₦airaland Forum

Please can some explain why dangote is buying crude sold in Nigeria with dollars. What's the motive behind that, is that how other oil producing nation like saudi and the rest do, do they trade crude with the us dollar, if dangote is experiencing all this ,how will foreign investors cope ,please can someone explain??

Lol if they explain Nigeria to you and you understand you're definitely mad ,no one understands Nigeria

Make you no worry about Dangote.

Bade007:
Please can some explain why dangote is buying crude sold in Nigeria with dollars. What's the motive behind that, is that how other oil producing nation like saudi and the rest do, do they trade crude with the us dollar, if dangote is experiencing all this ,how will foreign investors cope ,please can someone explain??

The motive: "Nigerians must suffer"

Saskay44:
Lol if they explain Nigeria to you and you understand you're definitely mad ,no one understands Nigeria

That's a testament to your intellect, not Nigeria itself.
There is a simple explanation to the question.

Bade007:
Please can some explain why dangote is buying crude sold in Nigeria with dollars. What's the motive behind that, is that how other oil producing nation like saudi and the rest do, do they trade crude with the us dollar, if dangote is experiencing all this ,how will foreign investors cope ,please can someone explain??

That is because private companies are in charge of drilling and they sell at international price
before Dangote and they repatriate their profit as dollar.
Even Nigeria's budget is pegged to the dollar price of oil.

To sell in Naira without issues, the government should take over some oil blocks,
drill its own oil and then sell to Dangote in Naira.

Because he is a businessman and he wants to make profit.

What is difficult to understand in that?

Bade007:
Please can some explain why dangote is buying crude sold in Nigeria with dollars. What's the motive behind that, is that how other oil producing nation like saudi and the rest do, do they trade crude with the us dollar, if dangote is experiencing all this ,how will foreign investors cope ,please can someone explain??

@OP... See the reasons here:

Nigeria have large oil field discovered in the 60s..at the time.till even now, we can't get it off the ground..so the people that help us to discover them now ask us to pay them to help us get it out, but there is still another problem...to refine it and turn it to fuel...

Because we don't HV huge monies to pay them, we decided to pay them in oil that they helped remove from the ground...that was how we signed the oils joint venture agreement of 50years each for a set of oils field...we have a 60:40 sharing agreement...

In that document, they stated that the FG will not mandate them who to sell their part to..or where to sell their share to..and even if they would sell them in Nigeria, it must b in foreign currency...we agreed and signed...still they didn't sell their in Nigeria..cuz we don't have refineries who might buy them..and alone the decades they found markets in Europe where they sell theirs...

Now back to the Nigeria share of the crude expired.....

Bade007:
Please can some explain why dangote is buying crude sold in Nigeria with dollars. What's the motive behind that, is that how other oil producing nation like saudi and the rest do, do they trade crude with the us dollar, if dangote is experiencing all this ,how will foreign investors cope ,please can someone explain??

Now to economics, any country which doesn't drive in a large amount of other people wealth into their country will not progress.. that's the lame man explanation of economics... So to drive other people's. Money into ur own country, many countries started creating stuffs needed by others so when the others buy them, the buyers send their monies into the sellers country... It led to innovation ND technology advancement...

But some countries like Nigeria etc have no good heads to create things out of the blue, so they resorted to selling things they already have naturally that other countries need so as to mk more money and drag others money into the country... With this conceot the federal government have only one thing to sell ... Oil...

The oil became the highest source of drawing other courtries money into Nigeria and ensure economics growth.. so that sale of oil became the primary source of scarce FX into the country to help the economy grow...

As years pass Nigerian firm. Like Dangote created his own refinery ND wanted the FG to sell that same crude to him in naira... If they do, there will not be more than enough crude to do export and earn foreign monies...

Now Dangote is trying to expliot a CBN act which states that all transactions within the territory of Nigeria must be carried out in the local currency, the NAIRA.. anything otherwise will lead to jail term....

So I hope u are satisfied with this explanations