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Implications of relaxed FCPA enforcement in Nigeria 17 Mar 2025

The decision by U.S. President Donald Trump to ease enforcement of the Foreign Corrupt Practices Act (FCPA) has sparked significant concern, particularly in countries like Nigeria, where corruption remains a pervasive challenge. The FCPA, enacted in 1977, has long been a cornerstone of global anti-corruption efforts, requiring U.S. companies to adhere to strict anti-bribery standards when conducting business abroad. By relaxing its enforcement, the U.S. risks undermining decades of progress in combating corporate misconduct globally.

On 10 February 2025, President Trump signed an executive order (EO) titled "Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security." The EO paused all future investigations and enforcement actions under the FCPA for at least 180 days. It directed the U.S. attorney general to resolve existing FCPA investigations or enforcement matters, taking into account the current administration's foreign policy objectives, and issue updated FCPA guidelines or policies.

The EO contends that "overexpansive and unpredictable FCPA enforcement against American citizens and businesses – by our own Government – for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security." Should other countries respond with this same logic, Trump’s MAGA (Make America Great Again) slogan could end up making bribery and corruption great globally.

The FCPA has historically served as a deterrent against corporate bribery, particularly in sectors like oil and gas, telecommunications, and infrastructure, where illicit payments are often used to secure contracts. It has played a critical role in holding multinational corporations accountable for corrupt practices in Nigeria. A notable case is the 2010 settlement involving Siemens AG, which paid $1.6 billion in fines to U.S. and German authorities for bribing Nigerian officials to win contracts in the telecommunications sector. Such enforcement actions have sent a strong message to corporations that bribery would not be tolerated, even in countries where corruption is endemic.

According to Holland & Knight LLP, in 2024 alone, the U.S. Department of Justice collected billions of dollars in fines and penalties under FCPA enforcement. While such enforcement action indicates the magnitude of the problem, it nevertheless serves as a strong deterrent to corrupt practices.

By relaxing FCPA enforcement, the U.S. risks sending the opposite message: that anti-corruption is no longer a priority. This could have repercussions in Nigeria’s extractive industries, where U.S. firms are heavily involved. For instance, in the oil and gas sector, where competition for lucrative contracts is fierce, companies may feel emboldened to offer bribes to secure deals. This could exacerbate corruption, undermining the efforts of Nigerian agencies like the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC), which are already struggling to combat graft.

Over the past decade, Nigeria has made significant strides in addressing corruption, often with the support of international frameworks like the FCPA. Successive administrations have introduced policies aimed at reducing corporate malfeasance and promoting transparency. For example, President Muhammadu Buhari signed the Proceeds of Crime Act into law in May 2022, providing a legal framework for recovering and managing assets acquired through illicit means. Similarly, the Nigerian Anti-Corruption Strategy (NACS) 2022-2026 outlines a comprehensive plan to tackle corruption across various sectors.

These reforms were developed with the expectation that global enforcement mechanisms like the FCPA would reinforce local efforts. However, with the U.S. stepping back from its role as a global anti-corruption enforcer, there is less incentive for Nigeria’s political elite to sustain these reforms. Multinational corporations operating in Nigeria may increasingly resort to bribery, knowing the risk of U.S. legal action has diminished. This could reverse progress in transparency and governance, eroding public trust in institutions and undermining Nigeria’s long-term development goals.

Relaxed FCPA enforcement also creates an uneven playing field for businesses operating in Nigeria. Ethical U.S. firms that adhere to anti-bribery standards may be disadvantaged against competitors willing to engage in corrupt practices. For example, a U.S. company bidding for a construction contract in Nigeria may lose out to a rival firm that offers bribes to secure the deal. This disadvantages compliant companies and discourages future investment from firms that prioritise good corporate governance and transparency.

The FCPA previously ensured a level playing field by holding all U.S. companies to the same anti-bribery standards. However, without consistent enforcement, the competitive landscape could shift in favour of less scrupulous actors. This could deter ethical businesses from entering the Nigerian market, further entrenching corruption and limiting the country’s economic potential.

While the FCPA rollback is concerning, it is important to note that other international anti-corruption frameworks remain in place. For example, the UK Bribery Act and France’s Sapin II impose strict anti-bribery requirements on companies operating abroad. U.S. firms in Nigeria could still face prosecution under these laws if they engage in corrupt practices. Additionally, Nigeria has demonstrated a willingness to prosecute multinational corporations for corruption, as seen in the Malabu oil scandal, where Shell and Eni were accused of bribing Nigerian officials to secure a lucrative oil block.

However, there are concerns about the feasibility of enforcing these laws without U.S. support. The U.S. wields significant influence in global anti-corruption efforts, and its withdrawal from this role could weaken international enforcement mechanisms. While other countries may advance their efforts, the absence of U.S. leadership could create a vacuum that undermines the global fight against corruption.

Trump’s decision to relax FCPA enforcement also has broader implications for U.S.-Nigeria relations, particularly in governance and anti-corruption cooperation. Over the years, the U.S. has worked closely with Nigeria to recover stolen assets, strengthen institutional oversight, and promote transparency in public and private sector dealings. For example, the U.S. Department of Justice has assisted Nigeria in recovering millions of dollars looted by former dictator Sani Abacha, which were stashed in foreign banks.

The U.S. is sending a contradictory message to Nigeria by weakening the FCPA. On one hand, it encourages Nigeria to fight corruption, while on the other, it signals that American businesses no longer need to play by the rules. This could strain bilateral relations and undermine trust between the two countries. Nigerian civil society groups, which have relied on global advocacy to hold corrupt officials accountable, may view this as an abandonment of ethical leadership, potentially weakening Nigeria’s resolve to tackle corporate corruption.

Perhaps the most concerning implication of relaxed FCPA enforcement is its potential impact on Nigeria’s investment climate. Corruption remains one of the biggest deterrents to foreign direct investment, as it increases operational costs and creates an unpredictable business environment. If Nigeria becomes more deeply associated with corporate bribery due to the FCPA rollback, foreign investors – particularly those from regions with stringent compliance requirements – may hesitate to enter the market.

This could be especially damaging to sectors like technology and renewable energy, where Nigeria is looking to attract long-term investment. Nigeria’s efforts to transition to renewable energy sources could be hindered if investors perceive the country as a high-risk environment for corruption. Similarly, Nigerian businesses seeking to establish international partnerships based on ethical standards may be sidelined if corruption becomes the norm.

Ultimately, while the FCPA rollback may offer U.S. companies short-term relief, it poses serious long-term risks for Nigeria. It could deepen corruption, weaken governance, and damage investor confidence. It also raises questions about how Nigeria can sustain anti-corruption efforts without external enforcement. Nevertheless, the country must strengthen its domestic frameworks to prioritise corporate accountability to address these challenges, regardless of U.S. policy shifts.

Nigeria could enhance the capacity of its anti-corruption agencies, improve transparency in public procurement processes, and promote whistleblower protections. Additionally, Nigerian lawmakers could enact stricter penalties for corporate bribery and ensure that enforcement mechanisms are robust and independent. By taking these steps, the country can reduce its reliance on external enforcement and build a more resilient anti-corruption framework.

The relaxation of FCPA enforcement represents a significant setback in the global fight against corruption. Nigeria must prioritise domestic anti-corruption efforts and strengthen its institutional frameworks to curb graft. Without decisive action, the country risks further entrenching bribery and unethical practices, with dire consequences for development and governance.

Cheta Nwanze is Lead Partner at SBM Intelligence.