Business
NCDMB, FIRS Offer Tax Incentives For Oil Industry R&D Investments
Modupe Asudo
Oil and gas companies desirous to reduce their tax burden and grow profitability should consider increasing investments in research and development (R&D), with a view to taking advantage of the incentives provided in existing fiscal laws, the Nigerian Content Development and Monitoring Board (NCDMB) and the Federal Inland Revenue Service (FIRS) have canvassed.
The Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami stated this on Tuesday in Yenagoa, Bayelsa State, at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by the two organizations at the NCDMB Conference Hall.
Delivering the keynote address at the event, the Executive Secretary NCDMB stated that the Finance Act 2021 and other extant tax codes relating to Research and Development provide attractive tax incentives for oil and gas firms that invest in R&D.
Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote speaking at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by the NCDMB and FIRS on Tuesday in Yenagoa.
He hinted that many oil and gas companies were oblivious of the opportunities that exist within Nigerian tax laws for the oil industry to harness from investing in Research and Development. He reiterated that such workshops provide the necessary education and enlightenment that enable businesses to position themselves appropriately to benefit from making R&D an integral part of their business model.
He observed that the low level of R&D funding by private companies is partly linked to inadequate information. He regretted that “the consequence is not only significant capital flight in the acquisition of technology required for oil and gas projects and operations, but also players in the sector are tied to the apron and direct control of the foreign supply chain who control the technological advances arising from their R&D activities.”
Wabote cited examples of leading Fortune 500 companies that commit between 5- 10% of their annual budgets to R&D, which enables them to produce innovative products and make significant tax returns to the Government and create huge employment opportunities.
L-R: (3rd left) General Manager Planning, Research and Development, Nigerian Content Development and Monitoring Board (NCDMB), Alhaji Abdulmalik Halilu; Director, Planning, Research and Statistics, NCDMB, Mr. Daziba Patrick Obah; Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and (7th left); member NCDMB Governing Council, Mr. Mina Oforiokuma and other speakers at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by NCDMB and Federal Inland Revenue Service (FIRS) on Tuesday in Yenagoa, Bayelsa State.
Speaking further, the NCDMB boss expressed hope that the workshop will change the gross underfunding of research in Nigeria, which is currently estimated at less than 0.2% of the national budget. He insisted that operators can no longer neglect R&D, insisting that it is key to local content development, enhancement of future tax revenue to Government, development of home-grown solutions and retention of industry spending within Nigerian financial institutions.
He remarked that “that access to the Nigerian Content Intervention Fund by the local supply chain has been one of the major contributors to the growth in local content level from less than 5% in 2010 to 54% in 2022.”
He hinted that the Board is “pushing for similar performance in Research and Development by sharpening our focus on the various elements that will enable the growth and appreciable impact of research and development in our economy.”
The Executive Secretary identified funding as one of the key pillars of R&D, and that informed the launch of the $50 million Nigerian Content Research & Development Fund to drive strategic programmes and developments in the R&D ecosystem.
He however insisted that Government should not be the sole financier of R&D, pointing out that “the bulk of R&D funding should come from the private sector who are business owners and will ultimately benefit directly from the research outcomes.”
The Executive Secretary affirmed that the conference was organized in line with Section 70 of the Nigerian Oil & Gas Industry Content Development Act 2010 which mandates NCDMB to organize conferences and other public education fora to develop local content in the Nigerian oil and gas industry.
He added that the Board is leveraging the Enabling Business Environment pillar of its 10-year Strategic Roadmap, to collaborate with the FIRS in creating a platform for engaging oil and gas industry stakeholders, with a view to highlighting the inherent benefits of investing in R&D, for the private sector and government entities.
In his remarks, the Executive Chairman, Federal Inland Revenue Service, Mr. Muhammad Nami reiterated that “Research and Development (R&D) have been identified as a veritable means for companies that want to remain competitive and profitable in today’s rapidly changing business environment.”
L-R: (2nd left) General Manager Planning, Research and Development, Nigerian Content Development and Monitoring Board (NCDMB), Alhaji Abdulmalik Halilu; Director, Planning, Research and Statistics, NCDMB, Mr. Daziba Patrick Obah; Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and (6th left); member NCDMB Governing Council, Mr. Mina Oforiokuma and other speakers at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by NCDMB and Federal Inland Revenue Service (FIRS) on Tuesday in Yenagoa, Bayelsa State.
