Nigeria may be losing up to N6 trillion annually due to unaccounted tax incentives and waivers granted to fossil fuel operators, the Nigeria Extractive Industries Transparency Initiative (NEITI) has warned.
NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, disclosed this in Abuja during the launch of a new report on the role of tax incentives in Nigeria’s fossil fuel sector by the Civil Society Legislative Advocacy Centre (CISLAC).
Dr. Orji explained that the lack of transparency and weak oversight in managing these incentives continues to drain public revenue at a time when the country struggles to meet its fiscal obligations and energy transition goals.
He said NEITI’s national study on the energy transition shows Nigeria faces a “delicate balance” between maintaining oil revenues and preparing for a post-fossil fuel economy.
According to him, many of the tax waivers offered to oil and gas firms no longer align with national priorities and should be urgently reviewed or removed.
He warned that without a transparent and well-managed fiscal transition, the country risks facing declining hydrocarbon revenues alongside inadequate investment in cleaner energy alternatives.
“Our policy brief reveals that poor transparency and weak multi-stakeholder oversight in administering these incentives could result in losses nearing N6 trillion yearly,” Orji stated.
He emphasized that all subsidies, exemptions, and incentives should be publicly disclosed and justified in line with Nigeria’s fiscal and sustainability goals.
NEITI also called for inclusive and gender-sensitive fiscal reforms to ensure workers and communities dependent on extractive activities are not left behind.
Dr. Orji commended CISLAC for initiating the study and pledged collaboration to implement recommendations that promote fiscal transparency, climate accountability, and data-driven oversight.
CISLAC Executive Director, Auwal Musa Rafsanjani, said Nigeria’s current fiscal policy contradicts its 2060 net-zero carbon target, as the government continues to incentivize fossil fuel investments while professing an energy transition agenda.
He urged policymakers to phase out fossil fuel incentives, strengthen tax expenditure reporting, and mobilize domestic resources toward renewable energy growth and climate resilience.