Economy
NEITI Calls for Review of Oil Producing Agreements
By Modupe Gbadeyanka
The need to urgently review the Deep Offshore and Inland Basin Production Sharing Agreement between Nigeria and oil companies has been stressed by the Nigeria Extractive Industries Transparency Initiative (NEITI).
In a statement signed by its Director in charge of Communications and Advocacy, Dr Orji Ogbonnaya Orji, the agency explained that the urgency to review the obsolete legislation without further delay was in view of the revenue losses to the federation by the use of the old agreement in computation of revenues to be shared between the government and oil companies.
NEITI recalled that the Deep Offshore and Inland Basin Production Sharing Contracts Act of 1993 provides for: “ a review of the terms when prices of oil crosses $20 in real term; and a review of the terms 15 years after operation of the agreement and five years subsequently.”
However, NEITI said it observes with concern that Nigeria was yet to adhere to this important provision even now that the price of oil was revolving around $70 per barrel.
In an Occasional Paper released by NEITI which reviewed three years of NNPC’s financial and operations reports, NEITI has noted that crude oil production under the Production Sharing Contracts (PSCs) has since overtaken production under the Joint Venture arrangements.
A careful look shows that the Production Sharing Contracts (PSCs) accounted for 44.8 percent of total oil production while the Joint Ventures (JVs) contributed 31.35 percent.
A historical analysis of this development by NEITI shows that JV Companies accounted for over 97 percent of Production in 1998 while PSCs contributed only 0.50 percent.
This trend continued until 2012 when PSCs accounted for 37.58 percent while JVs contributed 36.91 percent.
From the publication in 2013, PSCs contributed 39.22 percent while JVs contributed 36.65 percent, 2014: PSCs; 40.10 percent and JVs 32.10 percent; 2015: PSCs 41.45 percent and JVs 31.99 percent while in 2017 the contributions stood at PSCs 44.32 percent and 30.85 percent respectively.
The NEITI Occasional Paper further explained that: “Other companies, comprising Nigerian Petroleum Development Company (NPDC), Alternative Financing (AF), and Independent/ Marginal Fields contributed 2.39 percent to total production in 1998 and by 2017 this had risen to 24.83 percent.
“This figure clearly shows the changing structure of oil production in Nigeria, where PSCs (which contributed a mere 0.5 percent to total production 20 years ago) have dramatically overtaken JVs (which contributed 97 percent to total production 20 years ago)”.
Between 2015 and 2017 covered by NEITI’s Occasional Paper review of NNPC Report, Nigeria produced 2.126 billion barrels of crude oil and condensate.
A Further review of the NNPC Report shows that: “Production was highest in 2015 with 775.6 million barrels produced. Production was lowest in 2016 with 661.1 million barrels produced, while production in 2017 was 690 million barrels.
“The year 2016 was a difficult year for oil production because production was shut in a number of oil terminals”.
NEITI said its major concern is that now that the PSCs account for about 50 percent of total oil production and major source of revenues, the delay or failure to review and renew the agreement means that payment of royalty on oil production under PSCs would not be made while computation of taxes would be based on the old rates.
On lifting of crude oil, the NNPC Monthly Financial and Operations Report disclosed “international oil companies (IOCs) lifted more crude oil than the government.
“Total lifting of crude oil and condensates was 2.135 billion barrels. Of this sum, IOCs and Independents lifted a total of 1.367 billion barrels, while government’s lifting by NNPC was 721.16 million barrels.
“This means that the operators lifted 64.01 percent of total crude lifting’s, while government through NNPC lifted 33.76 percent. When expressed in monetary terms, total government lifting of oil amounted to $35.893 billion while the figure for IOCs and Independents was $68.591 billion”
The NNPC Report further disclosed that refineries received 15.15 percent of total domestic crude lifting out of which 41.32 percent was utilized under the Direct Sale Direct Purchase (DSDP) program of NNPC.
On Refineries and domestic crude utilization, the report disclosed that for the 3 years under review, Nigeria’s refineries recorded an average capacity utilization of 12.26 percent.
