The United States Ambassador to Nigeria, Richard Mills Jr., has announced a strategic shift in U.S. engagement with Nigeria and sub-Saharan Africa, moving from traditional aid to a focus on private sector-led investment. Speaking at a Fireside Chat held at the Lagos Business School on Thursday, Mills emphasized that the U.S. aims to engage African nations not as aid recipients but as capable commercial partners.
Mills highlighted that Nigeria is the U.S.’s second-largest trade partner in Africa, with bilateral trade reaching approximately $13 billion by the end of 2024. He noted that while the U.S. has invested billions of dollars in Nigeria’s health, education, and agricultural sectors over the past few decades, it is now time to build on these investments and transition to a phase of vibrant private sector-led growth.
To facilitate this transition, Mills announced that the U.S. Department of Commerce, in collaboration with Nigeria’s Ministry of Industry, Trade, and Investment, signed a five-year Memorandum of Understanding (MoU) on a Commercial and Investment Partnership (CIP). The agreement prioritizes three key sectors: agriculture, the digital economy, and infrastructure. Mills noted that Nigeria is one of only five African nations with which the U.S. has signed such an agreement, underscoring the importance of this partnership.
The MoU establishes working groups in agriculture, technology, and infrastructure to foster collaboration between the two nations. Mills commended the current Nigerian administration for its receptiveness to U.S. concerns and reforms, particularly in areas such as tax policy and business regulations. He acknowledged that while some of these reforms have been challenging for Nigerians, they are expected to yield positive outcomes in the long term.
However, Mills also pointed out that challenges remain, particularly in the power sector. He noted that electricity distribution and transmission capacity issues continue to hinder the operations of U.S. firms in Nigeria, especially in the tech sector. To address these challenges, the U.S. is supporting smaller-scale, off-grid energy solutions through initiatives like Power Africa, aiming to bypass some of the systemic issues with the national grid.
This shift towards private sector-led investment aligns with broader U.S. foreign policy objectives in Africa, emphasizing economic partnerships over traditional aid models. By focusing on trade and investment, the U.S. aims to foster sustainable economic growth and development in Nigeria and the broader sub-Saharan African region.
The CIP agreement and the focus on private sector engagement represent a significant step in the evolving U.S.-Nigeria relationship, with the potential to transform economic ties and contribute to the long-term prosperity of both nations.
