Nigeria’s oil and gas sector recorded a sharp rebound in foreign capital inflows in 2025, with fresh investments rising to $17.98 million from $5.12 million a year earlier, underscoring renewed interest in the country’s hydrocarbon industry as policymakers intensify their push for gas-led growth.
The latest figures from the National Bureau of Statistics (NBS) show that capital inflows into the sector more than tripled year-on-year, even as the broader Nigerian economy saw a strong recovery in foreign capital importation. Total capital inflows into the country climbed to $6.01 billion in the third quarter of 2025 alone, a 380.16 percent jump from the corresponding period of 2024.
The improvement in the oil and gas segment, though modest in absolute terms, points to a gradual restoration of investor confidence after years of policy uncertainty, foreign exchange constraints, and security concerns in producing regions.
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This recovery has been largely buoyed by natural gas.
Gas export earnings rose 21 percent to $10.51 billion in 2025 from $8.66 billion in 2024, according to Central Bank of Nigeria data cited in the report, reinforcing the sector’s growing role as a critical source of foreign exchange. This comes as Nigeria increasingly positions gas as a transition fuel and a strategic economic asset amid the global energy transition.
The renewed investor appetite also coincides with a series of policy reforms aimed at improving the investment climate.
Most recently, the Central Bank of Nigeria eased foreign exchange rules for oil exporters, allowing international oil companies to retain and repatriate 100 percent of their export proceeds immediately, a move widely seen as designed to improve liquidity and restore confidence in the market. The policy shift forms part of broader reforms to deepen the FX market and attract investment.
For years, access to foreign exchange and restrictions on dollar repatriation have ranked among the biggest deterrents to large-scale upstream and midstream investments. By removing the previous cash-pooling rule, the CBN has effectively reduced one layer of risk for foreign operators and financiers.
The latest inflow numbers also align with the Federal Government’s long-running “Decade of Gas” strategy, which seeks to monetize Nigeria’s vast reserves and shift emphasis from crude dependence to gas-led industrialization.
Nigeria holds more than 200 trillion cubic feet of proven gas reserves, among the largest in Africa, yet a substantial portion remains commercially undeveloped. The Nigerian Upstream Petroleum Regulatory Commission’s recent Gas Development Roadmap, targeting the commercialization of over 55 trillion cubic feet of stranded reserves, is intended to unlock investment across exploration, processing, pipeline infrastructure, and export terminals.
The Nigerian National Petroleum Company Limited has set even more ambitious targets, saying it plans to expand reserves to 600 trillion cubic feet and attract as much as $60 billion in sectoral investment over time. Its Gas Master Plan 2026 aims for daily production of 10 billion cubic feet, with the objective of supporting domestic industrialization, power generation, and export earnings.
Still, the headline increase in inflows needs to be read with caution. While the jump from $5.12 million to $17.98 million is statistically significant, the absolute amount remains extremely small for a sector that historically accounts for the bulk of Nigeria’s export earnings and fiscal revenues.
By comparison, the country’s total capital importation runs into billions of dollars, with banking, financing, and portfolio flows continuing to dominate foreign investment receipts.
This suggests that the oil and gas sector’s recovery, while encouraging, remains in its early stages.
Analysts say the modest scale of inflows relative to Nigeria’s resource base highlights persistent structural issues, including pipeline vandalism, oil theft, delayed project closures, and investor caution toward long-cycle fossil fuel assets in an era of decarbonization.
That said, gas appears to be emerging as the more resilient story.
With Europe and parts of Asia still seeking diversified LNG supplies, Nigeria’s gas assets are increasingly viewed as commercially attractive, especially where projects are tied to export infrastructure and domestic industrial demand.
The sector’s improving numbers also come against a backdrop of a broader shift in Nigeria’s export composition. Non-oil exports reportedly rose to N12.36 trillion in 2025 from N9.09 trillion in 2024, driven by agriculture, manufacturing, and solid minerals, indicating that while hydrocarbons remain central, the economy is slowly broadening its external earnings base.
The rise in inflows signals that reforms may be beginning to gain traction, particularly in gas. But the figures also underscore how much ground remains to be covered if Nigeria is to unlock the scale of investment required to fully monetize its hydrocarbon assets and strengthen external reserves.
In short, investor interest is returning, but the sector is still operating well below its capacity. The real test, economists note, will be whether policy stability, FX liberalization, and gas infrastructure development can convert this early rebound into sustained multi-billion-dollar inflows over the coming years.