Policy experts and civil society leaders have called on the Nigerian government to review and possibly exit outdated bilateral investment treaties (BITs), warning that current frameworks expose the country to costly international arbitration and undermine national interests.
Speaking at a policy dialogue in Abuja, stakeholders criticized the continued reliance on the Investor-State Dispute Settlement (ISDS) mechanism, which allows foreign investors to resolve disputes with governments in international tribunals rather than domestic courts.
ActionAid Nigeria's Position
The Head of Programmes at ActionAid Nigeria, Mr. Celestine Odo, stressed the need for Nigeria to prioritize its national interest by reassessing agreements that deliver limited benefits while exposing the country to significant financial and legal risks. He noted that countries such as the Netherlands, Germany, and France have also faced challenges under ISDS frameworks, underscoring the global nature of the issue.
According to him, Nigeria has the option to renegotiate or withdraw from such treaties as they expire, particularly where the costs outweigh the gains. He stressed that multinational corporations often wield disproportionate power under these agreements, leaving host countries with limited control and little protection.
Odo further emphasized the need for Nigeria to strengthen infrastructure, including power supply, and security to attract investment organically rather than relying on agreements that may compromise sovereignty. He said that investors are looking for markets, and Nigeria is a major market; however, improving the business environment would naturally draw investment.
Policy Alert's Perspective
Also speaking, the Executive Director of Policy Alert, Tidja Bolton-Akpan, pointed out that most BITs are outdated and biased in favor of investors. He argued that the ISDS system has “outlived its usefulness” and often sidelines the interests of host countries.
He cited Nigeria’s experience in the high-profile P&ID arbitration case, where an initial claim of $6 billion rose to about $11 billion, as evidence of the financial risks associated with international arbitration. He said such cases place enormous strain on public finances and highlight structural flaws in existing agreements.
He warned that BITs could hinder Nigeria’s commitments to climate action, including its obligations under the Paris Agreement and its goal of achieving net-zero emissions by 2060, adding that investment treaties tied to fossil fuel sectors may obstruct the country’s transition to cleaner energy.
Recommendations
Akpan called for greater involvement of the National Assembly of Nigeria in negotiating and reviewing investment agreements, including public hearings and impact assessments to ensure alignment with national development priorities. He also recommended capacity building for government officials and policymakers to better negotiate future agreements and protect Nigeria’s economic, environmental, and social interests.
The calls come amid increasing scrutiny of global investment frameworks, particularly in developing countries where disputes often result in costly settlements and limited long-term benefits.
