By Newspot Nigeria Editorial Desk
It has become standard political theatre in Nigeria—and in many parts of the world—for governments to boast about attracting investment by signing Memoranda of Understanding (MoUs) with foreign companies. The ceremonies are elaborate, the cameras flash, and the headlines roll in. But beneath the surface lies a troubling question: What, if anything, do these deals actually deliver?
Time and again, we see governors rushing to sign MoUs with firms that often have little or no real presence in Nigeria—some without a registered local office, others with a patchy track record at best. These flashy signings are presented as evidence of visionary leadership, but more often than not, they are a lackluster display of showmanship—governance performed for optics, not outcomes.
It’s a trend that mirrors what has happened abroad. In the United States, for example, the now-infamous Foxconn deal in Wisconsin promised thousands of jobs and billions of dollars in investment in exchange for billions of dollars in state subsidies. Years later, the promised jobs never materialized, and the state was left footing the bill for largely empty facilities.
In his report “The Realities of Economic Development Subsidies,” Andrew Schwartz shows how such corporate deals are typically oversold. Many companies would have made the same investment even without subsidies, and the actual cost per job often exceeds reasonable limits. Meanwhile, governments quietly cut budgets for schools, hospitals, and infrastructure to fund these incentives—a sacrifice that rarely gets mentioned in press releases.
Closer to home, Nigeria’s obsession with attracting investors through subsidies and tax waivers is just as problematic. These handouts are often poorly negotiated, barely tracked, and frequently fail to produce the promised outcomes. Too much faith is placed in what’s written on paper and not enough in what’s built on the ground.
As Robert G. Lynch’s landmark study, Rethinking Growth Strategies from the Economic Policy Institute, demonstrates, state and local tax cuts—when funded by cuts to public services—do not stimulate economic growth. On the contrary, cutting education, transportation, and healthcare to finance corporate tax incentives leads to job losses, not gains.
Governments that prioritize real development invest in public goods. Roads, schools, energy infrastructure, clean water—these are the pillars that attract sustainable investment. They don’t vanish when a company pulls out. They stay with the people and serve as the foundation for long-term prosperity.
But instead, what we are witnessing in Nigeria is a desperate race among governors to ink MoUs, each eager to showcase some foreign partner as proof of progress. These documents are then paraded in the media as if the deal has already transformed the economy. Rarely is there follow-up. Rarely is there transparency. And rarely is there an honest accounting of what it costs the people.
The real danger is not just in the waste of resources, but in what these practices displace. For every naira spent on subsidizing a speculative investor, there is one less for public hospitals that save lives, for schools that educate future workers, and for transport systems that support small businesses.
And while elite companies enjoy tax holidays and duty waivers, local entrepreneurs and SMEs—those who actually drive the bulk of Nigeria’s economy—are left to navigate high levies, erratic power, and poor infrastructure. This is not development. It is a distortion.
We cannot continue down this path. Nigeria’s future will not be built on MoUs alone. It will be built by investing in our people, in their education, in their health, in their capacity to create, innovate, and compete.
As the evidence from both Schwartz and Lynch makes clear, governments that focus on strong public services, not flashy subsidies, deliver more stable jobs and lasting growth. The lesson is simple: if you build solid foundations, investors will come, not for tax holidays, but for opportunities.
Newspot Nigeria believes it’s time for a reset. Our leaders must move away from ceremonial governance and instead focus on substance. We must demand transparency, value‑for‑money assessments, and real delivery, not just handshakes and headlines.
The stakes are too high for gimmicks. Let’s build a Nigeria that attracts investment because it works, not because it waves a tax‑free flag.
–– Editorial Desk, Newspot Nigeria
Further Reading:
- Andrew Schwartz, “The Realities of Economic Development Subsidies,” Center for American Progress (Read here)
- Robert G. Lynch, Rethinking Growth Strategies, Economic Policy Institute (Center for American Progress)
Disclaimer: This editorial reflects the considered position of the Newspot Nigeria Editorial Desk and is published in the public interest.
