Nigeria is reportedly losing around $15 billion each year to oil theft and pipeline vandalism, a new study by Professor Usman Muhammed of Kaduna State University has revealed.
The findings have sparked concerns about the long-term sustainability of President Bola Ahmed Tinubu’s Renewed Hope Agenda beyond 2027.
Addressing the 1st Citizens Engagement Conference (North-West Edition) in Kaduna, which focused on “The Positive Impact of Oil and Gas Reforms by President Ahmed Bola Tinubu,” Professor Muhammed emphasized that the oil and gas sector remains the backbone of Nigeria’s economy. However, he noted that poor governance, inconsistent policies, and deteriorating infrastructure continue to restrict the sector’s full potential.
Despite holding an estimated 37 billion barrels of crude oil and 209 trillion cubic feet of gas, Nigeria still struggles with production inefficiencies and substantial fiscal leakages. “Despite being Africa’s largest oil producer, the country continues to struggle with declining productivity and weak institutional accountability,” he stated.
The study revealed that between 2019 and 2024, Nigeria’s crude oil output averaged between 1.4 and 1.67 million barrels per day, falling short of its OPEC quota of 1.8 million barrels. During the same period, inflation and unemployment rose above 22 percent and 33 percent, respectively.
Professor Muhammed highlighted the Petroleum Industry Act (PIA) of 2021 as a major reform initiative, noting the establishment of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Yet, he warned that weak enforcement has limited the impact of these reforms.
“Implementation of the PIA and the commercialization of NNPC have begun to yield modest results, but production efficiency and local content development remain moderate,” he said.
The research also showed a strong correlation (r = 0.74) between oil production and GDP growth, suggesting that increased production could significantly enhance national income. Regulatory quality and investment inflows, according to the study, account for more than 81 percent of GDP performance variance in the sector.
Comparative analysis presented at the conference revealed that Nigeria scored 63 out of 100 in regulatory efficiency, lagging behind countries like Norway (92) and the United States (90). Experts attributed this gap to poor institutional coordination and limited technology adoption.
“The twin problems of oil theft and pipeline vandalism have continued to undermine the sector’s growth,” Professor Muhammed warned. “Without decisive measures, Nigeria risks losing the transformative gains envisaged under the Renewed Hope Agenda.”
The study recommended digital monitoring of oil production, upgrading pipelines with anti-theft technologies, and boosting investment in research and development. It also called on the government to enhance local content and foster economic diversification through gas-based industrial hubs.
Supporting the study’s findings, Mallam Nasir AbdulQuadri, Co-convener of the Citizens Engagement Conference, urged the federal government to allow private investors to operate refineries while focusing on regulatory oversight.
“When we talk about reform in the oil sector, it means the government must take its hands off business,” AbdulQuadri said. “Public refineries have failed for decades, but one man’s vision has given us the 650,000 barrels per day Dangote Refinery, proof that private ownership works.”
AbdulQuadri added that deregulation is already producing positive outcomes and called for patience from Nigerians as reforms continue. “When we deregulate, we kill corruption. The subsidy era enriched a few individuals at the expense of the nation. Now, the process is open and transparent,” he explained.
He described the conference as a platform to bridge the information gap between citizens and the government, helping Nigerians understand ongoing reforms and their long-term benefits. “Many citizens are unaware of the positive changes in the sector, and this ignorance often breeds misinformation,” he said.
AbdulQuadri also urged Nigerians to unite behind the reform agenda. “In this country, we don’t have Hausa, Igbo or Yoruba; we don’t have Muslim or Christian, only good and bad people. Good Nigerians must work together against those using tribe and religion to divide us,” he added.
Conference participants, including industry experts, regulators, and civil society actors, agreed that policy stability, transparency, and private-sector participation are crucial to unlocking the full potential of Nigeria’s oil and gas sector.
Professor Muhammed concluded by stating that sustainable growth beyond 2027 depends not only on oil output but also on Nigeria’s ability to institutionalize regulatory excellence, diversify its economy, and strengthen public accountability.
