President Tinubu Reforms Reverse Decade of Decline, Propel Nigeria to 40% Share of Africa’s Upstream FIDs
Strategic economic and energy sector reforms initiated by President Bola Ahmed Tinubu’s administration have successfully reversed a decade-long erosion of investor confidence in Nigeria, driving a dramatic surge in capital inflows and positioning the country as Africa’s premier destination for upstream oil and gas investment.
According to Nigeria’s Energy Sector Reforms 2023-2026: A Three-Year Review, released by the Office of the Special Adviser to the President on Energy under Mrs. Olu Arowolo Verheijen, Nigeria’s share of Africa’s upstream Final Investment Decisions (FIDs) has skyrocketed from just 4% (2014–2023) to approximately 40% (or 39% in some references) between 2024 and 2025 — a tenfold increase.
This turnaround comes after years of underperformance. Despite holding Africa’s second-largest proven oil reserves (37.5 billion barrels), Nigeria lagged behind peers like Algeria (44% share) and Angola (26%) in FIDs during the prior decade. Production had slumped, dipping below 1 million barrels per day (bpd) in Q3 2022 amid regulatory uncertainty, underinvestment, and security challenges.
Key Drivers of the Revival
President Tinubu’s administration acted decisively across multiple fronts:
• Fiscal and Regulatory Clarity: Executive directives clarified jurisdictional boundaries between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Targeted tax incentives for deep offshore projects, VAT modifications, and cost-efficiency orders improved project economics. Contracting timelines at NNPC Ltd were slashed from up to 36 months to a maximum of six.
• Asset Divestments and Indigenous Participation: Accelerated approvals enabled four major IOC divestments worth about $4 billion, transferring onshore and shallow-water assets to local operators including Renaissance (Shell), Seplat (ExxonMobil), Oando (Agip), and Chappal (Equinor). This shift contributed to a production rebound of roughly 400,000 bpd, reaching around 1.6–1.7 million bpd.
• Major Projects Sanctioned: Notable FIDs include Shell’s $5 billion Bonga North deepwater development and $2 billion HI Non-Associated Gas project, alongside TotalEnergies’ $550–566 million Ubeta gas project. Nigeria secured multiple major FIDs in 2024–2025, with 28 new Field Development Plans approved in 2025 alone, valued at $18.2 billion and targeting 1.4 billion barrels of reserves.
These moves have unlocked over $10 billion in committed upstream investments, with a robust $50 billion pipeline extending beyond 2026. Broader energy sector commitments under the reforms reportedly total around $60 billion.
Broader Investor Confidence
The energy sector gains mirror wider improvements in capital inflows. Foreign portfolio and direct investments have risen sharply, with reports of 67–90%+ year-on-year surges in various periods of 2025, supported by foreign exchange reforms, subsidy removal, and improved macroeconomic stability. Nigerian stocks and the broader capital market have also rallied, reflecting renewed optimism.
NJ Ayuk, Executive Chairman of the African Energy Chamber, praised the reforms: “When a government rebuilds fiscal competitiveness and regulatory predictability at the same time, capital responds.”
Analysts note that sustained execution of the deepwater projects and maintenance of the enabling policy environment will be critical to achieving long-term targets, such as 3 million bpd production. Nevertheless, the momentum marks a significant generational shift for Nigeria’s upstream sector and its role as an engine of economic growth under the Renewed Hope Agenda.
