Nigeria is strategically positioning itself to attract up to $10 billion in investments for deep-water gas exploration by implementing a comprehensive set of tax incentives and other measures outlined in a newly approved policy framework. A government official revealed that the framework has been endorsed by the Federal Executive Council and is set to be submitted to the National Assembly for further legislative approval.
This innovative policy aims to catalyze growth in Nigeria’s offshore gas sector, where approximately 67% of the nation’s resources remain untapped and underdeveloped. It incorporates tax credits for new investments, as noted by Olu Verheijen, a special adviser to President Bola Tinubu. This focus on offshore gas exploration is critical for Nigeria, which holds significant reserves that could bolster its energy production capabilities.
In addition to tax incentives, the framework includes plans for a gas-production allowance aimed at new projects in onshore and shallow-water areas that commence operations by January 1, 2029. Such initiatives are intended to stimulate investment and foster a competitive environment for gas production, as detailed in documents reviewed by Bloomberg.
Verheijen expressed optimism regarding the initiative, stating, “We aim to unlock between $5 billion and $10 billion in new investments in the near to medium term.” This investment influx is expected to enhance Nigeria’s economic landscape and reinforce its status as a leading energy producer on the continent.
Once implemented, this policy is anticipated to expedite the development of natural gas resources, reduce the nation’s reliance on fossil fuels for transportation, and significantly strengthen Nigeria’s energy security. Verheijen, who also oversees the Energy Office of the Presidency, emphasized the critical nature of these reforms in attracting international investment and improving the overall economic climate.
Global companies are projected to allocate around $90 billion to deep-water oil and gas projects over the coming years, highlighting a significant opportunity for Nigeria to capture these investments and leverage its vast resource potential.
Since taking office in May 2023, President Tinubu has enacted a series of reforms aimed at increasing foreign direct investment, claiming to have secured over $30 billion thus far. However, while these reforms have garnered favorable responses from investors, they have also contributed to a rising cost of living in Nigeria, which has sparked widespread protests across the country, underscoring the need for a balanced approach to economic development and social stability.