₦airaland Forum

The naira has been on a free fall because of the scarcity of forex, considering that Nigeria as a country gets the bulk of it's forex from sale of crude oil, with the completion of various refineries in under construction in Nigeria won't it affect the flow of forex , especially as the refineries have to buy crude oil in naira, and as a result deepening the fall of naira?

Informed nairalanders please discuss.

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Yes. Our FOREX needs will greatly reduce

Mynd44:
Yes. Our FOREX needs will greatly reduce

True.. well said

vanitybutiwanti:
The naira has been on a free fall because of the scarcity of forex, considering that Nigeria as a country gets the bulk of it's forex from sale of crude oil, with the completion of various refineries in under construction in Nigeria won't it affect the flow of forex , especially as the refineries have to buy crude oil in naira, and as a result deepening the fall of naira?

Informed nairalanders please discuss.

Dangote will buy crude in dollars and also sell the refined crude in dollars. But the dollars will stay in Nigeria instead of going to refiners abroad some foreign countries will also buy from Dangote and pay in dollar.

Dangote and PH refinery will bring down the pressure on the naira sha. Last year, we spent about $24B importing refined oil

vanitybutiwanti:
The naira has been on a free fall because of the scarcity of forex, considering that Nigeria as a country gets the bulk of it's forex from sale of crude oil, with the completion of various refineries in under construction in Nigeria won't it affect the flow of forex , especially as the refineries have to buy crude oil in naira, and as a result deepening the fall of naira?

Informed nairalanders please discuss.

Depends on a few factors

we have an OPEC quota of 1.6mpd (we haven't even met that )
But the deal here is domestic consumption is not added to OPEC allocation

Since crude sales is one of our biggest dollar source and petroleum products are our biggest dollar expense

So if we can keep dollar earnings same and reduce dollar spending its only natural our currency would be strengthened

But if we don't keep dollar earns constant by producing extra crude oil per day outside what er currently produce to feed the local refineries it won't have any effect

So you see it's technical

It's get more complex tok but I would leave it here