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Nigeria: An FCPA Minefield for Corporations

BY David Elesinmogun, Obumneme Egwuatu
July 28, 2011

Nigeria is a country of extremes. The most populous country in Africa ' seventh in the world, with a projected economic growth rate of approximately 7%, far surpassing that of the United States at about 3% ' Nigeria is a nation that presents vast financial opportunities.

But international corporations are forced to weigh the potential for hefty profits against the ever-present danger of operating in a country that tops the corruption index. Foreign (i.e., non-Nigerian) companies have reaped billions in profits from investing in Nigeria, and they have also shelled out more than a billion dollars in recent fines for bribing Nigerian government officials. Unfortunately, the words “Nigeria” and “corruption” have become inexorably linked in the collective corporate consciousness.

Historically, U.S. and European companies limited their presence in Nigeria to the petroleum and mineral extractive industries. Rich in natural resources with cheap labor and an expanding middle class, Nigeria is emerging as the economic powerhouse of Africa where the rate of returns for foreign investors can be enormous. However, high profits often come with significant risk ' and the risks for doing business in Nigeria can be great.

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