Nigeria May Lose over $50bn FDI to Atiku’s Subsidy Restoration Plans – IMPI

…says ‘local transport will rise 40% above current rates’

The Independent Media and Policy Initiative (IMPI) on Wednesday warns that Nigeria may lose the recently projected over $50 billion Foreign Direct Investment (FDI) into the country, on the backdrop of the planned restoration of fuel subsidy in Nigeria, by former Vice President Atiku Abubakar

The former vice president and presidential candidate of the African Democratic Party (ADC) had recently vowed to restore fuel subsidy, if elected President in 2027, as part of his campaign promises

Recall that President Bola Tinubu, who ended Nigeria’s decades of fuel subsidy regime on the 29th of May, 2023, recently signed the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, in continuation of his ongoing reforms to unlock up to $50 billion in investments for Nigeria’s petroleum sector.

The Order replaced the old project-by-project negotiations with clear, standard rules to attract long-term capital.

The Order also kicked off with the $10 billion Bonga South West project, providing existing deep offshore leaseholders the opportunity to “reach a Final Investment Decision (FID) by December 31, 2029, to get full standard incentives.”

The Order will allow the Nigerian National Petroleum Company (NNPC) Limited to update Production Sharing Contracts, aimed at expanding jobs and boosting local engineering,

On the back of these and other short term and long term gains, the IMPI, fears ” that several foreign investors will need to be convinced that doing business in the country is not scary, unpredictable and indeed an investor’s nightmare.

Fuel subsidy, as known as “NNPCL’s under recovery”, cost Nigerian government over N20 trillion loses between 2006 and 2022, according to reports

President Tinubu recently noted that as at June, 2023, over 27 governors were unable to pay salaries following poor revenue allocation to states, as a result of the subsidy

Taiwo Oyedele, coordinating minister of the economy and minister of finance, revealed recently that the Federal government saved N15 trillion from subsidy removal, between June, 2023 and December, 2025.

As a result the 36 states and Local Governments shared N10.5 trillion, which has eased their financial positions, making it easier to pay salaries and pension arrears, amongst others

The think-tank, in a statement signed by Omoniyi Akinsiju captioned, “Atiku’s Fuel Subsidy Restoration Campaign Promise Fails Litmus Test of Practicability and Sustainability”, states that “Atiku’s proposed Economic Recovery Plan (AERP) outlined a model structured around production rather than consumption shifting the subsidy from importation to production, and transferring incentives directly from middlemen traders to local Nigerian refineries.”

The former vice president’s model required eligible public and private local refineries to receive domestic crude allocations at a discounted price on the condition that refinery operators qualify for discounted crude only if they pass the exact savings on to consumers.”

Akinsiju however, described the model as “convoluted”, fearing that ” It would force commercial entities like NNPC Limited or private refineries into complex, politically mandated pricing formulas thereby underminig the noble ideals and provisions of the existing Petroleum Industry Act (PIA) of 2021.”

According to him “Atiku’s proposal also sends signals to global markets that Nigeria lacks regulatory predictability.

“This policy shift would scare away international capital and freeze modern Public-Private Partnerships (PPPs), with repercussions for funding critical legacy infrastructure projects and a damning effect on production and productivity”.

He also noted that the proposal to re-regulate prices would directly undermine the Petroleum Industry Act (PIA) 2021, noting that his idea creates an illusion of price reduction.

“From apolitical economy framework, Atiku’s policy proposal is fatally flawed by operating on a dual axis, that is, exploiting and weaponising especially the current social discontent over the rising cost of living and at the same time introducing long-term structural risks to Nigeria’s fragile fiscal framework,” he said

Akinsiju maintained that despite its popular appeal, fuel subsidies are inherently regressive economic tools where wealthier households with multiple vehicles consume a disproportionate volume of petrol compared to what is consumed by the poorest demographics, who rely primarily on public transport or lack electricity access entirely.

He noted that while fuel subsidy acts as a fiscal illusion, it changes where the cost is paid, rather than eliminating the cost itself.

“Atiku’s proposal to re-regulate prices not only directly undermines the Petroleum Industry Act (PIA) 2021, but also creates an illusion of price reduction.

“Fixed price caps remove commercial incentives for marketers to distribute fuel to remote areas; consequently, fuel supplies would shift to high-volume urban markets like Lagos, Abuja, Kano, and Port Harcourt”, he said.

The think-tank further explained that Nigeria has a historical record of fiscal morbidity, which ultimately led to infrastructure funding collapse, resultant from successive federal governments deducting subsidy costs “at source” from national oil revenues before the money could reach the Federation Account.

He said that the system created arbitrary deductions which left state and local governments financially crippled.

“Atiku’s model repeats this exact pattern. By giving discounted crude oil directly to local refineries, the government creates a massive hidden deduction.

“This directly reduces the revenue flowing into the Federation Account, stripping state and local government leaders of the liquid capital needed to build rural feeder roads, primary healthcare centres, and community water infrastructure.”

He said Atiku’s subsidy model will re-enact the long-forgotten black-market regimes, with remote filling stations running dry and agricultural transport trucks forced to buy fuel from informal black-market vendors.

This would further drive the country’s vulnerable populations into deeper despair.

“This pushes long-term transport fares up to 40% above current deregulated market rates, accelerating food inflation in cities and leaving rural farmers with lower profits.

“We reiterate that Nigeria’s historical infrastructure deficit cannot be solved by returning to the fiscal policies that created it.

“Atiku Abubakar’s “Follow-the-Barrel” model replaces a cash subsidy with a crude oil revenue discount.

“This policy choice risks locking Nigeria back into the same historical cycle: prioritising temporary, popular relief at the pump, while sacrificing the high-quality roads, hospitals, schools, and energy