Nigeria has emerged as the number one destination for energy investments in Africa over the past two years, driven by sweeping reforms introduced by President Bola Tinubu's administration, a new government report has revealed.

The report obtained by our correspondent on Monday, detailing a three-year review of Nigeria's energy sector reforms from 2023 to 2026, showed that the country attracted a surge in capital inflows, reversing years of decline caused by policy uncertainty and underinvestment.

According to the document, Nigeria's share of upstream Final Investment Decisions (FIDs) in Africa rose sharply from four per cent to about 40 per cent between 2024 and 2025, positioning the country ahead of traditional competitors on the continent.

The report, endorsed by the Presidency and attributed to the office of the Special Adviser to the President on Energy, Olu Verheijen, stated: "In the last two years, Nigeria has become the number one destination for capital in Africa, underpinned by President Bola Ahmed Tinubu's energy reforms.

At a time when global upstream investment was tightening, Nigeria reversed years of decline, emerging once again as a leading destination for energy capital in Africa."

It added, "The result has been a renewed pipeline of over $10 billion in Final Investment Decisions, particularly in deep offshore and integrated gas, restoring Nigeria's attractiveness to international oil companies in capital-intensive, long-cycle projects."

The reforms, anchored on multiple executive orders and policy directives, focused on improving fiscal terms, strengthening regulatory clarity, and accelerating project approvals. Among the key interventions were directives clarifying the roles of the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, as well as tax incentives targeted at deep offshore oil production and gas development.

Other measures included cost-efficiency reforms, VAT modifications, and policies aimed at safeguarding government revenue while enhancing investor returns.

The report noted that these reforms significantly reduced contracting timelines and improved cost structures, thereby restoring investor confidence in the sector.

It stated, "From the outset, the President established a clear direction: to restore credibility, unlock investment, and reposition energy as a driver of growth, jobs, and prosperity. The reforms captured in this report reflect that governing philosophy: market-oriented, fiscally responsible, and anchored in disciplined execution."

A major outcome of the policy shift was the completion of about $4 billion worth of divestments by international oil companies, which transferred onshore and shallow-water assets to indigenous firms. These included transactions involving Shell, ExxonMobil, Agip, and Equinor, now operated by local players such as Renaissance, Seplat, Oando, and Chappal.

According to the report, "A deliberate programme of divestments has enabled the transfer of onshore and shallow-water assets to capable indigenous independents, unlocking record growth in onshore production and creating a more balanced, performance-driven asset ownership structure."

The impact of the reforms is reflected in Nigeria's oil production figures, which rose from about 1.2 million barrels per day in 2023 to approximately 1.6 million barrels per day in 2025, an increase of about 400,000 barrels per day and the highest onshore production level recorded in two decades. The report further projected a long-term production target of three million barrels per day, driven by renewed investments and improved operating conditions.

Beyond asset transfers, the sector has also witnessed a resurgence in capital inflows, with over $10 billion in upstream investments recorded after nearly a decade of stagnation. Key projects driving this recovery include the $5 billion Bonga North deepwater development, the $550 million Ubeta gas project, and the $100 million Iseni gas project.

It added that a robust pipeline of future investments is already taking shape, with over $50 billion in projected upstream projects. "These include major developments such as Bonga South West, Zaba Zaba, Owowo, Nsiko, Preowei, Bosi, Erha, and Usan, among others. Together, they represent a strong pipeline capable of sustaining production growth and long-term sector stability," the report said.

In the gas segment, utilisation rose significantly from 2.33 billion standard cubic feet per day in 2023 to 3.25 billion standard cubic feet per day in 2026, reflecting a 40 per cent increase. The report emphasised that gas has become central to Nigeria's economic strategy, positioning it as a transition fuel and a driver of industrialisation.

"With the right fiscal incentives and regulatory clarity in place, investment has accelerated across non-associated gas, LNG, petrochemicals, and emerging clean energy solutions. Gas is now firmly positioned not only as a transition fuel but as a foundation for industrialisation, export growth, and domestic value creation," it stated.

Domestic gas supply also recorded steady growth, while export volumes rose by 39 per cent, underscoring the increasing role of gas in Nigeria's energy mix and industrial strategy. The report emphasised that gas investments, including the $2 billion HI Non-Associated Gas Project, are positioning Nigeria as a key player in global gas markets and supporting domestic industrialisation.

In the downstream segment, local refining capacity has improved markedly, with Premium Motor Spirit production rising from near zero levels in 2023 to 48.2 million litres per day in 2026, while Automotive Gas Oil output reached 17.16 million litres per day. The report highlighted that the increase in local refining has contributed to the elimination of petrol queues across the country over the past three years.

"Local refining capacity has more than doubled, with significant increases in PMS and AGO production. This has improved fuel availability and eliminated queues, enhancing energy security and economic stability," it stated.

The combined impact of these reforms has significantly improved Nigeria's competitiveness within Africa's energy landscape. According to the report, Nigeria's share of upstream Final Investment Decisions on the continent surged tenfold, rising from four per cent between 2014 and 2023 to about 40 per cent between 2024 and 2025. This places Nigeria ahead of other African oil-producing countries such as Angola, Algeria, and Mozambique in attracting new investments.

"Regional and global competitiveness has improved significantly, with Nigeria emerging as the number one destination for oil and gas investments in Africa. The country's share of upstream FIDs increased from four per cent to 40 per cent, reflecting renewed investor confidence," the report added.

The report further highlighted progress in the power sector, where the government launched a comprehensive debt reduction programme to address liquidity challenges and restore investor confidence. It noted, "Through rigorous verification, negotiated settlements, and a credible bond-backed framework, the programme is resolving legacy obligations and re-establishing the financial credibility required for sustained investment."

Nigeria's energy sector has historically struggled with underinvestment, regulatory uncertainty, and infrastructure deficits, limiting its contribution to economic growth despite vast oil and gas resources. However, since 2023, the Tinubu administration has introduced a series of coordinated reforms aimed at repositioning the sector as a major driver of economic development. These include fiscal incentives, regulatory restructuring, security interventions in oil-producing regions, and policies to boost gas utilisation and power sector stability.

The latest report suggests that these measures are beginning to yield results, with Nigeria not only attracting fresh capital but also regaining its competitive edge in Africa's energy investment landscape.

The divestment of assets by IOCs and the entry of local firms mark a significant shift in the industry's structure, with potential implications for production efficiency, revenue generation, and local capacity development. Sustaining these gains will depend on continued policy consistency, improved security, and the ability of indigenous operators to efficiently manage the acquired assets while attracting further investment.