Nami who was represented by his Senior Special Assistant, Mr. Gabriel Ogunjemilusi provided details on Federal Government’s tax regime, incentives, and related facts. He stated that: “Allowable deduction of up to 10% of amount of reserve made out of the profits of a period by a company for research and development: claim of capital allowance on capital expenditure on plant and machinery used for R&D activities; pioneer status tax holiday for R&D Companies; companies and other organizations that invest in R&D facilities for commercialization can claim a tax credit of up to 20% of the cost of their qualifying expenditures.”
He assured participants that the Federal Inland Revenue Service (FIRS) will continue to support all companies in Nigeria to take advantage of available fiscal incentives provided by the Nigerian tax laws.
The Workshop attracted renowned finance and legal experts who spoke on “Provisions of the NOGIC Act on R&D, R&D Operating Model and Imperatives on Success,” “Royalty Potentials from R&D Investments,” and “Constraints of Investing and Way Forward.”
More than 100 Chinese original equipment manufacturers are being wooed for investment, technology and manufacturing capacity to aid growth in Nigeria’s oil and gas industry.
The Nigerian Content Development and Monitoring Board (NCDMB) made the disclosure through its Director, Project Certification and Authorisation Division and Senior Technical Adviser to the Executive Secretary, Austin Uzoka.
This was detailed in a statement issued by the Board which stated that Uzoka was representing the Executive Secretary, Felix Ogbe, at the 15th China Shale Oil and Gas Summit in Chengdu, China, where he made the disclosure.
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According to Ogbe, the board was seeking to move the relationship between Nigerian oil and gas operators and Chinese manufacturers beyond the conventional buyer-seller model to investment, manufacturing, technology transfer and integration into global supply chains.
He said the Nigerian Oil and Gas Content Development Act (NOGCDA) guaranteed patronage for oil and gas equipment manufacturing facilities established in Nigeria, adding that such investments could also provide access to opportunities across the Gulf of Guinea.
“We are looking beyond the traditional buyer-seller relationship. What can we build together? We want Chinese companies to see Nigeria not simply as a market for their products, but as a strategic investment destination, a platform for manufacturing and technology development, and a gateway to opportunities across the wider African market,” he said.
He highlighted the Nigerian Oil and Gas Park Scheme (NOGPS) as a platform for Chinese original equipment manufacturers to establish manufacturing, assembly and service operations in Nigeria.
He said the scheme would provide opportunities for technology transfer, technical arrangements and the integration of Nigerian businesses into the supply chains of Chinese companies.
The ES also identified China’s capabilities in manufacturing, engineering, technology and energy infrastructure as areas that could support Nigeria’s industrial development.
“China has developed tremendous capabilities in manufacturing, engineering, technology and energy infrastructure. We want to explore how those capabilities can be connected with the opportunities that exist in Nigeria, for mutual benefits,” he added.
Nigeria’s local content policy had evolved from increasing Nigerian participation in oil and gas projects to a broader industrial development agenda focused on manufacturing, technology ownership and global competitiveness, he pointed out.
“Nigeria’s local content journey has evolved significantly since the local content law was enacted in 2010. What began primarily as an effort to increase Nigerian participation in the oil and gas industry has developed into a broader industrial development agenda focused on building capabilities, deepening manufacturing, promoting technology ownership and positioning Nigerian businesses to compete within regional and global markets,” he observed.
The engagement formed part of Nigeria’s participation in the 15th China Shale Oil and Gas Summit, held from September 20 to 23 at the Chengdu Century City International Conference Centre.
The summit, themed ‘Empowering Efficient and Green Development via Intelligent Technologies, Innovating to Lead the Shale Oil and Gas Revolution’, provided a platform for Nigerian oil and gas stakeholders to showcase investment opportunities in manufacturing, technology and oil and gas services.
According to the NCDMB, several Chinese OEMs expressed interest in exploring business relationships with Nigerian companies and participating in the country’s growing oil and gas manufacturing ecosystem.
In her closing remarks, the General Manager, Midstream, PCAD, Ms Lekoma Phimia, urged stakeholders to build on the connections established at the session to develop commercially viable and sustainable business relationships.
The NCDMB also used the exhibition to provide prospective investors and industry players with information on Nigeria’s oil and gas sector, local content opportunities and avenues for establishing operations in the country.
The board said the Chengdu engagement was part of efforts to expand Nigeria’s international industrial connections and advance the objectives of the Nigerian Oil and Gas Industry Content Development Act (NOGICDA).
