Nigeria retains Africa’s upstream investment lead despite capital decline

Nigeria has held its ground as a top oil and gas investment destination in Africa, even as capital flowing into the continent's upstream sector has sharply decreased. The International Energy Agency (IEA) reported that Nigeria, along with four other major producers, still accounts for 70% of Africa's upstream investment and 80% of its crude oil and gas production.

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In the past decade, the continent’s upstream sector has shown diverging trends between established producers and emerging suppliers. Investment in the region remains highly concentrated, with five countries – Algeria, Angola, Egypt, Nigeria and Libya – accounting for 70 per cent of investment and 80% of production.

However, the IEA's 2026 World Energy Investment Report revealed a dramatic fall in upstream investment across Africa over the past decade. Total investment declined from $68 billion in 2016 to $37 billion in 2025, a drop of about 46%. This decline reflects diminishing competitiveness among mature producers, even as newer oil and gas nations attract more capital.

The report highlighted that investment remains concentrated in established producers: Nigeria, Algeria, Angola, Egypt, and Libya. These five countries together saw their total investment halve from $50 billion in 2016 to $25 billion in 2025. This trend, despite an increase in Libya, signals shifts in investment attractiveness.

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However, total investment across these producers has halved from $50bn in 2016 to $25bn in 2025, despite an increase in Libya, reflecting shifts in investment competitiveness.

In contrast, emerging producers such as Mozambique, Namibia, Senegal, and Uganda experienced a more than threefold increase in investment, from $1.5 billion in 2016 to $5 billion in 2025. This growth is attributed to fewer opportunities in mature assets and the development of new, capital-intensive projects like deepwater and LNG terminals.

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This reflects fewer opportunities to invest in mature assets and the development of new capital-intensive projects (particularly deepwater and LNG terminals), resulting in higher investment requirements relative to current output.

Despite the overall investment decline, exploration activity remained robust, with capital expenditure reaching nearly $6.5 billion in 2025 as companies focused on recently discovered hydrocarbon basins. The IEA noted that exploration is inherently risky, with an average global commercial success rate of 27%.

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Exploration capex in Africa reached almost USD 6.5bn in 2025 reflecting ongoing work across recent discoveries.