The Federal Government’s approval of targeted, investment-linked incentives for the proposed Bonga South West deep-offshore project sends a positive and overdue signal to global investors. The focus on ring-fenced incentives tied to new capital, incremental production, and local value addition reflects a more disciplined approach than Nigeria’s past blanket fiscal concessions.
If well designed, the incentives could help unlock delayed deep-water investments, support FX inflows, and deepen offshore services and supply-chain participation. The stated expectation of a timely Final Investment Decision (FID) also reinforces policy seriousness.
However, key risks remain. Reconciling project-specific incentives with fiscal rules of general application under the PIA is a persistent governance dilemma. Without transparency on fiscal parameters, it is difficult to assess revenue neutrality or long-term government take. Incentives alone will not resolve security, cost escalation, regulatory efficiency, or execution risks.
Deep-offshore projects are capital-intensive and long-dated; claims around jobs and near-term FX inflows should therefore be treated with caution. Economic benefits accrue over time and depend on disciplined execution.
For credibility and durability, the Ministry of Petroleum Resources and the full PIA policy and regulatory architecture must be fully aligned and carried along. This episode underscores the need to move away from personality-driven governance toward rule-based, institution-led fiscal management.
Bottom line: The signal is right and the intent is sound—but success will be judged by gazetted fiscal terms, FID closure, disciplined implementation, and measurable outcomes, not announcements.
— Wumi Iledare, PhD, FNAEE, SrFUSAEE, PEPE
Chair, OGEP Forum, IIPEEP, Abuja, 012
