Business
Asia to reduce Dollar Dependency
TOKYO – Recent market volatility over expected U.S. monetary tightening has made Asia keenly aware of its reliance on the dollar, boosting efforts to use local currencies for trade and other transactions.On Tuesday, China and Singapore announced they would introduce direct trading between their currencies. Beijing also said it would allow Singapore-based investors to take yuan funds raised in the city-state and invest them in mainland securities markets.
Singapore follows in the footsteps of London – which gained so-called RQFII status last week – and Hong Kong. The move, designed to promote use of the yuan and broaden the investor base in China’s markets, builds on other measures taken recently that aim to reduce Asia’s dependence on the U.S. dollar.
Earlier this month China signed a 100 billion yuan ($16.4 billion) swap deal with Indonesia. It has existing pacts with Australia, South Korea and a number of European countries.
South Korea this month signed currency-swap agreements with Indonesia, Malaysia and the United Arab Emirates worth around $20 billion. Officials say they’re considering more such deals, in addition to existing pacts with China and Japan.
Swap agreements – in which central banks pledge to provide each other with currency, usually on a short-term basis – often are enacted during periods of financial turmoil, but more recently have taken on a greater role in trade and diplomacy.The arrangements are small compared to use of the dollar for international transactions, which accounted for foreign-exchange turnover of around $4.65 trillion a day, or 87% of the global total, according to triennial survey conducted by the Bank for International Settlements in April.
Still, the swap deals help insulate Asian currencies a bit from the whims of speculative investors, and make it more likely their movements will reflect trade needs or economic fundamentals.
For China, the latest deals are part of efforts to boost international use of the yuan and move closer to a fully convertible currency and an open capital account.
More broadly, the deals aim to boost bilateral trade and reduce associated costs by allowing central banks to buy currencies from each other, making it easier for commercial banks to get hold of foreign exchange.
But most pertinent, in light of this summer’s market turmoil, is their role in improving financial stability. A Korean official said last week that reduced dependence on the dollar would help the country better cope with market volatility caused by the greenback.The Chinese and Korean governments “want to avoid dollar concentration and diversify their portfolio structure. They will continue these efforts,” Bank of Tokyo-Mitsubishi UFJ strategist Takahiro Sekido said.
At a meeting in Brunei earlier this month, Chinese Premier Li Keqiang told East Asian leaders it was imperative to strengthen the region’s financial safety arrangements by bolstering foreign exchange reserves and signing currency-swap deals. He also said China would work with other countries to look at using local currencies in East Asia’s crisis fund, the Chiang Mai Initiative.
A recent paper co-authored by Asian Development Bank Chief Economist Changyong Rhee found that wider use of the Chinese yuan and Japanese yen in international transactions would help Asia deal with local crises and curb its dependence on the dollar, bolstering the region’s economic stability.
In an interview ahead of the paper’s publication this month, Mr. Rhee told The Wall Street Journal that the Chiang Mai Initiative should consider diversifying its portfolio out of dollars to include yen and eventually yuan. But that can’t happen overnight, so greater use of Asian currencies for bilateral swaps, trade settlement and bond issuance are a good intermediate goal, he said.
Beijing began liberalizing the yuan in 2009 but capital flows into and out of China are still restricted, making it difficult for central banks to hold large quantities of reserves in yuan. Some Chinese officials have suggested opening the country’s capital account by 2020, though economists warn that moving too fast could lead to destabilizing outflows.
Some economists say that even the Japanese yen may not make an appropriate reserve currency.
Charles Adams, a visiting professor at the Lee Kuan Yew School of Public Policy in Singapore and former International Monetary Fund official, says Japan would need to further increase the liquidity and openness of its financial markets and improve policy transparency for the yen to be an effective reserve currency.
“Since Japan is doing a big monetary experiment, I can’t imagine people would want to hold yen until it’s all over,” he said, referring to Prime Minister Shinzo Abe’s economic policy, which includes aggressive bond-buying by the Bank of Japan, fiscal stimulus and structural reforms.
The Nigerian National Petroleum Company Limited (NNPC Ltd) claimed that it saved $3.4 billion through contract restructuring and optimisation between April 2025 and July 2026.
Group Chief Executive Officer, Bayo Ojulari, made the assertion in Abuja at the opening of the 25th Nigeria Oil & Gas (NOG) Energy Week, while highlighting the impact of ongoing reforms aimed at improving operational efficiency, reducing costs, strengthening partnerships, and enhancing value delivery to the federation.
Ojulari also stated that the national oil company had maintained full compliance with its joint venture cash call obligations.
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According to the scorecard presented by the NNPC Ltd, the $3.4 billion cost savings were realised through contract restructuring and optimisation initiatives across the company’s operations.
