The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Rabiu Umar, has warned that uncertainty in Nigeria’s regulatory environment could undermine investment in the petroleum industry.
Umar said investors were prepared to manage commercial risks but found regulatory uncertainty more difficult to accommodate, stressing that clear, consistent and predictable rules were critical to attracting and retaining capital.
The NMDPRA chief executive made the remarks on Wednesday in a message on regulatory certainty, where he highlighted the importance of predictable regulation to the development of Nigeria’s midstream and downstream petroleum sectors.
“Investors are prepared to manage commercial risk. What they find far more difficult is regulatory uncertainty,” he said.
According to Umar, government efforts to provide fiscal incentives, financing support and policy reforms to encourage investment could achieve little if investors remained uncertain about how the regulatory system would operate in practice.
He said investors wanted assurances that rules were clear, decisions were consistent and regulatory processes were predictable, adding that such confidence could influence investment decisions as much as commercial considerations.
Umar noted that the issue was particularly important in the midstream and downstream sectors, where investments in refineries, pipelines, storage facilities and gas infrastructure were designed to operate over many years.
“Investments in refineries, pipelines, storage facilities and gas infrastructure are designed to operate over many years. Investors need confidence that the regulatory environment will remain stable, consistent and credible throughout the life of those assets,” he said.
The NMDPRA boss said the Petroleum Industry Act had provided the industry with a strong legal and regulatory framework based on transparency, competition and accountability.
He said the responsibility of the NMDPRA was to ensure that those principles were reflected in its day-to-day regulatory activities.
Umar, who said he had spent nearly three decades on the commercial and operational side of the downstream petroleum industry before joining the authority, said he understood the concerns investors raised before committing capital.
He identified timely approvals, consistent application of regulations and fair and predictable decisions by government institutions as some of the key issues investors considered before committing capital.
The NMDPRA chief executive further stated that effective regulation went beyond issuing licences and enforcing compliance. According to him, regulation should provide certainty and create an environment where businesses could plan effectively and investments could grow.
He said the authority was strengthening collaboration with other government institutions, noting that effective regulation depended not only on sound policies but also on consistent implementation.
“When institutions work together, the industry experiences a more coordinated and predictable regulatory environment,” he said.
Umar said the implementation of reforms would ultimately determine the level of confidence investors had in Nigeria’s regulatory system.
“The true measure of any reform is how it is implemented. Every licence issued, every inspection conducted and every regulatory decision contributes to confidence in the regulatory system,” he stated.
He assured stakeholders that the agency would carry out its mandate fairly, consistently and transparently to support responsible investment and the continued development of Nigeria’s midstream and downstream petroleum industry.
