An extensive program of privatization is opening the door to foreign investment in core industries.

n igeria is back in business. After President Olusegun Obasanjo was elected leader for a second term in April this year – winning more than 60% of the vote in the country’s first civilian-run presidential poll in 20 years – there is renewed optimism that this regional superpower has finally turned a corner.

Nigeria – home to 120 million people – is Africa’s most populous state and thus its success is vitally important to the whole continent. A force for stability in the often troubled west African sub-region, Nigeria exerts significant influence over the smaller countries that surround it.

The new administration still has much to do in battling years of decline and mismanagement under the former military dictatorships. Despite Nigeria’s huge natural resources base – it is Africa’s leading oil producer – its people rank among the poorest in the world, while physical infrastructure is seriously degraded.

Huge strides have already been made since the return to democratic rule in 1999, however. Now there is fresh determination to tackle old problems like corruption, bureaucracy, security, and safety issues, and to address the persistent negative image of the country overseas.

In the last few years, Nigeria has made all the right moves to re-align its economy with the West following the suspension of various sanctions. An extensive program of liberalization and privatization has transformed core industries like the
energy sector, telecommunications, and the power sector, opening the door to private foreign capital.

The U.S. has a key role to play in turning these political gains into economic benefits, through initiatives like the African Growth and Opportunity Act (AGOA), designed to boost trade between the two states. American oil investment has also been strong, as Nigeria is perceived to be an important strategic supplier outside the Middle East.

There are further opportunities for American investors both within the established hydrocarbons sector, and elsewhere in financial services, infrastructure, manufacturing, and agriculture. The need to broaden the economic base remains a critical challenge for the new government. These are still early days.