President Bola Tinubu has announced a reorganization in the oil sector to address concerns about declining oil revenue and lack of transparency within the NNPC.
The President has instructed the Central Bank of Nigeria (CBN) to take over the responsibility of crude oil sales from the Nigerian National Petroleum Company Limited (NNPCL).
Previously, the NNPC had complete control over crude oil sales and only reported its accounts to the federal government.
Critics have argued that this setup lacked transparency and allowed the NNPC to underreport its earnings.
Under the new directive, the NNPC will be required to submit all receipts from crude oil sales to the CBN for verification and documentation.
This measure aims to eliminate any potential gaps in reporting and ensure accurate records of oil revenue.
The goal of the partnership between the Ministry of Finance and the NNPCL, according to CBN Governor Mr. Olayemi Cardoso, is to guarantee that all foreign inflows are remitted to the Central Bank.
“This coordinated effort will greatly enhance the Bank’s foreign exchange flows and contribute to the accretion of reserves,” he said.
At the introduction of the Nigerian Economic Summit Group’s (NESG) “2024 Macroeconomic Outlook Report,” Cardoso gave the keynote address.
“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN.
“This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.
“The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.”
“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.
“Upholding the integrity of financial markets is crucial for building confidence. With the completion of an independent forensic review, we are addressing the backlog of valid FX transactions, and we remain steadfast in our commitment to decisively address any infractions and abuses,” he added.
