Business
Currency crisis looms as fiscal buffers dwindle
LAGOS – The continued dwindling of the fiscal buffers- foreign reserves, excess crude account, (ECA) against the backdrop of rising and stable oil prices at the international market is responsible for the strengthening expectation that the nation’s currency, the naira, will dramatically lose value, Business Day investigations have shown.
Also, the current gap of over N13 between the official and parallel market rate which is creating arbitrage opportunity for forex dealers and lose fiscal stance of the federal government among others, is increasing dealers appetite for hedging through the growing desire to switch from Naira to foreign currency denominated deposits. The implication, they argue, is that naira will witness more depreciation.
Razia Khan, analyst with the standard chartered bank, London said, “It is correct that fiscal policy plays a key role in shaping expectations. Monetary policy has done pretty much what it can to restore FX stability. But expectations regarding the sustainability of a stable FX rate are heavily influenced by fiscal policy.
By running down its external and fiscal buffers, the ECA, Nigeria proves itself to be especially susceptible to oil price volatility. In the event of an oil price (or oil output) shock, the perception is that Nigeria will not be able to defend its FX rate. Markets are forward looking, hence the pressure on the currency now. Monetary policy will continue to try to restore stability – but it can only do so much.”
Analysts and monetary policy committee members are of the opinion that this portends danger for the economy as the Central Bank of Nigeria is getting closer to the limit of its monetary policy, stressing that the projected 6-9 percentage inflation rate can only be achieved with stable currency.
A currency crisis is a sudden devaluation of a currency which often ends in a speculative attack in the foreign exchange market. A currency crisis may result from chronic balance-of-payments deficits or from market speculation about the ability of a government to back its currency.
Although most of the analysts who spoke with BusinessDay did not see devaluation as the viable option in view of the import dependent nature of our economy, they wonder why Nigeria with a $30bn current account surplus and with oil prices at $100 per barrel is not seeing an accretion in its foreign reserves.
Besides, they say that considering the rate at which ECA is being depleted, we may wake up next year to discover that nothing is left in the account.
Another concern is the fact that no one seems to be in charge or accountable for management of oil income and questioned the relevance of the economic management team.
“That is why you have all the noise of accusation and denial with regards to what has accrued to the NNPC that is not remitted to the nation’s coffers,” says one close currency watcher
“Somehow, somebody will have to make sense of the oil production and revenue numbers. We are all going to pay a huge price for negligence as CBN can not continue to defend the naira as its balance sheet has very little wiggle room, he told BusinessDay.
Bismark Rewane in recent LBS breakfast meeting for February said that weaker naira will impair earnings of banks and also increases risk of default on dollar-denominated loans.”
Doyin Salami, in his contributions at the last MPC meeting said “From the perspective of economics theory, a persistent surplus on our current account, resulting from high oil price, should see the Naira strengthen. However, the failure to build reserves has resulted in strengthening expectation of that the Naira will lose value. This expectation has been manifested in a continuing switch from Naira to foreign currency denominated deposits –a trend I had previously described as “retail hedging.”
Unless the Fiscal side shows significant improvement imminently, the options for monetary policy may become glaringly inconsistent with the objectives and policy direction for the economy in Nigeria. For monetary policy, the challenge of managing the internal and external value of the Naira is a core element of its mandate. Achieving inflation rate of 6 ‐9 per cent in 2014 requires a stable currency.”
Salami further observed that the model articulated, in various documents, for the growth and development of the larger economy in Nigeria is predicated on Import substitution and for CBN to achieve price stability, “import substitution requires a stable, even strong currency.”
He said that given the data and information laid before the committee members “the immediate and emerging build up of banking system liquidity, it is clear that there is a need to respond to the pressure on the currency and forestall the build-up of further pressure. However, it is increasingly clear that we are approaching the limits for using the cost of credit as a management tool without inflicting damage on the growth and development aspirations of the economy.”
Sarah Alade, deputy governor and member of the MPC said, “Already, available data suggest that Gross Foreign Direct Investment (FDI) and portfolio inflows decreased significantly in the last quarter of 2013. Given that monetary policy is approaching its limit, there is need to allow for more flexibility in the exchange rate”
Suleiman Barau, another member of MPC said that the current crisis was “aggravated by activities of politicians who may have been forced to recourse to the use of foreign currencies to avoid charges associated with Naira cash withdrawals. The aggravated demand for foreign exchange (for transfers/Letter of Credit valid) that we have seen in 2013 is largely in the area of invisibles which has increased by 23.8% from 24% ($13.3b) to 48.2% ($26.1b) during corresponding period in 2012.”
