Blue Elephants: Repatriating Funds And Doing Business In Nigeria: Fact Versus Fear For Foreign Investors

Somewhere right now, a board is looking at a map of Africa and asking whether this is the next great frontier — the next India, the growth story everyone will wish they had entered ten years sooner. Nigeria sits in the middle of that map. And between that board and a decision sit a handful of fears that no one quite says out loud, because saying them out loud feels unsophisticated. So, they sit in the room instead, large and unaddressed. Blue elephants.

I want to be clear about what follows. This is not received wisdom and it is not a neutral briefing. It is my reading of this market, formed over years of taking international businesses into it — and in some places, it is not the consensus view. Take it as opinion, argued and defended, because that is what it is.

This edition takes two of these fears head-on. A third I am holding for the next edition.

“If I put my money in, will I ever get it out?”

The oldest fear, and the one most directly answered: in its original form, it is simply not true.

Under democratic rule, and across years of legal practice in this market, no Nigerian law has prohibited a foreign investor from repatriating capital or returns where the applicable regulatory requirements have been met — not before COVID, not during it, not now. What obtained under military, colonial or traditional rule is a separate question, and not one addressed here. The idea that capital enters Nigeria and quietly disappears is a myth, and for most of its life a baseless one, kept alive by people who never tested it. What COVID did was give the myth a body.

Here is what happened. Before the pandemic, the official rate and the parallel rate barely diverged, and the gap was a trader’s margin, nothing structural. Then the two swung to opposite ends of the field, and the mechanism was ordinary economics. Nigeria earns most of its US dollars by selling crude. When the world shut down, demand for crude collapsed with it — at one point crude traded in the negative — and the single largest source of dollars into the economy dried up. But this is a heavily import-dependent market, and imports are paid in dollars, so demand for dollars never fell. With supply gone and demand intact, it created an acute scarcity.

The government tried to defend the naira by holding the official rate, and the result was a dual market — an official rate at which dollars were not actually available in volume, and a parallel rate that punished you. Businesses earning in naira but remitting in dollars were caught twice. The international airlines are the clearest case of not enough dollars to clear their repatriations at the official rate, and a naira devaluing while they waited, so that earnings worth five hundred dollars one week were worth four hundred a fortnight later. The longer the money sat, the less of it there was.

Notice that it was never a legal bar on taking money out, but a shortage of dollars at a protected rate. A plumbing problem, not a permission problem. The distinction is deliberate as the entire fear rests on confusing the two.

And, for all practical purposes, the plumbing has been materially repaired. One of this administration’s first acts was to collapse the dual market into a single rate with an aim to removing the distortion, widening dollar availability, and clearing the backlog. The legacy obligations, the airlines and others owed for a year or more, were paid in full. As a result of this step, the naira firmed. Consequently, in October 2025, Nigeria came off the FATF grey list alongside South Africa, Mozambique and Burkina Faso, an important external signal of improvements in Nigeria’s anti-money laundering and counter-terrorist financing framework.

Repatriation is no longer the risk it is reputed to be. It was real and painful for a short, sharp period, but it is not a feature of the market you are entering today.

Here is the part the fear gets exactly backwards. Your money does not flow because you held it at arm’s length and watched. It flows because you opted into the official channel. Thus, we secure the Certificate of Capital Importation before the funds land. The CCI records the capital importation and preserves the investor’s ability to repatriate capital and returns through the official foreign exchange market, while also providing the documentary foundation for the applicable tax treatment of those flows. Where it suits the business, we route capital through a free zone such as the Lekki Free Trade Zone, where FX, dividends included, moves without the tax burden that applies elsewhere, and we set a repatriation cadence —weekly or monthly— through a banking partner, so the funds never sit still long enough to lose value. The safety is not in standing outside the system. It is in entering it properly.

“Can I do business in Nigeria without being present in Nigeria?”

The second fear, and the answer fits in one sentence: you can contract with a Nigerian counterparty from anywhere on earth. You cannot operate a business in Nigeria from anywhere but Nigeria.

This catches the digital and technology players hardest, because their instinct is that a business with no warehouse and no office has no location. That instinct is the trap. If you sell a product or run a service into this country and earn from it, you are operating here, and the law applies to you whether you have planted a flag or not.

The grundnorm is CAMA — the Companies and Allied Matters Act 2020 — which requires any foreign company carrying on business in Nigeria to incorporate locally. The good news is that this is easy. The regulatory framework is principally concerned with transparency, licensing where required, and tax compliance. In most sectors, the gate is considerably wider than many investors imagine.

Now the reversal, and it is the heart of this piece. Registration is not a burden you grudgingly accept. It is the single best protection you can give yourself and your people.

Because a registered company has its own legal personality, a properly incorporated local entity absorbs the liability. If something goes wrong — a tax default, a missed SEC or CBN obligation — it is the company that answers, and the directors and the foreign parent sit behind the corporate veil, which can be lifted only by court order. Stay outside the system and there is no veil at all. Anyone who walks into the country “representing” your organisation is personally and fully exposed.

That is precisely the trap Binance is alleged to have walked into. When the authorities moved, one aspect of the prosecution’s case was that its executives had become the company’s representatives within Nigeria in the absence of a locally incorporated operating entity. Two executives were detained in 2024 as part of those proceedings. A local operating company would likely have stood at the centre of the regulatory engagement, significantly reducing the risk that individual executives became the immediate focus. Corporate structures are not an absolute shield against personal liability, but they do establish the legal entity through which regulators ordinarily engage.

Twitter encountered a related challenge from the other direction during its suspension — when the government wanted to engage, there was no locally registered entity to engage with, only a foreigner. Without further ado, the obvious questions followed, “How have you been earning here? Are you licensed? Have you paid tax?”

There are two narrow routes around full incorporation. A federal exemption for a genuine one-off project — come in, build the helipad, leave — or for foreign-government owned companies engaged solely in export-promotion activities, which frees you from ongoing compliance, though obtaining it is often more tedious than simply registering. And the local-partner model, where an established Nigerian company becomes your legal face in-country, and for some organisations, this is the cleaner answer. But the principle holds either way: you protect your own people by being properly inside the system, not by hovering outside it.

The same instinct, twice

Look at both fears together and they are the same fear wearing two coats. The frontier investor’s instinct is to keep one foot outside until they are certain — to test the water without committing, to earn without registering, to wait at arm’s length before letting the money in. And on both counts, that is exactly the posture that gets you hurt. The capital flows when you opt into the channel. The protection comes when you incorporate. The frontier is not crossed with one foot on each side.

The third elephant — next edition

The largest fear I have left for last, because it is the one most loaded with assumption: how does a foreign business deal with the Nigerian government without being dragged into bribery? How do you ask for a regulation to change, a protective law to be enforced, a license to be moved — legitimately, as a foreigner with no local king or well-placed cousin to call? Is engaging the government merely a polite way of saying you will be made to pay?

My answer is no. There is a lawful way to do all of it — and that is the subject of the next edition.

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