It added that its focus was to move the local content agenda from participation to capability, manufacturing, and ultimately technology ownership and regional competitiveness.
NIPCO Group has announced plans to develop a Floating Liquefied Natural Gas (FLNG) project in Nigeria, with the proposed development estimated to require more than $3bn in investment.
This statement was made at a press conference on Thursday by the Managing Director of NIPCO Group, Nagendra Verma, who said the proposed project would have an envisaged LNG production capacity of approximately three million tonnes per annum, subject to the outcome of feasibility studies, regulatory approvals and a final investment decision.
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Verma said the project, which would mark NIPCO’s entry into the Liquefied Natural Gas (LNG) sector, was being considered for locations in the Escravos area of Delta State and the Akwa Ibom region.
“This proposed development is envisaged to comprise an FLNG facility along with associated marine and export infrastructure with the potential to serve both the international LNG market and growing domestic LNG demand in Nigeria. The proposed project is presently envisaged to produce LNG unified LNG of approximately 3 million L per annum, 3 million metric tons per annum. The proposed development is expected to represent a significant investment currently estimated in excess of $3bn.
“The final location shall be determined subsequent to the ongoing feasibility study. We are looking at strategic locations that will facilitate access to upstream gas resources, LNG processing, marine transportation and both international and domestic markets,” he said.
According to him, NIPCO had been evaluating the proposed FLNG project for the past six to nine months and was currently undertaking preliminary technical, commercial and feasibility assessments.
“We are considering various development concepts, technology solutions, financing structures and commercial options with a view to establishing a technically robust and commercially sustainable project,” Verma said.
He said the proposed development would comprise an FLNG facility alongside associated marine and export infrastructure, with the potential to serve international LNG markets as well as Nigeria’s growing domestic gas demand.
“The project is presently envisaged to have an LNG production capacity of approximately three million tonnes per annum.
“However, this remains subject to the outcome of the ongoing feasibility and technical studies, project economics, regulatory approvals and final investment decisions,” he said.
Verma said NIPCO was also evaluating the shipping and logistics infrastructure required to support both export and domestic LNG supply.
The Managing Director said the ongoing assessment covers upstream gas supply and reserves, FLNG technology and configuration, LNG production capacity, marine and export infrastructure, domestic LNG supply opportunities, shipping and logistics requirements, project economics and financing structure.
FCT Generates More IGR Than Six North Central States Combined in Three Years
The Federal Capital Territory (FCT) generated more Internally Generated Revenue (IGR) than the six states in the North Central geopolitical zone combined between 2023 and 2025, according to figures from the National Bureau of Statistics (NBS).
The FCT recorded a total IGR of ₦849.80 billion during the three-year period, while Kwara, Niger, Kogi, Plateau, Nasarawa and Benue collectively generated ₦704.42 billion.
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The FCT recorded steady growth in its internally generated revenue throughout the period, rising from ₦211.10 billion in 2023 to ₦282.36 billion in 2024, before reaching ₦356.34 billion in 2025.
For the six North Central states, combined IGR stood at ₦176.55 billion in 2023, increased to ₦214.96 billion in 2024 and rose further to ₦312.91 billion in 2025.
Kwara State recorded the highest cumulative IGR among the six states, generating ₦226.20 billion over the three years.
It was followed by Niger with ₦122.71 billion, Kogi with ₦102.73 billion, Plateau with ₦102.08 billion, Nasarawa with ₦81.58 billion, and Benue with ₦69.12 billion.
The FCT’s three-year IGR was therefore about ₦145.38 billion higher than the combined revenue of the six North Central states.
The figures also show that the combined IGR of the six states increased substantially in 2025, when their total reached ₦312.91 billion, compared with ₦214.96 billion in 2024.
See full list below:
North Central States — Three-Year IGR (2023–2025)
Kwara — ₦226.20 billion
Niger — ₦122.71 billion
Kogi — ₦102.73 billion
Plateau — ₦102.08 billion
Nasarawa — ₦81.58 billion
Benue — ₦69.12 billion
North Central Total — ₦704.42 billion
By Year:
2023 — ₦176.55 billion
2024 — ₦214.96 billion
2025 — ₦312.91 billion
FCT:
2023 — ₦211.10 billion
2024 — ₦282.36 billion
2025 — ₦356.34 billion
Three-year total — ₦849.80 billion
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