A further breakdown shows that Kaduna refinery had the lowest capacity utilization of 9 percent while Warri and Port Harcourt recorded 9.73 percent and 15.4 percent respectively.
One striking feature of the NNPC financial operations report is the disclosure that the corporation lost the sum of N547 billion in its operation between 2015 and 2017.
Out of this amount, the NNPC Corporate Headquarters recorded the highest revenue loss to the tune of N336.268 billion.
On the contrary, the report revealed that the Nigeria Gas company made a huge profit of N141.324 billion.
NEITI said while it applauds the monthly voluntary disclosures by the NNPC, it was important to note that NEITI through its auditors under the EITI framework has not independently verified the information and data from the NNPC reports.
“NEITI has not, except for the year 2015, independently validated the data from NNPC. This will be done in ongoing and future reconciliation reports. What has been done here is a preliminary analysis of the data that NNPC has made available for the three-year period. The figures examined here do not represent the sum total of all revenues from the sector, as other payment streams like royalties and taxes from JVs, signature bonuses, transportation rental fees, NESS fees, penalties and others are not covered by the NNPC financial and operational reports” the NEITI Report concluded.
NEITI however commended the NNPC for the reconciliation of the crude swap under-delivery transaction executed during the crude- for- product- swap.
NEITI also urged the corporation to sustain the new spirit of openness while encouraging the citizens to use the information and data from the NNPC’s disclosures to promote public debate required in implementing the on-going reforms in the extractive sector.
The NEITI Occasional Paper series which reviewed the 3 years of NNPC operations and financial reports is the third in the series. In the pursuit of EITI global Open Data Policy, NEITI has data set for the three years (2015 -2017) in excel format readily available on its website in support of public interest, analysis and debate.
By Adedapo Adesanya
The United Kingdom via the British High Commission in Abuja has launched two flagship economic reform programmes – the Nigeria Economic Stability & Transformation (NEST) programme and the Nigeria Public Finance Facility (NPFF) -as part of efforts to support Nigeria’s economic reform and growth agenda.
Backed by a £12.4 million UK investment, NEST and NPFF sit at the centre of the UK-Nigeria mutual growth partnership and support Nigeria’s efforts to strengthen macroeconomic stability, improve fiscal resilience, and create a more competitive environment for investment and private-sector growth.
Speaking at the launch, Cynthia Rowe, Head of Development Cooperation at the British High Commission in Abuja, said, “These two programmes sit at the heart of our economic development cooperation with Nigeria. They reflect a shared commitment to strengthening the fundamentals that matter most for our stability, confidence, and long-term growth.”
The launch followed the inaugural meeting of the Joint UK-Nigeria Steering Committee, which endorsed the approach of both programmes and confirmed strong alignment between the UK and Nigeria on priority areas for delivery.
Representing the Government of Nigeria, Special Adviser to the President of Nigeria on Finance and the Economy, Mrs Sanyade Okoli, welcomed the collaboration, touting it as crucial to current, critical reforms.
“We welcome the United Kingdom’s support through these new programmes as a strong demonstration of our shared commitment to Nigeria’s economic stability and long-term prosperity. At a time when we are implementing critical reforms to strengthen fiscal resilience, improve macroeconomic stability, and unlock inclusive growth, this partnership will provide valuable technical support. Together, we are laying the foundation for a more resilient economy that delivers sustainable development and improved livelihoods for all Nigerians.”
On his part, Mr Jonny Baxter, British Deputy High Commissioner in Lagos, highlighted the significance of the programmes within the wider UK-Nigeria mutual growth partnership.
“NEST and NPFF are central to our shared approach to strengthening the foundations that underpin long-term economic prosperity. They sit firmly within the UK-Nigeria mutual growth partnership.”
By Aduragbemi Omiyale
A strategic partnership aimed at accelerating the growth, digital capacity, and sustainability of Nigeria’s 40 million Micro, Small and Medium Enterprises (MSMEs) has been signed by MTN Nigeria and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).
