President Bola Tinubu on Tuesday had a high-level meeting at the State House, Abuja, with members of the committee overseeing the implementation of crude oil and refined products sales in local currency.
The initiative is aimed at reducing pressure on Nigeria’s foreign exchange reserves by promoting domestic transactions in naira.
The committee, led by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, was assembled to brief the President on the progress of this strategic initiative.
Among the key figures in attendance are Mr. Mele Kyari, Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL); Dr. Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS); and Mr. Yemi Cardoso, Governor of the Central Bank of Nigeria (CBN).
Also present at the meeting are Mallam Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA); Mr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC); and Alhaji Aliko Dangote, President of the Dangote Group.
The purpose of the meeting is to provide the President with updates on the local currency sales plan, a policy introduced by the Tinubu administration to mitigate the strain on foreign exchange by engaging domestic refiners, starting with the Dangote Refinery.
In July, President Tinubu directed the NNPCL to begin selling crude oil to local refiners like Dangote in naira rather than foreign currency. The shift is part of broader economic reforms aimed at stabilizing Nigeria’s economy and reducing its reliance on foreign currencies for key energy transactions.
During a Federal Executive Council (FEC) meeting in July, Special Adviser to the President on Revenue, Zacch Adedeji, explained the rationale behind the policy. He stated:
“The sales of crude oil to Dangote Refinery and other local refiners will now be denominated in naira, with the sales of byproducts also conducted in naira. This move will significantly reduce the pressure on foreign exchange.”
AFREXIM Bank was selected as the pilot settlement bank for the initiative, facilitating the transactions between the NNPCL, local refiners, and distributors.
Details of the committee’s briefing to President Tinubu remain undisclosed at this time, but it is expected that the meeting will address ongoing efforts to streamline the policy and its potential impact on Nigeria’s economy and energy sector.
This policy underscores the Tinubu administration’s commitment to “thinking outside the box” to address Nigeria’s economic challenges, providing a localized solution to foreign exchange pressures.