The Federal Government has deducted a total of ₦256.5 billion from the Federation Account during the first half of 2025 to fund critical gas infrastructure projects across the country. The deductions were made under the statutory Gas Infrastructure Fund (GIF), which was created to support the development, expansion, and maintenance of gas pipelines, processing plants, and related infrastructure aimed at boosting Nigeria’s energy transition and industrial growth.
According to official data obtained from the Federation Accounts Allocation Committee (FAAC) reports, the deductions were carried out between January and June 2025. Analysts note that these withdrawals highlight the government’s increasing focus on natural gas as a central pillar of Nigeria’s energy policy and economic diversification strategy. Gas, which Nigeria possesses in vast reserves, has been positioned as a transitional fuel that can simultaneously meet domestic energy needs and generate export revenue.

The GIF is a statutory provision that allows for deductions from the Federation Account to be specifically channelled into projects that will guarantee the sustainability of gas development. The ₦256.5 billion collected so far is expected to be deployed in accelerating the construction of pipelines such as the Ajaokuta–Kaduna–Kano (AKK) project, upgrading processing plants, and providing linkages that will enable industries and power plants to switch from costly diesel to cleaner and cheaper natural gas.
Government officials argue that the investment is necessary to unlock Nigeria’s vast potential in the gas sector. With proven reserves estimated at over 206 trillion cubic feet, the country remains one of the largest holders of natural gas in the world. However, poor infrastructure, limited financing, and regulatory bottlenecks have hindered the sector’s capacity to contribute optimally to economic growth.
The deductions, therefore, reflect the administration’s determination to fast-track the Decade of Gas initiative, first launched in 2021, which seeks to make gas the nation’s dominant energy source by 2030. President Bola Tinubu has repeatedly emphasised the need to harness gas as both a domestic growth enabler and an export commodity that can improve Nigeria’s foreign exchange earnings.
While the initiative has been applauded, concerns have also emerged over transparency and accountability in the utilisation of the deducted funds. Civil society organisations and some industry experts have called on the government to provide detailed reports on how previous allocations to the GIF were used, stressing that without proper oversight, the deductions could fall short of delivering meaningful results.
They also argue that given the scale of the challenges in the gas sector, more innovative financing options may be required in addition to statutory deductions. Partnerships with private investors, multilateral development banks, and foreign governments could help unlock the capital needed for Nigeria to achieve its ambitious gas infrastructure goals.
Meanwhile, oil and gas operators have expressed optimism that the deductions, if efficiently utilised, would provide the foundation for sustainable growth in the industry. They point out that inadequate infrastructure has long been a bottleneck preventing Nigeria from monetising its gas resources. With a reliable pipeline network and processing facilities, the country could reduce flaring, expand power generation, supply feedstock to industries, and create thousands of jobs.
The importance of gas infrastructure has also become more pronounced in light of the government’s push for Compressed Natural Gas (CNG) adoption as an alternative to petrol in the transport sector. The success of this initiative hinges largely on the availability of pipelines and distribution networks that can deliver gas to end users reliably and at affordable rates.
Stakeholders further note that a well-developed gas infrastructure will play a crucial role in stabilising electricity supply. Several power plants in Nigeria are gas-fired, but their operations are often hampered by erratic supply. Expanding and securing the gas pipeline network could significantly improve power generation capacity, thereby reducing the persistent outages that continue to plague businesses and households.
At the macroeconomic level, the deductions represent an investment in Nigeria’s long-term growth prospects. As global energy markets shift towards cleaner fuels, natural gas is increasingly being positioned as a transitional solution. By investing in infrastructure today, Nigeria is positioning itself to remain competitive in the evolving global energy landscape.
However, critics insist that proper monitoring frameworks must be instituted to track how the ₦256.5 billion is spent. They caution that without accountability, the country risks repeating the mistakes of past resource-driven funds that were mismanaged or diverted from their original purpose.
In conclusion, the Federal Government’s deduction of ₦256.5 billion for the Gas Infrastructure Fund in the first half of 2025 underscores its determination to leverage natural gas as a driver of industrialisation, energy security, and economic diversification. While the move signals progress toward unlocking the country’s immense gas potential, experts stress that transparency, accountability, and complementary private sector investment will be crucial in ensuring that these funds translate into tangible improvements in Nigeria’s energy landscape. With sustained political will and effective execution, the gas sector could become a cornerstone of Nigeria’s prosperity in the coming decades.
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