NIGERIA emerged as Sub-Saharan Africa’s largest recipient of upstream oil and gas investment in 2025, pulling in $5.3 billion in capital expenditure even as total spending across the region fell by 18 percent, new figures from Wood Mackenzie show.

The country accounted for one of just two final investment decisions (FIDs) taken across Sub-Saharan Africa during the year, a sharp turnaround from its long-standing struggle to attract major energy investments on the continent.

A key highlight was the Shell-Sunlink HI Field in OML 144, a shallow-water, non-associated gas project that reached FID after the introduction of Nigeria’s Non-Associated Gas incentives in 2024. The incentives revived the project’s economics, paving the way for new gas supplies to Nigeria’s liquefied natural gas industry and advancing efforts to commercialise the country’s extensive gas resources.

Angola followed Nigeria in the investment rankings, recording upstream capital expenditure of more than $500 million. While spending in the nation was supported by projects led by the national oil company alongside major international operators, it remained well below Nigeria’s overall total.

The latest data signals a notable improvement in Nigeria’s competitive standing. Between 2015 and 2023, the country captured only 4 percent of Africa’s sanctioned FIDs, securing about $5 billion across six out of 44 projects. In contrast, over the past two years Nigeria has drawn 38 percent of African upstream investment, amounting to $8 billion across 5 of the 8 projects sanctioned continent-wide.

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According to Wood Mackenzie, this resurgence reflected a series of policy and fiscal reforms rolled out over the last two years. Nigeria now ranks among the most competitive deep-water jurisdictions globally and offers the most attractive gas fiscal terms in Africa.

These changes have helped ease long-standing investor concerns around regulatory uncertainty, contract stability and fiscal rigidity, which used to discourage international oil companies for much of the past decade. The 2024 gas incentives were designed specifically to unlock stalled developments, improving returns for projects aimed at boosting domestic gas supply.

Across the wider region, upstream activity remained subdued in 2025. Capital expenditure declined year-on-year, and only two FIDs were recorded, highlighting the difficulty African producers face in competing for global capital amid energy transition pressures and more attractive opportunities elsewhere.

Beyond Nigeria and Angola, countries including Congo, Mozambique, Uganda, Côte d’Ivoire, Ghana and Gabon each recorded upstream spending above $500 million. Mackenzie noted that Mozambique’s investments were largely concentrated in LNG projects, while Congo saw a broader mix spanning national oil company initiatives, major operators and mid-sized independents.

The dominance of Nigeria and Angola in regional spending underlines the role of mature infrastructure and stable fiscal systems in attracting investment. Both producers benefit from long histories of oil and gas development, extensive infrastructure networks and access to major export markets.

2026 Prospects

Wood Mackenzie expects Nigeria to record additional FIDs in 2026, supported by targeted incentives and a more predictable, investor-friendly policy environment. Analysts say the country’s recent gains are likely to endure as reforms continue to deliver results.

By pairing competitive fiscal terms with greater regulatory certainty, Nigeria has established what industry observers describe as a new baseline for its oil and gas sector, a marked departure from years of policy inconsistencies that eroded investor confidence.

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For other Sub-Saharan African producers, Nigeria’s rebound presents both a model and a challenge. Attracting upstream capital will require comparable fiscal competitiveness alongside efforts to address infrastructure gaps and above-ground risks.

Even so, the overall contraction in regional spending points to deeper structural pressures. As global energy firms channel more funds into lower-carbon assets, competition for conventional oil and gas investment is intensifying. Nigeria’s growing share of a shrinking pool of capital suggests that, in today’s environment, policy clarity and fiscal appeal are decisive in determining who wins scarce upstream dollars.

“It is an interesting report that shows how much a nation can achieve through economic reforms,” said a Kano-based economist, Mr Haruna Abubakar.

“The government must now sustain the reforms to reap bigger gains in 2026 and beynd.”