Why Naira-for-crude Policy Is Best For Nigeria’s Economy – Atoyebi

Technical assistant on Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service (FIRS), Arabinrin Aderonke Atoyebi, has emphasised that the federal government’s Naira-for-Crude policy is a strategic move to bolster Nigeria’s economic growth.

Atoyebi highlighted that before the removal of fuel subsidies under President Bola Ahmed Tinubu’s administration, Nigeria grappled with unsustainable debt levels. The subsidy regime, she noted, disproportionately benefited the wealthy and certain political figures, while the general populace bore the brunt. This system compelled the nation to import petroleum products that it could otherwise produce domestically.

In response to these challenges, the government introduced the Naira-for-Crude policy. This initiative aims to reduce Nigeria’s dependence on imported refined petroleum products, alleviate foreign exchange pressures, and optimise local refining capacities. The Federal Executive Council approved the policy that mandates the sale of crude oil and refined petroleum products in Naira for domestic consumption, strengthening local production and supporting broader economic reforms post-subsidy removal.

“It’s about making Nigeria act like a country that owns oil,” Atoyebi explained. “Sell our crude oil to local refineries in Naira, refine it, and sell the products within Nigeria, still in Naira. No more scrambling for dollars to trade our resources at home.”

The policy officially commenced on October 1, 2024, with the Nigerian National Petroleum Company Limited (NNPCL) supplying approximately 385,000 barrels per day of crude oil to the Dangote Refinery, with payments made in Naira.

Atoyebi noted that the Implementation Committee, chaired by Dr. Zacch Adedeji, executive chairman of FIRS, oversees the policy’s rollout. The policy is anchored on four main principles: crude oil allocation to local refineries, transactions conducted in Naira, the Central Bank of Nigeria setting a reference exchange rate, and the Nigerian Ports Authority overseeing the process through a One-Stop Shop for clearances and levies.

She emphasised the oil sector’s pervasive impact on Nigeria’s economy, stating, “We cannot discuss infrastructure, healthcare, education, or even pay salaries in many states without relying on oil revenue.”

The Technical Sub-Committee ensures adherence to these principles while aligning the policy with national objectives such as reducing reliance on foreign currency, achieving self-sufficiency, and maintaining market stability.

“The Naira-for-Crude policy is designed to ease the burden on our economy while strengthening relevant sectors,” Atoyebi stated. “It reduces pressure on the dollar, helps us save our foreign reserves, and paves the way for a more stable financial system.”

For stakeholders like refineries, marketers, and government bodies, the policy simplifies business operations, facilitates transactions, and encourages investment. For the average Nigerian, the goal is to ensure fuel availability, reduce reliance on imports, and secure energy needs effectively.

The policy also fosters a conducive business environment, diminishes monopoly power, and ensures competitive pump pricing, providing citizens with a sense of inclusion and choice.

“Naira-for-Crude makes a lot of sense,” Atoyebi concluded. “We’ve been doing things the hard way for too long, buying back what we produce and spending dollars we don’t have. This new policy signifies Nigeria taking control and fixing issues from within. It’s not just policy; it’s common sense.”

She affirmed that the policy serves as a blueprint for the future, changing how Nigeria manages its resources and taking back control. “It’s time for Nigeria to transition from merely managing to thriving. We’re making significant strides, and there’s no turning back.”