The only thing not rising

Let's start with our first story where we're having a conversation about Nigerians' crude oil production.

For months now, I think like this year, we've had the blockage of the Strait of Hormuz.

So we've had petrol prices go up.

We've also had, I mean, Nigeria has also had the Dangote Refinery come into play.

We've seen how it has helped for prices.

I mean, in the ups and downs we've seen with petroleum, especially with the blockage of the Strait of Hormuz this year.

But now we're seeing a kind of recovery in Nigeria has reached a six-time high.

But we've also seen the Dangote Refinery now moving to use US dollars for its bulk buyers.

I mean, I just wanted to give our listeners kind of like a background to the story of how we are increasing or seeing a rise in Nigeria exceeding the OPEC quota, as well as what do you think this impact of Dangote now selling in dollars is? Does it have any impact on the Nigerian economy? Will it be better for us or do you think it's better for the Dangote Refinery and not for the Nigerian people? Okay.

Well, to give a little bit of a summary to that, We'll come back to that.

First of all, I think Nigeria exceeding its OPEC quota is a very positive one.

Because the reason why Nigeria hasn't been able to reach this quota for the past, I think, six years now is because of issues like thefts.

pipeline vandalism and all of that but I think over the past couple of years the ministry involved has worked on that and there has probably been and there has obviously been an improvement in that because before now the quota has our oil production has fallen below I think 1.2 million barrels per day but as of now it's at 1.7 so that's about 500,000 barrels per day difference, which is a great one.

It's really good because as we have reached and exceeded our quota, more oil production obviously means more FX returns for us, which is a good one.

But now looking onto the Dangote front, I think it is important to understand that Dangote is not necessarily going to transact in dollars per se.

That's not what it is.

That's not what he's saying.

He's just saying he's going to price in dollars.

And to an extent, I kind of understand why he's doing this because even the NNPC himself,

and Dangote said it's crude to him in dollars.

So it's basically like the NNPC is trying to hedge their own foreign exchange risk.

They're trying to take advantage of Nigeria's exchange advantages while putting the risk to Dangote.

So Dangote is saying, okay, if you, the government, are doing this, why would I, the businessman, want to be the one to take the fall if anything happens with, you know, Nigeria's exchange of long trades? Over the past couple of years, I think, it has been pretty stable.

But if something happens that it becomes not so stable, it may not be that much advantageous for Dangote as, at the end of the day, it's a business trying to also edge his own risk by saying, okay, since I'm getting most of my inputs in dollars, why do I want to price in Naira? Because let's even go back and realize that even when he was pricing in Naira, it was still basically converted from dollars.

Because every other thing, everything that goes into that Naira price is in dollars.