US tech investors are facing serious challenges in Nigeria and Kenya due to corruption, weak intellectual property (IP) protection, and tough digital tax laws. These issues are making it harder for companies like Google, Amazon, Meta, and Netflix to operate smoothly in both countries.
According to the US Trade Representative (USTR)’s Foreign Trade Barriers report, both countries have failed to keep promises to improve transparency and protect IP rights. In Nigeria, the report says counterfeit software, pirated movies, and music are widespread. Jamieson L. Greer, a USTR official, blamed weak enforcement, porous borders, and corruption for the problem.
The report also noted that US companies in Nigeria often face pressure to pay bribes just to keep operations running. Corruption and lack of political unity continue to block progress on reforms in Nigeria’s justice system.
In Kenya, while the country has done more to support startups, investors still face challenges. The report said that bribery remains a major concern. It also said that US companies lose deals to competitors who break rules or pay bribes.
Kenya signed the WIPO Copyright Treaty nearly 30 years ago but hasn’t ratified it. This legal gap allows copyright violations to go unchecked, according to the USTR.
Tax Changes Worry Tech Firms
New tax laws in both countries have added to US investors’ worries. In December 2024, Kenya replaced its old digital services tax with a new 3% “significant economic presence tax.” It applies to companies earning over KES 5 million (about $38,800) a year from Kenyan users—even if they have no office in the country.
In Nigeria, since 2020, non-resident digital companies have had to pay income and VAT taxes. These tax rules are raising compliance costs for US firms.
This report comes at a time when US President Donald Trump is threatening higher tariffs. He has paused those plans but warned countries like Nigeria and Kenya to drop trade barriers by June.
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