Nigeria introduces new tax incentives to draw gas investments

• A government official said that Nigeria anticipates receiving up to $10 billion in fresh investments for deep-water gas development
• The source believes this can be achieved through tax breaks and other policies specified under a new corporate regulatory framework
• The objective of the new policy framework is to expedite progress in Nigeria's offshore gas industry

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Through tax concessions and other measures outlined in a new regulatory framework for the business, Nigeria expects to draw up to $10 billion in new investments in deep-water gas exploration, a government official said.

Nigeria plans to provide greenfield projects in onshore and shallow-water areas a permit to produce gas. Photo Credit: FG, Sean Gallup
Source: UGC

As stated earlier this week by President Bola Tinubu, the framework has been accepted by the Federal Executive Council and will now be sent to the National Assembly for enactment.

According to a statement released on Thursday by Tinubu's special adviser Olu Verheijen, the new policy framework aims to accelerate advancements in Nigeria's offshore gas sector, where an estimated 67% of the resource is yet unexplored. Tax credits are offered for new investments.

The documents reviewed by Bloomberg revealed that the largest crude producer in Africa also intends to provide a gas output permit for greenfield projects in onshore and shallow-water regions that begin production by January 1, 2029.

“We intend to unlock between $5 billion to $10 billion of new investments in Nigeria in the near- to medium-term,” Verheijen said.

According to Verheijen, who also serves as the head of the Energy Office of the Presidency, if the policy is approved by law, it will accelerate the development of natural gas, replace fossil fuels in transportation, and increase the nation's energy security.

In the upcoming years, global corporations are projected to invest $90 billion in deep-water oil and gas projects.

She said. “This is the pool of funds that our reforms are targeting.”

Tinubu claimed that since taking office in May 2023, he has carried out a number of reforms that have drawn in over $30 billion in foreign direct investment.

Although international investors have praised the policy change, the most populous country in Africa is experiencing a cost of living issue as a result of it, which has led to violent riots.

FG moves to crash diesel, CNG, cooking gas prices

Legit.ng reported that the Nigerian government has announced the removal of Value Added Taxes (VAT) for different energy products, including cooking gas, diesel, and compressed natural gas (CNG).

The development is contained in a statement by the Minister of Finance, Wale Edun, on Wednesday, October 2, 2024.

The minister disclosed that the measures aim to reduce the cost of living, boost energy security, and accelerate Nigeria’s shift to cleaner energy.

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Source: Legit.ng