The collaboration will feature joint initiatives focused on digital inclusion, financial access, capacity building, and providing verified information for MSMEs.
With millions of small businesses depending on accurate guidance and easy-to-access support, MTN and SMEDAN say their shared platform will address gaps in communication, misinformation, and access to opportunities.
At the formal signing of the Memorandum of Understanding (MoU) on Thursday, November 27, 2025, in Lagos, the stage was set for the immediate roll-out of tools, content, and resources that will support MSMEs nationwide.
The chief operating officer of MTN Nigeria, Mr Ayham Moussa, reiterated the company’s commitment to supporting Nigeria’s economic development, stating that MSMEs are the lifeline of Nigeria’s economy.
“SMEs are the backbone of the economy and the backbone of employment in Nigeria. We are delighted to power SMEDAN’s platform and provide tools that help MSMEs reach customers, obtain funding, and access wider markets. This collaboration serves both our business and social development objectives,” he stated.
Also, the Chief Enterprise Business Officer of MTN Nigeria, Ms Lynda Saint-Nwafor, described the MoU as a tool to “meet SMEs at the point of their needs,” noting that nano, micro, small, and medium businesses each require different resources to scale.
“Some SMEs need guidance, some need resources; others need opportunities or workforce support. This platform allows them to access whatever they need. We are committed to identifying opportunities across financial inclusion, digital inclusion, and capacity building that help SMEs to scale,” she noted.
Also commenting, the Director General of SMEDAN, Mr Charles Odii, emphasised the significance of the collaboration, noting that the agency cannot meet its mandate without leveraging technology and private-sector expertise.
“We have approximately 40 million MSMEs in Nigeria, and only about 400 SMEDAN staff. We cannot fulfil our mandate without technology, data, and strong partners.
“MTN already has the infrastructure and tools to support MSMEs from payments to identity, hosting, learning, and more. With this partnership, we are confident we can achieve in a short time what would have taken years,” he disclosed.
Mr Odii highlighted that the SMEDAN-MTN collaboration would support businesses across their growth needs, guided by their four-point GROW model – Guidance, Resources, Opportunities, and Workforce Development.
He added that SMEDAN has already created over 100,000 jobs within its two-year administration and expects the partnership to significantly boost job creation, business expansion, and nationwide enterprise modernisation.
By Adedapo Adesanya
The Nigerian Exchange (NGX) Limited is seeking review of the controversial Capital Gains Tax increase, fearing it will chase away foreign investors from the country’s capital market.
Nigeria’s new tax regime, which takes effect from January 1, 2026, represents one of the most significant changes to Nigeria’s tax system in recent years.
Under the new rules, the flat 10 per cent Capital Gains Tax rate has been replaced by progressive income tax rates ranging from zero to 30 per cent, depending on an investor’s overall income or profit level while large corporate investors will see the top rate reduced to 25 per cent as part of a wider corporate tax reform.
The chief executive of NGX, Mr Jude Chiemeka, said in a Bloomberg interview in Kigali, Rwanda that there should be a “removal of the capital gains tax completely, or perhaps deferring it for five years.”
According to him, Nigeria, having a higher Capital Gains Tax, will make investors redirect asset allocation to frontier markets and “countries that have less tax.”
“From a capital flow perspective, we should be concerned because all these international portfolio managers that invest across frontier markets will certainly go to where the cost of investing is not so burdensome,” the CEO said, as per Bloomberg. “That is really the angle one will look at it from.”
Meanwhile, the policy has been defended by the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, who noted that the new tax will make investing in the capital market more attractive by reducing risks, promoting fairness, and simplifying compliance.
He noted that the framework allows investors to deduct legitimate costs such as brokerage fees, regulatory charges, realised capital losses, margin interest, and foreign exchange losses directly tied to investments, thereby ensuring that they are not taxed when operating at a loss.
Mr Oyedele also said the reforms introduced a more inclusive approach to taxation by exempting several categories of investors and transactions.
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