The reforms also contributed to an increase in government revenue, with the NNPC Ltd reporting a government take of N19.5 trillion, representing a 21.8 per cent year-on-year increase.
Besides, a major highlight of the report was NNPC’s 100 percent compliance with its joint venture cash call obligations across all its joint ventures from Financial Year 2025 to June 2026.
However, the company’s partners recorded a blended compliance rate of just 61 percent.
Of the 27 joint venture partners, only six were fully current with their obligations, while 13 recorded partial compliance with an average payment rate of 72 percent, and eight remained in significant default, paying an average of only 14 percent, prompting Joint Operating Agreement remedies.
The NNPC Ltd said it remained committed to sustaining its cash call obligations to support Nigeria’s target of achieving two million barrels of oil production per day.
Operationally, the company reported a six percent increase in crude oil production year-on-year and an 8.1 percent rise in gas production over the same period, reflecting improvements in upstream operations.
Ojulari also highlighted several strategic partnerships concluded since the last Nigeria Oil and Gas Conference, including a long term gas supply agreement with Nigeria LNG, progress on deepwater investments valued at over $20 billion, refinery related partnerships, industrial gas projects, and new gas supply arrangements.
Looking ahead, the company identified seven priority projects expected to drive production and gas infrastructure growth through 2027.
These, it said, included the UTM Floating LNG project, the OB3 East West Connector, the AKK gas pipeline, refinery technical enhancement projects, the Zabazaba deepwater development, the Owowo field, and the BSWAP project.
The state oil major added that the combination of cost optimisation, stronger operational performance, improved infrastructure reliability, and strategic partnerships would reinforce Nigeria’s energy security, boost government revenues, and support sustainable growth in oil and gas production.
Ojulari said the national oil company achieved 98 percent recovery across five crude export terminals between April 2025 and May 2026, up from one per cent at Bonny in June 2022.
He put current output at 1.71mbpd, the highest in five years, with the NNPC Exploration and Production Limited (NEPL) hitting a record 365,000 bpd.
Gas production, he said, reached 7.5 billion standard cubic feet per day (bscf/d) following the River Niger crossing on the Ajaokuta-Kaduna-Kano (AKK) Pipeline and inauguration of the ANOH Gas Plant.
Ojulari added that the NNPC Ltd had “zero tolerance for partners who are not able to fund their Cash-call” and had begun invoking default clauses.
He stressed collaboration over control, saying, “We have rid ourselves of any pseudo-regulation. We are not the super-regulator. Let them regulate. We want to work.”
Energia Limited and its Joint Venture partner, Oando Plc, have inaugurated the board of trustees of the Ndokwa West-1 Host Community Development Trust (HCDT).
The inauguration marked a significant milestone in strengthening sustainable development, transparency and community participation across their host communities in Delta State.
The inauguration, held in Asaba, also featured the signing of a Memorandum of Understanding (MoU) between the Energia-Oando Joint Venture and the seven host communities, in line with the provisions of the Petroleum Industry Act (PIA), 2021.
The event brought together representatives of Delta State Government, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), traditional rulers, community leaders, members of the newly inaugurated board of trustees, and other key stakeholders from the oil and gas industry.
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Representing the Governor of Deputy Governor, Delta State, Sir Monday Onyeme, Deputy Chief of Staff, Hon. Christopher Osaskwe commended Energia Limited and the host communities for successfully establishing the Trust and signing the Memorandum of Understanding.
He described the initiative as a demonstration of mutual commitment to partnership and sustainable development, while urging the newly inaugurated board to discharge its responsibilities with transparency, accountability and fairness.
He also encouraged host communities to continue protecting oil and gas infrastructure and embrace dialogue as the preferred approach to resolving disputes.
Managing Director, Energia Limited, Oladimeji Bashorun, described the inauguration as the beginning of a new chapter in the relationship between Energia and its host communities.
According to him, the company remains focused on building partnership, shared responsibility and sustainable development rather than dependency.
He noted that while the PIA provides a structured framework for host community development, Energia’s commitment to its host communities predates the legislation and has remained a core part of the Company’s operating philosophy since it achieved First Oil in 2009.
“Communities that host our operations should also share meaningfully in the opportunities created by those operations. Our success has always been closely connected to the success of our host communities,” Bashorun said.
He also disclosed that Energia has invested over N15.94 billion in community development initiatives since inception, supporting roads, drainage systems, healthcare facilities, educational programmes, scholarships, youth empowerment, solar-powered street lighting, community welfare initiatives and other social investments across its operational communities. He added that the Company dedicates 3% of its gross revenue annually to support sustainable development initiatives for its host communities.
