Stable Regulatory Frameworks Driving Upstream Investment in Africa
By Naija Enquirer Staff
Africa’s upstream oil and gas sector is gaining momentum as regulatory reforms in key markets boost investor confidence and unlock new capital flows. Industry leaders told Naija Enquirer that stable and transparent frameworks are proving essential to sustaining exploration and production growth across the continent.
Nigeria: PIA Unlocks $17 Billion in FDI
Nigeria’s Petroleum Industry Act (PIA), enacted in 2021, is reshaping the upstream landscape by restructuring the national oil company, strengthening governance, and introducing fiscal incentives. The reforms have attracted more than $17 billion in foreign direct investment into Nigeria’s oil and gas sector.
The Act’s host community fund has also aligned local benefits with energy development, strengthening social license to operate and reducing tensions in oil-producing regions.
Angola: $60 Billion in New Commitments
In Angola, the government’s Incremental Production Initiative, launched in late 2024, has secured over $60 billion in commitments for upstream development over the next five years. Fiscal incentives and a renewed focus on transparency are positioning Angola as a major petroleum hub in sub-Saharan Africa.
“While reforms like Angola’s recent legislative changes offer a foundation, their success hinges on consistent implementation and institutional support,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “Inclusive and transparent processes are critical to building trust and attracting investment.”
South Africa: Uncertainty Slows Progress
In contrast, regulatory uncertainty has slowed upstream activity in South Africa. In August 2025, the Western Cape High Court revoked exploration permits for Shell and TotalEnergies, citing insufficient environmental impact assessments and lack of public consultation.
The ruling highlights how unclear or inconsistent regulations can derail offshore exploration and discourage international investment.
Investor Confidence Hinges on Clarity
Across Africa, the lesson is clear: investors demand predictable, transparent, and consistent frameworks before committing long-term capital to upstream projects. While Nigeria and Angola’s reforms have spurred record-breaking investment, South Africa’s opaque processes have triggered costly delays and legal disputes.
Industry observers argue that transparent governance is the foundation for Africa to meet its dual goals of growing hydrocarbon output while attracting sustainable investment. Without this, even resource-rich countries risk falling short of their full upstream potential.