The decision to sell crude to Dangote Petroleum Refinery and other local refiners in naira will have a profound positive impact on the economy, experts have said.
Finance and economic experts were unanimous yesterday that the policy directive by President Bola Tinubu-led Federal Executive Council (FEC) has potential to reduce general costs of living, strengthen the country’s currency and foreign exchange (forex) position and underpin long-term development of local industry.
The FEC on Tuesday approved the sale of crude to local refineries for payment in naira and for the refineries to sell their products in the domestic market and accept payment in naira.
Experts said the decision will positively impact key fundamentals of the economy including inflation rate, forex rate, employment, access and cost of stable energy, susceptibility to global fluctuations and general economic growth and stability.
Civil society organisations (CSOs) and activists also commended Tinubu for his visionary leadership and statesmanship, noting that by such decision, the president has shown that the economy and Nigeria as a nation are his priorities.
Experts who spoke yesterday included Professor of Economics, Sheriffdeen Tella; Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf; Managing Partner, Biodun Adedipe and Associates, Dr Biodun Adedipe; Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe and Managing Director, HighCap Securities, Mr. David Adonri.
Others included Managing Director, Ambosit Capital Managers, Dr. Wahab Balogun; Managing Director, SD & D Capital Management, Mr Gbolade Idakolo; Civil Activist, Tony Nyiam; President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar; Senator Mohammed Sani Musa, The Arewa Think Tank (ATT) and several civil society organisations (CSOs).
They agreed that the decision by Tinubu showed pragmatism and depth of understanding of the economic reforms, noting that strengthening the domestic oil and gas sector would have positive multiplier effects on the overall economy.
Tella said the decision would lead to reduction in general costs of goods and services while boosting the country’s forex position.
“That’s the right thing to do. If customers are using foreign currencies to pay for goods in the country, it will put pressure on the naira and lower its value because those customers will have to buy the foreign currencies with naira to pay for the products.
“So, Dangote and others buying crude oil in naira is the best while those importing crude oil from outside will pay in forex because they will be paying into our foreign account. The implication is that Dangote and others’ fuel will be cheaper than imported fuel in our local market, which is good for our economy in terms of cost of production and cost of living. It will also not add to pressure on the naira to cause its depreciation,” Tella, a globally renowned economist said.
Yusuf described the decision as a welcome development that will go a long way to ease the current pressure of prices of petroleum products in the country, especially given the capacity of the Dangote Refinery.