Kingsley Moghalu, deputy governor and also a member of the committee said, “The role of fiscal factors in the current difficulties, marked by a severe decline in the Excess Crude Account over the past year, thus leaving the country dangerously vulnerable to external shocks as a result of the lack of fiscal savings. There is no indication that this situation will change in the near to medium term.”
– BUSINESS DAY
The Dangote Group has received the coveted Road Safety Corporate Excellence Award for its outstanding contributions to safer transportation and accident prevention initiatives from the Kogi State government, in Lokoja.
Similarly, the Pan-African conglomerate received the commendation of road transport industry operators for its sustained support for initiatives aimed at reducing traffic accidents and safeguarding lives.
According to the government which presented the award, it was to celebrate the Group’s outstanding contributions to promoting safer roads, supporting accident prevention initiatives and advancing collaborative efforts aimed at protecting lives along one of Nigeria’s most strategic transportation corridors.
The award was presented before a gathering of government officials, road safety regulators, transport operators, industry leaders and other stakeholders, where participants explored innovative solutions and partnerships required to reduce road crashes, improve traffic management, and strengthen safety standards across the state and beyond.
Kogi State Commissioner for Transport, Hon. Atuluku Victor Levi, who presented the award said it underscored the company’s growing reputation as a champion of safe transportation practices and its commitment to partnering with government and regulatory agencies to improve road safety outcomes across Nigeria.
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According to him, the recognition highlights the company’s longstanding collaboration with the state government and road safety agencies to promote responsible road use, enhance driver safety awareness, and support initiatives that strengthen Nigeria’s transportation ecosystem.
“As one of Nigeria’s largest industrial conglomerates and a major user of the nation’s road network, the Group has continued to champion safety standards across its logistics and transport operations.
“Kogi State occupies a strategic position within Nigeria’s transportation ecosystem, serving as a vital transit corridor linking several states and geopolitical zones. The state’s road infrastructure facilitates the movement of people, goods and services across the country, making stakeholder collaboration critical to reducing road crashes, improving mobility and supporting economic growth”, he stated.
Receiving the award on behalf of the Company management, Abdullahi Aliyu, Assistant Divisional Director, Dangote Cement Transport (DCT), Obajana, thanked the Kogi State Government and road safety stakeholders for the recognition saying the recognition would only spur the Group to do more to support road safety initiatives.
“This award reflects Dangote Group’s unwavering commitment to safety as a core value across all our operations. We remain dedicated to supporting initiatives that promote safer roads, protect lives and contribute to sustainable economic development” Aliyu said, adding that road safety remains a shared responsibility requiring continuous partnership between government, corporate organizations and road users.
“At Dangote, we believe that every journey should end safely. We will continue to invest in safety awareness, driver training and responsible transport practices that help make our highways safer for all users,” he stated.
Reaffirming the company’s commitment to maintaining high safety standards within its transport operations, Aliyu pointed out “safety is not just a regulatory requirement; it is an integral part of our corporate culture. We are committed to strengthening collaborations that improve road safety outcomes and reduce preventable accidents across the communities where we operate.”
Furthermore, the Dangote Cement Transport Director said the recognition aligns with the Company’s broader sustainability agenda and supports the objectives of the United Nations Sustainable Development Goals (SDGs) as well as reinforcing the Group’s reputation as a responsible corporate citizen committed to promoting safer roads, protecting lives and contributing to sustainable development in Nigeria.
“At Dangote, Road safety is a collective responsibility, and partnerships such as these are crucial to saving lives and strengthening Nigeria’s transport system. Our goal extends beyond business operations; it is about creating safer communities and sustainable mobility for everyone.”
Meanwhile, Stakeholders at the conference commended private sector organizations that have consistently supported road safety campaigns, noting that meaningful partnerships between government and industry are essential to addressing transportation challenges and improving public safety.
It would be recalled that the Dangote Cement Transport recently launched an ultra modern drivers lounge at its Ibese plant in Ogun state, where its drivers could rest and refresh before and after every trip to promote their well being.
Murilo Silva, the Head of Dangote Cement Transport urged the drivers to make maximum use of the lounge to eliminate fatigue by resting well and be in sound mind always
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.
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