitive edge to faster moving neighbors. “The Tinubu administration has talked boldly about reforms,” said a Lagos based investment strategist who spoke on condition of anonymity. “But for foreign capital, execution velocity is the only credibility that matters.”
The RMAFC urged the National Assembly to fast-track the Companies and Allied Matters Act amendment and allocate dedicated funding for CAC technology upgrades within the 2026 budget. Whether lawmakers respond before the next quarterly FDI data underscores a widening trust deficit remains uncertain.
