Nigeria defies Africa downturn, tops upstream investment with $5.3bn

Mkpoikana Udoma

Port Harcourt — Nigeria has emerged as Sub-Saharan Africa’s leading upstream oil and gas investment destination in 2025, attracting $5.3 billion in capital despite an 18 per cent decline in upstream spending across the region, underscoring the impact of recent fiscal and regulatory reforms.

Industry intelligence firm, Wood Mackenzie, disclosed that Nigeria retained the top spot for upstream capital inflows, even as investment activity slowed sharply across Africa.

Notably, only two Final Investment Decisions, FIDs, were recorded across Sub-Saharan Africa in 2025, with Nigeria securing one of them.

The FID was reached on the Shell–Sunlink HI Field (OML 144), a shallow-water non-associated gas project, following the introduction of Nigeria’s Non-Associated Gas, NAG, incentives in 2024.

The incentives restored the project’s commercial viability and unlocked critical gas feedstock for Nigeria LNG Limited, NLNG.

According to Wood Mackenzie, the project signals a clear shift in investor confidence.

“Nigeria’s NAG incentives have materially improved gas economics, enabling projects that were previously marginal to reach FID,” the firm noted.

The latest investment milestone marks a sharp turnaround from previous years.

Between 2015 and 2023, Nigeria captured just 4 per cent of Africa’s sanctioned FIDs, securing $5 billion across six of 44 projects.

However, over the last two years, Nigeria has attracted 38 per cent of Africa’s sanctioned FIDs, accounting for $8 billion across five of eight projects continent-wide.

“This reversal highlights the impact of decisive reforms implemented over the past 24 months,” Wood Mackenzie said, adding that Nigeria now offers “among the most competitive deep-water fiscal terms globally and the most attractive gas terms in Africa.”

Looking ahead, the firm expressed optimism that Nigeria will sustain the momentum into 2026. “With targeted incentives and a stable, investor-focused policy framework, we expect additional FIDs to be sanctioned,” it stated.

The resurgence positions Nigeria as a standout destination for upstream oil and gas investment at a time when capital discipline and policy uncertainty continue to weigh on much of Sub-Saharan Africa.