Nigeria loses $15 billion a year due to oil theft

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Nigeria is losing an estimated $15 billion a year to pipeline vandalism and oil theft, according to Usman Muhammed, a

lecturer in the political science department at Kaduna State University. This raises concerns about President Bola Tinubu's Renewed Hope Agenda's long-term viability after 2027.

Speaking on Monday at the first Citizens Engagement Conference in Kaduna, which focused on "The Positive Impact of Oil and Gas Reforms by President Bola Tinubu," Muhammad stated that upstream oil and gas performance and regulatory excellence are important catalysts for economic change.

Although Nigeria is richly endowed with an estimated 37 billion barrels of crude oil and 209 trillion cubic feet of natural gas, the academic don explained that the sector's contribution to national development has been constrained by ineffective governance, inconsistent policies, and deteriorating infrastructure. "Nigeria continues to struggle with declining productivity and fiscal leakages, despite being Africa's largest oil producer," he said.

According to a study, Nigeria produced between 1.4 and 1.67 million barrels of crude oil per day on average between 2019 and 2024, which was less than its OPEC quota of 1.8 million barrels, while unemployment remained at roughly 33% and inflation surged above 22%.

Professor Muhammad emphasized that the Petroleum Industry Act (PIA) 2021 is a historic reform. The law sought to strengthen fiscal discipline, encourage investment, and increase transparency by creating the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

"The Nigerian National Petroleum Corporation's (NNPC) transition into a commercial entity and the implementation of the PIA have started to yield results, but production efficiency and local content development remain moderate due to enforcement challenges," he stated.

Improvements in upstream output can directly improve national economic performance, as evidenced by the study's data, which demonstrate a substantial positive connection (r = 0.74) between oil production and GDP growth. Regression analysis also showed that investment inflows (β = 0.301) and regulatory quality (β = 0.517) are significant predictors of GDP, accounting for 81% of the difference.

Nigeria's regulatory efficiency score of 63 out of 100 is lower than that of Norway's 92 and the US's 90, according to comparisons with nations like the US, Saudi Arabia, and Norway. Experts at the Conference pointed out that complete sectoral optimization is still hampered by inadequate institutional coordination, antiquated infrastructure, and low technological adoption.

The meeting was informed that pipeline sabotage, oil theft, and bureaucratic bottlenecks continue to be significant issues. Muhammad emphasized that resolving the problems is essential to guaranteeing that oil earnings result in job creation, sustainable growth, and financial stability.

In the upstream sector, he emphasized the significance of budgetary openness, policy stability, and technological development. "How well Nigeria institutionalizes regulatory excellence and diversifies energy sources will determine economic prosperity beyond 2027, not just oil output," he stated.