June 22, (THEWILL) – Nigeria’s much-publicised shift away from refined petroleum imports in 2023, following the commissioning of the Dangote Refinery, has not led to an anticipated rebound in the naira’s value. The mega refinery, which began operations in mid2023, was hailed as the solution to decades of foreign exchange outflow as Nigeria continued to import its fuel requirements. Official forecasts claimed that this shift would ease dollar pressure and lift the naira. Yet halfway through 2025, the currency remains weak ($1 – N1600 is just unacceptable), raising a simple but urgent question: If dollars are no longer draining from the economy through oil imports, why has the naira not strengthened?
Policymakers and market analysts expected that eliminating refined product imports, once accounting for more than 20 per cent of foreign exchange usage, would reduce overall dollar demand. The Dangote Refinery, with capacity to process 650,000 barrels per day, was seen as the vehicle to deliver this outcome. It was reported that Nigeria stood to save about $17 billion annually once the refinery reached full output. The Central Bank of Nigeria’s governor at the time, Godwin Emefiele, assured that the refinery would be encouraged to sell foreign exchange to commercial banks at reasonable market rates. The CBN and government also partnered to provide funding in both naira and dollars, reportedly around ₦125 billion for local expenses, along with dollar facilities to bring the refinery project to completion.
These interventions were intended to ensure that the refinery would promptly begin supplying local fuel for local and international consumption and free up foreign exchange in return.
With import based demand shrinking and with a deliberate strategy to save foreign exchange, why is the naira still weak, exchanging well above ₦1,500 per dollar? May I also state that crude oil production has also significantly increased from 1.2mbpd to about 1.6mbpd, which should easily translate to additional foreign exchange revenue with a higher market price today.
I am asking these questions because it is frustrating to accept the naira’s current reality. This is very unacceptable to me and millions of citizens who believe that the Nigerian economy and the local currency deserve better.
Data released by the National Bureau of Statistics show that the economy is on the path of growth and recovery, although this is yet to positively impact the lives of the average Nigerian who still struggles to eat even a meal a day. Things are tough on the streets. People are hungry and finding it very hard to survive these days.
The NBS however said Nigeria recorded a remarkable 51 per cent trade surplus in Q1 2025, with the oil and agricultural sectors contributing significantly to this feat. This means that we exported more than we imported.
“The merchandise trade balance for Q1 2025 remained positive at N5,172.31bn, indicating an increase of 51.07 per cent, compared to the value recorded in the preceding quarter,” the report noted.
So why is the naira still exchanging at this level? I know I am not an economist, but my basic knowledge of how these things work tells me that something is not adding up. If we are producing more and exporting more than we are importing, it should increase our foreign reserves and in turn make our currency stronger.
Like millions of Nigerians, who want inflation down so that we can buy more with our naira, I am only trying to understand why we have not seen at least a 20 per cent appreciation of the local currency against other currencies.
