Adebajo: Naira crude sale, purchase to reduce FX demand pressure

Nigeria is set to benefit from reduced FX demand pressure, transportation cost savings, and industrialization with the government's continued support for local petrochemical companies and efforts to increase local capacity to refine petroleum products. Tilewa Adebajo, CEO of CFG Advisory, shared insights on the potential impact of these initiatives. Adebajo clarified the current status of foreign direct investment (FDI) in Nigeria, emphasizing the importance of staying committed to reform programs to attract significant levels of FDI. He highlighted the government's decision to sell crude to local refineries, such as the Dangote refinery, as a move towards energy security and job creation. Adebajo estimated that Nigeria's savings from reducing oil product importation could reach $10 billion, emphasizing the direct benefits of supporting local refining industries. Additionally, he addressed the issues surrounding ways and means financing, stressing the need for remedial legislation to resolve outstanding debts and ensure proper financial governance. Adebajo addressed the controversy surrounding FDI inflows into Nigeria, clarifying that while there have been reports of prospective investments totaling $30 billion, actual FDIs have been lower. He emphasized the importance of maintaining reform programs to build confidence among foreign investors and improve the country's attractiveness for investments. Regarding the local petrochemical industry, Adebajo praised the government's decision to sell crude to local refineries like the Dangote refinery as a step towards energy security and job creation. He estimated that Nigeria could save up to $10 billion by reducing oil product importation and highlighted the additional benefits of job creation and industrial stimulation. Furthermore, Adebajo discussed the challenges surrounding ways and means financing in Nigeria, pointing out the illegality of securitizing ways and means as a form of repayment. He called for remedial legislation to address outstanding debts and ensure financial transparency and accountability in the country. In conclusion, Nigeria's efforts to support local petrochemical companies and expand refining capacity hold significant promise for the country's economy. By reducing FX demand pressure, saving on transportation costs, and promoting industrialization, Nigeria aims to strengthen its energy security, create jobs, and stimulate local industries.