- Nigeria is introducing new fiscal incentives and regulatory reforms to attract investment and boost its oil, gas, and power sectors.
- The Nigerian government aims to improve energy security and reduce costs by streamlining approval processes and enhancing sector infrastructure.
Nigeria is positioning itself to become a more attractive destination for energy investment by launching several critical reforms to revitalise its oil, gas, and power sectors.
Abiodun Oladunjoye, Director of Information at the State House, shared insights from a speech delivered by Verheijen, a government representative, at the African Petroleum Producers Organization’s (APPO) 19th Executive Board meeting in Yaoundé, Cameroon. Verheijen outlined the country’s strategy to attract capital, improve sector performance, and address long-standing investment challenges.
Despite Nigeria’s vast oil and gas reserves, Verheijen acknowledged that the country has historically underperformed in production, with countries like Brazil holding only 30% of Nigeria’s oil reserves—producing 131% more oil. She attributed this gap to underinvestment and highlighted Nigeria’s declining share of African oil and gas investments.
Since 2016, Nigeria has attracted just 4% of the continent’s oil and gas capital, while other African nations have drawn significantly more significant amounts. Verheijen pointed out that international oil companies (IOCs) have committed over $82 billion to deepwater projects outside Nigeria since 2013, underscoring the need for reforms to reverse this trend.
In response, Verheijen emphasised the Nigerian government’s ongoing efforts to overhaul the sector, including introducing fiscal incentives for deep offshore oil and gas projects and the first-ever fiscal framework for deepwater gas.
These measures aim to make Nigeria more competitive in attracting international investment. Additionally, the government is working closely with the National Security Adviser’s office to improve security for oil and gas operations, a key concern for investors.
Verheijen also outlined efforts to streamline Nigeria’s notoriously complex and lengthy approval processes, which have historically raised costs for investors. The government is targeting a reduction in the average contracting timeline from 38 months to just 135 days, as well as eliminating the 40% cost premium that has made Nigeria one of the more expensive places to operate in the oil and gas sector. “These changes will be game-changers for the industry,” Verheijen said.
Beyond oil and gas, Verheijen detailed Nigeria’s broader energy strategy, which includes significant investments in the midstream and downstream sectors such as Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and electric vehicles (EVs).
These efforts are part of the Presidential Gas for Growth Initiative, which aims to reduce Nigeria’s reliance on traditional fuels like petrol and diesel, particularly in sectors like heavy transport and cooking. The initiative also seeks to stimulate demand for electric vehicles through fiscal incentives, creating new investment opportunities.
In terms of broader energy reforms, Nigeria has already unlocked over $1 billion in investments across various energy subsectors, and the government expects to see final investment decisions (FID) on two significant projects by mid-2025, including a multi-billion-dollar deepwater exploration project—the first in over a decade.
Verheijen also highlighted the government’s plans to improve Nigeria’s power sector, targeting reliable electricity for urban areas and industrial hubs with up to 20 hours of electricity daily by 2027. Initiatives like deploying seven million smart meters, expanding off-grid solutions, and addressing legacy debts are expected to drive these improvements.
Verheijen also touched on macroeconomic reforms under President Bola Tinubu’s leadership, noting that removing fuel subsidies and liberalising foreign exchange policies are crucial steps to unlocking Nigeria’s economic potential. “Nigeria is poised for unprecedented growth,” she said. “We are implementing reforms that will create jobs, attract investments, and ensure energy security.”
Verheijen’s remarks underline Nigeria’s commitment to reasserting itself as a global energy leader while creating a more sustainable and competitive environment for investment. With substantial resources and ongoing reforms, Nigeria’s energy sector is poised for growth, with the potential to reclaim its position as Africa’s dominant energy player.