Nigeria Unveils Tax Reforms and Executive Order to Boost Revenue, Attract Long-Term Investment
The Nigerian government has launched capital gains tax reviews and infrastructure concession programmes to attract patient capital, while President Tinubu's executive order on oil earnings remittance aims to increase Federation Account revenue.
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The Nigerian federal government has rolled out a series of economic reforms designed to attract long-term investment and strengthen revenue collection, with initiatives spanning tax policy adjustments and oil sector governance reforms.
The dual-pronged approach centres on revising capital gains tax provisions to encourage what officials term "patient capital" — sustained investments focused on job creation and structural economic development — while simultaneously tightening controls on oil revenue remittance through a presidential executive order.
Capital Gains Tax Overhaul Targets Infrastructure Investment
According to Business Day, the government is implementing capital gains tax reviews alongside infrastructure concession programmes as part of its strategy to attract long-term investors. The reforms specifically target investors willing to commit capital over extended periods rather than seeking short-term returns, addressing a persistent challenge in Nigeria's investment landscape where capital flight and speculative positioning have historically undermined sustained economic growth.
The infrastructure concession component represents an effort to leverage private sector capital for critical public assets, potentially reducing the fiscal burden on government coffers while accelerating infrastructure development. Nigeria's infrastructure deficit has been estimated at over $100 billion by various international institutions, creating bottlenecks across transportation, power generation, and logistics sectors that constrain economic productivity.
The capital gains tax adjustments appear designed to create preferential treatment for investments meeting specific criteria around duration and economic impact, though the precise mechanisms and thresholds have not been publicly detailed in the initial announcements. Such reforms typically involve reduced tax rates or extended holding period requirements that qualify investors for preferential treatment.
Presidential Order Tightens Oil Revenue Controls
In parallel, President Bola Tinubu has issued an executive order mandating stricter remittance protocols for oil and gas earnings, a move the Minister of State for Petroleum Resources (Oil), Doris Uzoka-Anite, said would "safeguard oil and gas revenues" and boost allocations to the Federation Account Allocation Committee (FAAC), according to The Peoples Gazette.
The FAAC distributes monthly revenue from oil exports, customs duties, and other federal income streams among Nigeria's three tiers of government — federal, state, and local. Fluctuations in FAAC allocations have created fiscal instability for state governments, many of which depend heavily on these transfers to fund operations and development projects.
Nigeria's oil sector has faced persistent revenue leakage challenges, including crude theft, pipeline vandalism, and accounting irregularities that have cost the country billions of dollars annually. The executive order appears aimed at closing gaps in the revenue collection chain, particularly regarding the timely and complete remittance of proceeds from crude oil sales by the Nigerian National Petroleum Company Limited and other operators.
Economic Context and Implementation Challenges
The reforms come as Nigeria grapples with multiple economic headwinds, including elevated inflation that reached 34.8 percent in December 2025, according to the National Bureau of Statistics, alongside foreign exchange pressures and mounting debt service obligations that consumed approximately 96 percent of federal revenue in 2024.
The Tinubu administration has pursued various revenue enhancement measures since taking office in May 2023, including the removal of petrol subsidies and foreign exchange market reforms that, while generating fiscal savings, have also contributed to cost-of-living increases that have strained household budgets and business operations.
The success of the capital gains tax reforms will depend substantially on implementation details, including the specific incentives offered, eligibility criteria, and the government's capacity to provide regulatory certainty that long-term investors typically require. Nigeria's complex regulatory environment and periodic policy reversals have historically deterred some categories of foreign investment despite the country's significant market size and resource endowments.
For the oil revenue executive order, effective enforcement mechanisms will prove critical, particularly regarding monitoring systems that can track revenue flows from wellhead to government accounts and penalties for non-compliance that create meaningful deterrents against diversion or delayed remittances.
The combined initiatives signal the government's recognition that both attracting new investment and plugging existing revenue leaks will be necessary to address Nigeria's fiscal challenges and fund development priorities across Africa's largest economy.