Nigeria’s Depot and Petroleum Products Marketers Association (DAPPMAN) has raised concerns about the country’s naira-for-crude oil policy, warning that it could destabilize foreign exchange reserves and deter investment.
The Nigerian National Petroleum Company (NNPC) had initially suspended the policy but is reportedly negotiating a new agreement with the Dangote refinery as the current deal expires in March.
DAPPMAN’s key concerns:
- FX instability: Oil trade is traditionally conducted in U.S. dollars, ensuring stability.
- Investor risks: A shift to naira-based transactions may discourage foreign investment.
- Historical precedent: Similar policies in Venezuela led to economic turmoil.
DAPPMAN emphasized that while strengthening the naira is a priority, reforms should address fundamental economic weaknesses rather than disrupt global trade norms.
Source: thecable.ng
