Global energy agency says Nigeria remains among Africa’s top investment destinations as new producers intensify competition for capital……
Nigeria has maintained its position as one of Africa’s leading destinations for oil and gas investment despite a steep decline in upstream spending across the continent, according to the International Energy Agency (IEA).
In its 2026 World Energy Investment Report, released on Tuesday, the agency said Nigeria, alongside Algeria, Angola, Egypt and Libya, continues to dominate Africa’s upstream industry, accounting for 70 per cent of total upstream investment and 80 per cent of the continent’s crude oil and gas production.
The report, however, revealed that Africa’s upstream oil and gas investment has almost halved over the past decade, falling from $68 billion in 2016 to $37 billion in 2025, highlighting growing challenges facing the continent’s traditional energy producers.
According to the IEA, while the five major producers remain the backbone of Africa’s petroleum industry, they have collectively experienced a sharp decline in investment as capital increasingly shifts toward newer oil and gas frontiers.
“Investment in the region remains highly concentrated, with five countries—Algeria, Angola, Egypt, Nigeria and Libya—accounting for 70 per cent of investment and 80 per cent of production,” the agency said.
It added that investment across the five established producers dropped from $50 billion in 2016 to $25 billion in 2025, reflecting declining competitiveness and fewer investment opportunities in mature oil assets.
At the same time, emerging producers are attracting growing investor interest.
The report showed that upstream investment in Mozambique, Namibia, Senegal and Uganda climbed from $1.5 billion in 2016 to $5 billion in 2025 as international energy companies committed fresh capital to large-scale deepwater and liquefied natural gas (LNG) projects.
According to the IEA, these newer markets are benefiting from the development of capital-intensive projects that require higher investment relative to current production levels.
Despite weaker overall investment, exploration activity across Africa remained resilient. The agency estimated exploration spending reached nearly $6.5 billion in 2025, driven by continued appraisal of recently discovered hydrocarbon basins.
The report noted that exploration remains inherently risky, with national oil companies playing an increasingly important role. However, it warned that limited government revenues in many producing countries are constraining the ability of state-owned energy firms to finance major upstream projects.
As a result, African producers are becoming more dependent on partnerships with international oil companies and alternative financing arrangements to fund exploration and production activities.
The IEA added that private and multinational energy companies continue to provide the bulk of upstream investment across the continent, supplying not only capital but also technical expertise and project execution capabilities. National oil companies, it said, account for roughly one-quarter of total upstream capital expenditure.
Looking ahead, the agency expects upstream investment in sub-Saharan Africa to recover in 2026 after last year’s slowdown. It projects investment will increase by 12 per cent to approximately $24 billion, following an 18 per cent decline recorded in 2025.
Part of that recovery is expected to come from new projects led by international oil majors, including BP’s investments in Angola and Namibia through the Azule Energy joint venture.
Nigeria is also expected to remain a key beneficiary of future investment, with the IEA pointing to ongoing deepwater developments and expanding LNG projects as major growth drivers.
“LNG supply development continues in both Nigeria and Mozambique by a variety of majors and local companies,” the report stated, adding that deepwater projects involving international partners are expected to strengthen Nigeria’s long-term production outlook.
Beyond hydrocarbons, the report highlighted Africa’s growing role in the global energy transition through increased investment in critical minerals.
According to the IEA, Africa’s share of global critical minerals investment has risen from 14 per cent to 19 per cent over the past decade, while greenfield mining investment doubled from around $3.5 billion in 2016 to just over $7 billion in 2024.
Most of the increase has been driven by copper projects in the Democratic Republic of Congo, Morocco and Zambia, while investment in lithium mining also expanded significantly in 2024.
However, the agency cautioned that Africa continues to capture only a fraction of the value generated from its mineral resources due to weak investment in local refining and processing facilities.
Although several African countries have introduced export restrictions to encourage domestic value addition, downstream investment has risen only modestly. The report identified inadequate infrastructure, unreliable electricity supply, water shortages and skills gaps as major barriers to developing competitive mineral processing industries.
For Nigeria, the findings come as the Federal Government intensifies efforts to attract fresh upstream investment following years of declining capital inflows linked to oil theft, insecurity, regulatory uncertainty and delayed project approvals.
Since the enactment of the Petroleum Industry Act in 2021, authorities have introduced fiscal incentives, licensing reforms and tax measures aimed at improving investor confidence and boosting production.
The Nigerian Upstream Petroleum Regulatory Commission has set ambitious targets to raise crude oil production to 2 million barrels per day by 2027 and 3 million barrels per day by 2030, while accelerating gas development through deepwater projects, floating LNG facilities and non-associated gas fields.
While the latest IEA report reinforces Nigeria’s position as one of Africa’s leading oil and gas investment destinations, it also highlights growing competition from emerging producers that are rapidly attracting international capital.
