Investor uncertainty in Nigeria's fiscal and regulatory land

Investors in Nigeria are facing increasing uncertainty due to shifting fiscal and regulatory frameworks across different sectors.

In the financial sector, offshore investors have expressed concern regarding the implementation of capital gains tax. Following a policy change that tripled the tax from 10 percent to 30 percent, Cordros Securities reported that fund managers cited a lack of communication and opacity in tax administration. This uncertainty has influenced foreign fund behavior, with many remaining net sellers of Nigerian equities despite broader economic reforms.

Simultaneously, the energy sector is experiencing instability. Festus Osifo, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has warned that frequent changes to the regulatory framework, such as relocating fiscal provisions from the Petroleum Industry Act (PIA) 2021 to the Nigeria Revenue Act, “amplify uncertainty and disruption.”

New challenges have emerged in the oil and gas sector, including a widening technical talent deficit. Experts attribute this shortage to a decade of stalled investment and the ‘japa’ phenomenon, where skilled professionals emigrate, leaving companies to rely on retired veterans. Additionally, labor tensions have escalated; the Dangote Petroleum Refinery has accused PENGASSAN of economic sabotage following supply disruptions, while the union emphasizes the need to protect workers during industry transitions and asset divestments.