Also speaking at the event, the Asset Manager of Oando, Seyi Fawora, reaffirmed the Joint Venture’s commitment to implementing the HCDT, noting that the partnership remains focused on building stronger, mutually beneficial relationships with host communities.
The representative of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Dennis Eyitemi, described the inauguration as a significant milestone in strengthening host community participation in development. He urged members of the Board of Trustees to remain accountable, transparent and committed to promoting the long-term welfare of the communities they represent.
Providing an overview of the HCDT framework, the Delta State Solicitor-General and Permanent Secretary, Ministry of Justice, Omamuzo Irebe, SAN, commended Energia for contributing beyond the statutory requirement prescribed under the Petroleum Industry Act and encouraged members of the Board to place community interests above personal interests while ensuring prudent management of the Trust’s resources.
The ceremony concluded with the swearing-in of the members of the Ndokwa West-1 Host Community Development Trust Board of Trustees. In his acceptance remarks, the Chairman of the Board, Chief Godwin Edeme, pledged the Board’s commitment to working with Energia Limited, Oando Petroleum Development Company and all stakeholders to ensure the effective implementation of the Trust for the benefit of present and future generations.
The establishment of the Ndokwa West-1 Host Community Development Trust represents another milestone in Energia’s long-standing commitment to responsible operations, stakeholder engagement and creating shared value for its host communities through sustainable, transparent and inclusive development. About Energia Limited
Energia Limited is a leading indigenous Nigerian exploration and production company with a proven track record of responsible hydrocarbon development and sustainable value creation. Since achieving First Oil in 2009, Energia has remained committed to operational excellence, environmental stewardship, and meaningful partnerships with its host communities, delivering lasting social and economic impact alongside its business growth.
Foreign direct investment (FDI) flow into Nigeria climbed to roughly $4 billion last year, according to UNCTAD’s World Investment Report 2026.
The report stated that “Inflows to Nigeria rose to about $4 billion, supported mainly by oil and gas–related IPF deals, including a major project valued at about $2 billion.”
The report indicated that Nigeria’s inflows were $1.6 billion in 2024, before increasing to roughly $4 billion (precisely $4.005 billion) in 2025 — reversing a downward trend that had seen inflows dip as low as $895 million in 2022. The figures place Nigeria among a cluster of West and East African economies that bucked a broader continental slowdown
According to the report, Nigeria’s outward investment also rose, from $408 million in 2024 to $1.19 billion in 2025, while its inward FDI stock reached nearly $93 billion by year-end.
“In Nigeria, deals included the sale of Shell’s onshore oil assets to the Nigerian consortium Renaissance Africa Energy and the acquisition of Lafarge Africa by Huaxin Cement of China, signaling both a wave of asset localization in the oil sector and continued Asian appetite for Nigerian industrial assets.
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On the Greenfield side, conglomerate Dangote Group emerged as an outward investor in its own right, backing a $3 billion chemicals project in neighboring Ethiopia — one of the 10 largest Greenfield projects announced across the continent in 2025.
Policy shifts also featured prominently in the report’s account of the investment climate. It noted that the government introduced sweeping fiscal reforms during the year, including a new minimum tax regime aligned with international standards.
“Nigeria, for instance, introduced a minimum effective tax rate of 15 per cent for multinational enterprises with revenues exceeding €750 million,” the report noted.
Alongside this, the report observed that Nigeria, together with Cameroon, moved to tighten incentive structures more broadly, as the two countries “replaced broad tax exemptions with tiered tax credits and strict eligibility requirements, such as job creation, local value addition and priority sectors.” Separately, the government rolled out targeted relief for the petroleum sector, introducing “performance-based tax credits for companies in the upstream petroleum industry, linking fiscal benefits to cost efficiency.”
The report also credited Nigeria with using regulatory innovation to court investors beyond the extractive sector.
It pointed to the Federal Government ‘s technology-focused reforms, noting that Nigeria “has used regulatory frameworks to reduce uncertainty for innovative firms,” citing the Startup Act and accompanying central bank rules that let sandboxes allow start-ups to test products with real users before facing the full weight of regulation.
On trade infrastructure, the report named Nigeria as one of five countries — alongside Côte d’Ivoire, Benin, Ghana and Togo — that committed under a regional agreement to harmonising customs and border procedures along the Abidjan–Lagos corridor, part of a wider West African push to cut transit times and integrate cross-border trade.
Africa as a whole, according to the report, saw FDI inflows fall sharply from an exceptional 2024, but the report noted that in West Africa, investment “rose in several West African economies, supported mainly by investment in natural resources and energy.”
Courtesy – The Punch
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