Nigeria is facing severe revenue drain in its oil sector, according to findings by the Nigeria Extractive Industries Transparency Initiative (NEITI). The country reportedly lost up to $3.3 billion to crude oil theft and sabotage over a certain period. Meanwhile, many oil firms are said to have withheld about N1.5 trillion in unpaid taxes, royalties, penalties, and fees owed to the Federal Government.
NEITI’s audits, which examine the financial, physical, and procedural flows within the oil and gas sector, have flagged persistent challenges including pipeline vandalism, illicit refineries, and collusion. These acts not only jeopardize national revenue but also pose environmental and security risks in the Niger Delta and beyond. The losses from theft and sabotage are exacerbated by systemic issues of non-compliance and under-remittance by oil companies.
The N1.5 trillion figure relates to longstanding debts uncovered in NEITI’s audits, particularly in relation to the 2019 oil and gas audit, where 77 companies were implicated in owing multiple categories of revenue to the government. Efforts to recover these funds have seen some success, but a substantial portion remains outstanding. NEITI, in collaboration with oversight bodies and the National Assembly, has pushed for stronger enforcement and more transparent disclosures.
The combined impact of these losses constrains Nigeria’s fiscal capacity, weakens investor confidence, and undermines efforts at sector reform. Analysts argue that unless the government intensifies anti-theft operations, improves regulatory oversight, and enforces revenue collection rigorously, these leakages will continue to hinder the country’s economic recovery and sustainable development.
