FOLLOWING the recent Federal Executive Council (FEC) approval of the continued implementation of the Naira-for-crude policy, the Federal Government has put to an end, the lingering conflict between the Nigerian National Petroleum Cooperation Limited (NNPCL) and the local petroleum product refiners in the country, especially the 650,000 barrels of crude oil per day capacity refinery, owned by Nigerian billionaire businessman, Alhaji Aliko Dangote.
This is a welcome development, given the plight of Nigerians who have been subjected to various forms of economic hardship arising from the unstable prices of refined petroleum products in the country.
Beyond the accolades the federal government has been receiving on the policy, it is an economic absurdity for a country like Nigeria to entangle her citizens in an economic slavery that permits the relegation of her currency to the background in preference for the American dollar. This is especially so as many nations of the world are presently strengthening their economies by de-dolarising their economic activities.
Apart from ensuring strict compliance with the use of their local currencies as media of exchange in these countries, some of them are equally coming together as a group known as BRICS (Brazil, Russia, India, China and South-Africa) with a view to fashioning out a common currency of international trade among them that is neither the Dollar nor the Euro or the British pounds sterling.
In our view, therefore, it behooves the Nigerian economic planners to drastically reduce the pressure on the nation’s foreign reserve by protecting the Naira from unfair competition with currencies such as the American Dollar, the British Pounds and the European Union’s Euro. This, we believe can be achieved by reducing individuals and companies’ heavy reliance on foreign exchange for business transactions.
Purchasing goods that are made in Nigeria with foreign currency normally subject prices of such items to the forces of demand and supply of foreign exchange.This is often against depleting economies such as Nigeria’s. If not avoided, this can plunge the country into a state of difficult-to-control hyperinflation.
Just like the Dangote Refinery has already responded by reverting to the sale of her refined Premium Motor Spirit (PMS), also known as petrol in Naira to marketers, it is only logical for all the local refineries in Nigeria to reciprocate the federal government gesture by selling their products to Nigerians in the nation’s currency.
There are many benefits of spending only the country’s currency, the Naira in Nigeria on locally produced goods and services. One of such is that it helps to ensure that only goods and services that are not locally available are subjected to purchases with foreign currencies like the American Dollar.
It is exciting to note that the balance of trade between the US and Nigeria for the first two months of 2025, totaling about $1.33bn was in favour of the country with a trade surplus of $44.3m. As commendable as this may be, greater efforts must be put in place to sustain it, even against other nations of the world.
Furthermore, Nigeria must take advantage of the fact that the import tariffs imposed on its exports to the US do not include the oil and mineral sectors and also intensify actions towards increasing the production of goods and services for both local consumption and exports in the country. In that way the nation’s economy would be insulated from the vagaries of the world economies, irrespective of the intention it tends to serve at the long run.
This is one of the ways the country can effectively ward off the growing threats of falling oil prices across the world to Nigeria’s 2025 budget and beyond.
Time has come for the most populated black nation in the world to take advantage of Donald Trump’s economic war with China and other emerging world powers to reposition economy for global relevance in international affairs and benefits of its citizens at home.
