U.S. businesses canvass free-floating naira for more investment in Nigeria

United States businesses and companies would prefer a free-floating naira for them to invest and do more business in Nigeria, according to Senator Chris Coons, head of a congressional delegation visiting Nigeria, Africa’s largest economy.

“I have heard concerns from American companies that before they significantly increase their investment here they would hope they return to a floating currency,” Coons of Delaware is reported to have said Wednesday.

According to Bloomberg reports, he disclosed this in an interview in Lagos, saying that U.S. companies are deterred from investing more in Nigeria by its capital controls

“Some of the currency controls that remain I think raise the question of whether foreign direct investment, if successful and profitable, will be able to be returned to any country.”

Nigeria, Africa’s biggest oil producer, tightened currency restrictions after the 2014 crash in crude prices, a move analysts blamed for creating a severe shortage of foreign exchange that made it difficult for companies to pay for imports and repatriate profits.

However, while the scarcity has eased this year, the central bank still tightly manages the naira.

The U.S. is Nigeria’s third-biggest trading partner after India and China, with volumes between the two reaching $6.8 billion in 2016, according to data compiled by Bloomberg. That was down from $12 billion in 2014. The stock of U.S. foreign direct investment in Nigeria was $5.5 billion in 2015, according to the State Department. Most of that was in oil and gas.

Coons remarked that the current administration has taken other steps to make Nigeria more attractive to investors.

“The Buhari administration has made significant progress in addressing some of the structural challenges, both security and economic challenges, that were a barrier to more active American investment,” he said.

Coons, a Democrat, visited Nigeria with seven other senators. In Lagos, they met business leaders including Aliko Dangote, Africa’s richest man, and Tony Elumelu, chairman of United Bank for Africa Plc and investment company, Heirs Holdings Ltd.