In 2015, 1 CFA franc in Cotonou would have given you N0.25 (or 25 kobo); today, you will get N2.50. If you run the numbers, that is a 10X appreciation over the Naira in less than ten years! Kenyan Shilling has delivered something closer. 

For South Africa’s rand, the Naira has lost a factor of 6 over the same period (1 Rand was about N15 in 2015; today, it can buy N90). Against the US dollars, Naira officially is off by a factor of 3!

So, even though we open the day writing about the Euro, British Pounds and the US dollar, the issue is that the Naira has underperformed in Africa in the last decade. 

For years, Nigerians enjoyed the flip where our currency was outperforming our neighbours’ currencies. People would go to Cotonou to buy clothes, cars, fridges, etc in the port, and bring them into Nigeria. Today, they’re the ones coming to buy our foodstuffs, and the major challenge in the Nigerian Customs is to prevent smuggling of foodstuff out of Nigeria. 

Now you know why the Cotonou’s old-decades cheap second-hand clothes are no more affordable in Nigeria. You may ask: how do we fix this problem? From a village boy perspective, I will say, reorder the architecture of the Nigerian economy and de-financialize it. Today, the economy of Nigeria has been financialized. 

Though what he was doing was not on my horizon, after reading books, I do conclude that Nigeria’s IBB (Babangida) was a good operator even though he scaled many bad things in the country. I mean he built Abuja,  3rd Mainland Bridge,  and many other catalytic infrastructures. Yet, he messed up with SAP (structural adjustment programme), and in the bid to recover, he liberated the banking & financial sector at scale, without connecting them to manufacturing.

Today, from GTBank to Zenith Bank, Access to modern UBA, and beyond, some of the leading banks in Nigeria were created within 1989 to 1993, and a policy framework made that possible.   Just like that, the financialization of Nigeria began, and that started the erosion of the core pillars of Nigeria. He made finance better but ignored manufacturing!

In the 1950s, 1960s, 1970s and early 1980s, nobody knew who owned banks because our economy was managed by industrialists and manufacturers, from Aba to Ibadan to Kano. But SAP sapped Nigeria, and turned flipping and exchanging Naira and USD as the fastest way to create wealth. We all bought into it, and nobody wants to build anything. Why build if you can flip Naira and become richer? People, we need to be making things in Nigeria to help Naira.

Comment in LinkedIn Feed

Comment #1: we spent the last 3 decades flipflopping currencies. Who has time to build factories when you can make more money with less risks trading money. The results of our 3 decades long actions have fully matured. Guess what, the actions we are taking now which is short termed (survivalism) to solve that problem will also mature soon and the results will be equally bad. Let no one deceive us, we will be in this survival mode for a while because we have learned to take advantage of the opportunities it presents.

Comment #2: For years, many artisans from Cotonou enjoyed working in our country because the naira used to be stronger than their CFA franc. However, today they are gradually returning to their home countries. This shift is due to the changing economic dynamics, including currency devaluation and economic instability, which have reduced the financial incentives for them to work abroad.

Nigeria’s importation of petroleum products from Malta has witnessed an astronomical increase, rising 43-fold to reach a staggering $2.08 billion in 2023, the highest in a decade.

This astronomical surge comes against the backdrop of ongoing allegations by Aliko Dangote, Africa’s richest man and chairman of the Dangote Group, implicating certain personnel within the Nigerian National Petroleum Company (NNPC) in potentially dubious oil blending activities in Europe.

According to data from Trade Map, an authoritative source on international trade statistics, Nigeria’s imports of petroleum oils and oils obtained from bituminous minerals experienced a dramatic jump in 2023. From a modest $47.5 million in 2013, these imports ballooned to $2.8 billion, representing a 342% increase.

The data reveals a pattern of fluctuation in import values between 2013 and 2016, with a peak of $117.01 million in 2015, followed by a sharp decline to $13.32 million in 2016. Notably, from 2017 to 2022, there were no recorded petroleum imports from Malta, making the sudden resurgence in 2023 all the more intriguing.

The unexpected increase in petroleum imports from Malta has drawn considerable attention, particularly in light of recent statements made by Aliko Dangote. Dangote has accused certain individuals within the NNPC, along with international oil traders, of establishing a blending plant in Malta.

Malta, with its strategic location in the Mediterranean and its history as a shipping and logistics hub, plays a unique role in global trade. While not traditionally a major player in the oil markets, Malta’s infrastructure and geographic positioning make it an attractive location for various kinds of logistical operations, including those related to the blending and redistribution of petroleum products.

During a session at the House of Representatives, Dangote stated, “Some of the NNPC people and some of the traders have opened a blending plant somewhere off Malta. We all know these areas, we know what they’re doing. It’s not that we don’t know…”

He added that they are importing cheap and bad fuel, damaging peoples’ vehicles in Nigeria.

Dangote made the allegation after Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), asserted that local refineries, including the Dangote Refinery, were producing inferior products compared to imports

Blending plants, unlike refineries, do not have the capacity to process crude oil into various petroleum products. Instead, they are used to mix re-refined oil—such as used motor oil that has been cleaned and treated—with additives to create finished lubricant products.

This distinction is crucial in understanding the nature of the operations allegedly tied to NNPC personnel.

In response to these allegations, Mele Kyari, the Group Chief Executive Officer of NNPC, issued a categorical denial. Kyari stated, “To clarify the allegations regarding the blending plant, I do not own or operate any business directly or by proxy anywhere in the world with the exception of a local mini Agric venture. Neither am I aware of any employee of the NNPC that owns or operates a blending plant in Malta or anywhere else in the world.”

Kyari further noted that any such plant would not influence NNPC’s operations or strategic decisions. He also vowed to take action against any NNPC personnel found to be involved in these activities.

“For further assurance, our compliance sanction grid shall apply to any NNPC employee who is established to be involved in doing so if availed and I strongly recommend that such individuals be declared public and be made known to relevant government security agencies for necessary actions in view of the grave implications for national energy security,” he said.

However, the surge in oil imports from Malta and the accusations against NNPC personnel have fueled speculation about the possible reasons behind the recent attack on Dangote Refinery by the NMDPRA.

Some energy industry analysts suggest that the alleged blending plant in Malta may be the reason oil sector regulatory agencies are frustrating the efforts of the Dangote Refinery to start full operation. Dangote’s 650,000 bpd capacity refinery, at completion, is expected to disrupt existing power dynamics within Nigeria’s oil industry, leading to resistance from established players.