Cryptocurrencies

Nigeria launches oil-for-naira program to stabilise local currency

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Nigeria has unveiled an oil-for-naira program aimed at stabilising the rapidly declining value of the naira. 

On October 1, the Nigerian National Petroleum Company Limited (NNPC) began selling crude oil to billionaire Aliko Dangote’s new refinery in naira. 

The initiative is part of broader efforts to reduce pressure on the naira, which has lost more than 60% of its value this year. 

The NNPC is expected to supply 385,000 barrels of crude oil per day to Dangote’s refinery, which will subsequently sell petroleum products in the local currency. 

This move is designed to address Nigeria’s currency struggles by reducing dependence on foreign exchange for oil transactions. 

Zacch Adedeji, chairman of the Nigerian Federal Inland Revenue Service (FIRS), leads the technical committee overseeing the program and expressed optimism that it could ease the pressure on the naira. 

However, despite these efforts, the naira continues to struggle. 

Recent measures such as limiting access to global cryptocurrency exchanges and cracking down on illegal currency traders have failed to stop the currency’s decline. 

Nonetheless, Adedeji’s committee believes the requirement for the NNPC to sell crude oil exclusively in naira could help reverse this trend. 

To ensure the smooth implementation of the oil-for-naira scheme, a one-stop shop has been established to coordinate service provision from regulatory agencies, security, and other stakeholders. 

“Diesel will be sold in naira by the Dangote refinery to any interested off-taker, and PMS [petrol] will be sold to NNPC,” said Adedeji. 

Despite the initiative’s potential, concerns have been raised about a reported disagreement between Dangote Refinery and the NNPC. 

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