NES 32: J.P. Morgan, Chevron seek stronger legal shield for long-term Nigeria bet

Global investors, including JPMorgan Chase and Chevron, have called for stronger legal guarantees, policy consistency and improved security to sustain long-term investments in Nigeria, warning that businesses need predictable rules and competitive operating costs to commit capital.

Speaking at a panel session titled “Innovation, Investment and the Next Decade of Partnerships” sponsored by IHS Towers at the 32nd Nigerian Economic Summit in Abuja on Tuesday, executives said recent economic reforms had improved Nigeria’s investment prospects but stressed that the gains must be backed by durable laws and consistent implementation.

Dapo Olagunju, managing director of JPMorgan Chase in Nigeria, said the bank had operated in the country since 1960 and maintained a physical office presence since 1982, adding that it viewed recent reforms and regulatory developments positively.

He said the impact of reforms introduced over the past three to four years had been significant, reinforcing the importance of Nigeria to a global financial institution.

“The last time an international bank opened an office in Nigeria was probably in 2000. And that was when we moved from military dictatorship into civilian democracy. J.P. Morgan coming in at this time also sort of signifies that the impact of the reform that we put in place in the last three or four years is almost at the same level,” he said.

For Chevron, which has operated in Nigeria since 1961, the next phase of investment will depend on the stability of the policy environment, security and the competitiveness of project costs.

Jim Swartz, chairman and managing director of Chevron Nigeria and Mid-Africa, said the company had investment plans across several projects, including shallow-water operations, Usan, Owowo, Bonga Southwest and infill wells at Agbami.

He said the Petroleum Industry Act (PIA) and presidential directives had helped make the investment environment more attractive, but sustained investment required long-term laws, improved security, reduced oil theft and timely project delivery.

“And so, when you think about all of those, what will it take to sustain the attraction? It’s really the sustained commitment in terms of turning the directives and new legislation into long-term, durable law that we know is going to be there. Because our investments are not only for the near term, and some of these things are infill drilling, near-term results, but multi-decade investments.

“Knowing that we will have long-term support in the laws is very important. Knowing that we will have a secure operation is very important. And it’s been very good to see the movement that’s been made in the oil-producing regions of the Delta to improve the security and reduce the loss to oil theft, which has been a major inhibitor to any work there for a long time,” he said.

Swartz’s comments underscore the challenge of translating recent policy changes into long-term capital commitments in the oil and gas industry, where projects require substantial funding and years of planning before production and returns.

Kendra Gaither, president of the U.S.-Africa Business Centre at the U.S. Chamber of Commerce, said investment decisions depended not only on the opportunities available in a market but also on how easily and fairly businesses could operate.

She identified market access, clear and accessible regulations, transparency, the rule of law, stability, accountability, due process and fair treatment as important considerations for investors.

Gaither said Nigeria offered investment opportunities but needed to provide a predictable and transparent environment in which companies could make long-term decisions with confidence.

“Companies are looking at where environments are predictable, where there’s transparency, where there’s stability, and where there’s accountability and due process. So is there a reasonable expectation that U.S. companies will be treated fairly and equally to their counterparts here in Nigeria?

“Can they expect that not just the rules will be applied fairly, but they’re easy to access and clear to understand and to comply with? If there are disputes, because there are almost always disputes or issues that arise, is there a reasonable expectation that those disputes “Gaither said.

The panel also stressed the importance of fiscal credibility and consistency in strengthening investor confidence, particularly as Nigeria seeks to improve its standing in international capital markets.

Gaither said Nigeria’s ambition to attain investment-grade status by 2030 was promising but cautioned against using lower risk premiums simply as an opportunity to increase borrowing.

Instead, she said Nigeria should improve the structure of its borrowing and demonstrate fiscal responsibility, resilience to external shocks, credibility and consistency.

The speaker also identified foreign exchange reforms and the removal of petrol subsidies as measures that had helped improve the country’s investment outlook.

Beyond the broader policy environment, telecoms operators said the protection of critical infrastructure and the cost of deploying digital networks remained important to attracting investment.

Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), called for stronger legislation to protect telecommunications and other digital infrastructure designated as critical national assets.

He said damage to infrastructure had declined since the government designated it as critical national infrastructure, while enforcement and consequence management had improved. However, he said existing laws and penalties needed to be updated to reflect the importance of the assets being protected.

Adebayo also called for the removal of right-of-way charges across all states, warning that inconsistent fees and prohibitive land rents could increase the cost of deploying telecommunications infrastructure.

Shuaibu Afolabi, chairman of the Senate Committee on ICT and Cybersecurity, said the 2025 amendment had designated critical national information infrastructure, including telecommunications networks, banking systems and the National Identity Number database.

He said the Office of the Attorney-General of the Federation was coordinating relevant stakeholders to improve understanding and enforcement of laws governing information and communications technology and cybercrime.

Afolabi said the Senate would consider relevant legislation and welcomed contributions from industry stakeholders.

“If we extend this, it will also mean that if you have a data centre somewhere, that the land on which that data centre is built in Lekki, in Victoria Island, should be designated as a critical national asset. We will see how we can resolve the tension between these, and that’s why in the 10th Assembly, particularly the Committee I chair, three things drive our legislative activities. Number one, we’re not legislating for specific technology, we are legislating around principles,” he said.

He also emphasised Nigeria’s importance to investors seeking opportunities across the continent.

The panel’s discussions highlighted the need for Nigeria to convert reforms into a stable investment framework that can withstand policy changes and give businesses greater certainty over operating costs, regulation and dispute resolution.

Investors said predictable regulations, fair treatment, security, ease of doing business and consistent implementation would be crucial to attracting and retaining capital, while the existing U.S.-Nigeria Commercial Investment Partnership could provide a platform for deeper commercial engagement.