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The Central Bank of Nigeria recently disclosed that Nigeria’s $14.58 billon expended on importation of petroleum products in 2023 drastically reduced by $7.87 billion, or 54 per cent, to $6.71 billion in 2025. In 2024, the figure had begun to drop by $3.2 billion, or roughly 22 per cent, to $11.38 billion.
While we acknowledge that the government’s policy to sell crude petroleum to Dangote Refinery and other local refineries must have significantly contributed to the stability of the supply of petroleum products in Nigeria, we are of the opinion that a greater portion of the success story is due to the foresight of Dangote Refinery and its staying capacity to fend off denizens of Nigeria’s downstream petroleum sub-sector who tried to abort the naira-for-petroleum scheme and halt the operations of the refinery with all kinds of subterfuge.
We recall, with sadness, how importers of petroleum products and the two major petroleum sector trade unions allegedly connived to derail Dangote Refinery from the noble assignment that the Nigerian National Petroleum Company Limited continuously failed to carry out.
Of course Aliko Dangote is in business for profit, but his vision has well served the Nigerian citizens, who have had to endure several false-starts that were announced by government-owned NNPCL.
In more than two decades, NNPCL, with its four idle refineries and legion of underworked employees, consistently failed to produce petroleum products, despite the huge sums that the government continuously spends on it for the so-called Turn Around Maintenance that has practically become a drainpipe.
Also, the stable and regular supply of petroleum products by Dangote Refinery and others, government’s naira-for-petroleum policy for local refineries and the consequent reduction of importation of petroleum products have greatly contributed to the stability of the naira against the American dollar, the currency of international crude petroleum trade.
As the demand for the dollar to pay for imported petroleum products reduces, the pressure on the naira reduces. Indeed, the naira has gained strength, from mid-2023 when subsidy was removed from petrol and the foreign exchange, which drastically shot up from N460 to N1,535 against the American dollar.
Between late 2024 and early 2025, foreign exchange rate undulated, but rose as high as N1,700 in exchange for the American dollar. But with the consistency of local production of petroleum products since 2024, the exchange rate has significantly reduced. It appears to have stabilized around N1,400 in recent months.
We are optimistic that when BUA and other refineries begin to produce and supply petroleum products into the market, the naira will gain further strength, and the cost of living will go down, even as the law of demand and supply kicks in to reduce the price of petroleum products.
However, we hope that Nigerians will not “invent” another “imported addiction” that will divert the nearly 40 per cent of foreign exchange inventory that was hitherto committed to importing petroleum products. That will defeat the purpose of having local refineries and selling crude petroleum for naira.
Nigeria will be able to take advantage of the freeing of the foreign exchange regime from the stranglehold of importation of petroleum products only if the government comes up with appropriate and effective macroeconomic policies that can revive the comatose real sector of the economy.
The Nigerian economy must be geared to produce, at least, the strategic consumer goods needed by Nigerians. These include food, clothing, housing and household materials and petroleum products. The economy must also be able to produce industrial raw materials and industrial spare parts to guarantee steady production by its manufacturing companies.
The best place to start is to use the new forest guards to secure Nigeria’s farms so that farmers can start producing the food products as well as agricultural cash crops that can be exported to earn the hard currency that is needed to shore up Nigeria’s foreign reserve and strengthen the naira.
The foreign reserve portfolio will even receive a boost if Dangote Refinery and other local refineries can continue to export petroleum products, and if the quantity and price of Nigeria’s crude petroleum rise further in the international market.
Government must give a new impetus to the agro-allied sector, expand the railway system, strengthen the electricity sector, and revive the manufacturing sector of the economy. Nigeria cannot continue to import strategic consumer goods and hope to experience economic turnaround.
As much as we congratulate Nigeria for the significant reduction of foreign exchange spent on importation of petroleum products, it must be underscored that this cannot be sustained for long unless the government revives the comatose real sector.
