President Bola Tinubu has taken a significant yet controversial step toward economic reform by directing the Nigerian National Petroleum Company Limited (NNPCL) to begin selling crude oil to local refineries in naira. This directive includes high-profile refineries like the Dangote Refinery, signaling a foundational shift in Nigeria’s oil trading policies. Though only half of the intended “naira-for-petroleum” strategy has materialized so far, the implications are already rippling through both the local economy and international finance circles.
A Shift That Could Redefine the Naira
The idea is deceptively simple yet profoundly revolutionary: sell petroleum to Nigerian refineries in naira, and eventually require foreign buyers to purchase naira from the Central Bank of Nigeria (CBN) before buying Nigerian oil. This model could essentially transform the naira into a quasi-petrocurrency—one tied to the value and demand of crude oil. If fully realized, Nigeria’s currency could become more than a domestic tender; it could evolve into a vital instrument in global trade, particularly in the energy sector.
Already, the first wing of this policy has yielded tangible results. The Dangote Refinery has announced multiple rounds of petrol price cuts, prompting the NNPCL to reduce prices on its imported petroleum products. For the first time in recent memory, Nigerian citizens are witnessing local market forces compel government-affiliated institutions to respond to competitive pricing—an early victory for advocates of domestic production and local currency usage.
Internal Sabotage and the “Deep State” within NNPCL
However, the implementation hasn’t been smooth. Insiders within the NNPCL and its extended ecosystem, allegedly serving the interests of foreign powers, have reportedly obstructed the full rollout of this policy. These saboteurs seem intent on frustrating Tinubu’s reforms to force a policy reversal. The lack of full institutional compliance underscores the challenge of battling entrenched interests that have long benefited from Nigeria’s reliance on foreign currencies for oil trade.
The Game-Changer: Selling Oil Internationally in Naira
The second wing of the policy—requiring foreign buyers to purchase naira before buying Nigerian crude—is the crux of Tinubu’s bold strategy. This plan introduces a significant paradigm shift in how oil-exporting countries conduct transactions. By forcing international buyers to engage with Nigeria’s currency and financial system, the country can recapture some control over its economic destiny.
The ripple effects of such a move would be enormous. Nigeria would still receive convertible currencies—dollars, euros, and pounds—when foreign buyers convert their money into naira through the CBN. But it would simultaneously boost demand for the naira, strengthen its value, and reintegrate the currency into the global economic conversation. It’s a strategic effort to “eat the cake and have it“—gaining foreign reserves while fortifying the local currency.
Global Pushback: Expecting Economic Resistance
Tinubu’s move is bound to attract international resistance, particularly from North America and Western Europe. These regions have long dominated the architecture of global finance, designed post-World War II to serve their own strategic interests. They are unlikely to sit idly while a major oil producer like Nigeria retools the rules of engagement.
The United States, under Donald Trump, had already issued stern warnings to countries contemplating alternatives to the dollar in global trade. Trump once threatened 100% import tariffs on BRICS nations if they attempted to create a new reserve currency to replace the dollar. This kind of economic coercion underscores the lengths to which powerful nations will go to preserve the status quo.
BRICS Membership: Nigeria’s Strategic Imperative
One clear path forward is for Nigeria to seek full membership in BRICS (Brazil, Russia, India, China, and South Africa), transforming the group into “BRINCS.” Such a move would align Nigeria with a coalition that collectively holds over 40% of global GDP and more than half the world’s population. Being part of this bloc would enhance Nigeria’s bargaining power and shield it from unilateral actions by Western economic giants.
Recent global events highlight the growing influence of BRICS nations. For instance, despite Western sanctions during the Russia-Ukraine war, countries like Germany and Italy had no choice but to pay for Russian gas in rubles. Nigeria could learn from such realignments in geopolitical power dynamics and take calculated steps toward economic self-determination.
Strengthening the Naira: The Law of Demand in Action
Fundamentally, increasing global demand for the naira will strengthen it. According to basic economic principles, when demand for a currency rises, so does its value. If foreign oil buyers must purchase naira before acquiring Nigerian crude, they create an automatic demand for the currency. This, in turn, will increase its exchange rate value, reduce inflationary pressure, and enhance purchasing power for Nigerian citizens.
Moreover, strengthening the naira reduces Nigeria’s reliance on foreign exchange to import goods, which remains one of the biggest drains on national reserves. With a stronger currency, the cost of importing machinery, medical equipment, and essential goods will drop, benefiting both businesses and ordinary citizens.
Reviving Local Manufacturing: A Complementary Step
Yet currency reform alone is not enough. For these gains to endure, Nigeria must boost local production. If the Ministry of Industry, Trade and Investment collaborates with leading corporate players and economic scholars, a new industrial blueprint could breathe life into the country’s dormant factories. More local manufacturing means fewer imports, less need for dollars, and reduced inflation.
Revitalizing manufacturing will also expand the tax base, enabling the government to earn more internally generated revenue. This, in turn, will reduce the need for foreign loans and petroleum-backed budgets, liberating Nigeria from the fiscal straitjacket imposed by oil price fluctuations and external debt obligations.
Breaking the Mold: Rethinking Global Financial Norms
The existing global financial architecture was not built to benefit countries like Nigeria. The United Nations, World Bank, and International Monetary Fund operate within frameworks shaped by colonial-era economic assumptions. These institutions rarely prioritize the interests of nations they once colonized or economically exploited.
Therefore, Nigeria must not treat these structures as immutable. They are political constructs subject to disruption. As seen with China and the U.S. during their trade war—where retaliatory tariffs eventually gave way to negotiation—economic power always commands respect. Nigeria, by asserting its sovereignty, could eventually gain the kind of leverage needed to renegotiate its place in global economics.
A Call for Political Courage
What remains is the political will to push this bold economic agenda to its logical conclusion. Tinubu has taken the first step by introducing naira-based domestic oil sales. He must now double down and extend the same requirement to international buyers. This is not merely about economics—it is about asserting Nigeria’s place in the global order.
Just as the U.S. and China found mutual respect after their tariff skirmishes, Nigeria could emerge from international pushback with newfound clout, provided it plays its cards wisely. The time for timidity is over. Economic disruption is the new global language, and those who dare, win.
Conclusion: A Strategy Worth Pursuing
If diligently pursued, the naira-for-petroleum policy could lead to a steady inflow of convertible currencies, a stronger naira, revitalized local industries, reduced external debts, and greater availability of affordable consumer goods. While elite economic thinkers rooted in Western paradigms may push back, Nigeria must chart its own course.
This isn’t about rejecting global cooperation—it’s about demanding fair terms of engagement. By insisting on a future where Nigerian oil strengthens the naira, rather than just the dollar, President Tinubu has begun writing a new chapter in the nation’s economic history. The road ahead will not be easy, but the reward—a truly sovereign and robust Nigerian economy—is worth the risk.
