Anayo Nwosu: Insights from a Seasoned Banker on Forex Strategy

Anayo Nwosu: Insights from a Seasoned Banker on Forex Strategy

 

With the recent shifts in Nigeria’s foreign exchange landscape, Anayo Nwosu, a seasoned banker, has shared valuable insights on the evolving forex market, advising businesses and individuals on strategic financial positioning.

“The commencement of local petroleum product supply by the Dangote Refinery will significantly reduce the pressure on the demand for dollars in Nigeria. For a long time, Nigeria has spent heavily on importing petroleum products, which fueled the demand for foreign currency. Now, with local production, that demand will drop,” Nwosu noted.

Nwosu also highlighted the broader impact of Dangote’s operations on Nigeria’s foreign exchange inflows. “Dangote will not only meet local demand but also generate foreign exchange through exports to sub-Saharan Africa. This is a game-changer. The refinery’s reach covers West, Central, and Southern Africa, and it will control the sale of aviation fuel across the continent. It’s no surprise that 16 European refineries are considering shutting down due to this competitive threat.”

Despite these benefits, Nwosu cautioned about potential challenges. “If the Federal Government prioritizes selling crude oil to meet Dangote’s needs, Nigeria’s FX earnings from crude oil will decline, which may reduce the FX available to the Central Bank of Nigeria for official sales to banks. This could impact importers and businesses that rely on FX for Letters of Credit and other transactions.”

However, Nwosu pointed out a crucial trend that savvy business owners should note. “The naira has already appreciated between N150 and N200 in just a week. This indicates that the exchange rate for the dollar to naira has started falling. Smart businesses should take advantage of this and hold their funds in naira, not dollars, as the market adjusts.”

His overall advice is strategic but simple: “Importers and distributors of foreign products must read the economic weather well. The forex landscape is changing rapidly, and those who act now will be better positioned for future gains.”

Anthony Emeka Nwosu

Dangote Refinery’s Clear Petrol Raises Eyebrows Amid Energy Crisis Relief

Dangote Refinery’s Clear Petrol Raises Eyebrows Amid Energy Crisis Relief

 

As Nigeria continues to face a prolonged fuel and energy crisis, the newly operational Dangote Refinery has begun supplying petrol to the domestic market, offering some relief to Nigerians. However, the introduction of a new type of Premium Motor Spirit (PMS) has sparked curiosity and concern among consumers. The PMS, which appears clear like water, is different from the red, green, or golden-coloured petrol Nigerians are used to seeing.

Addressing public concerns, Dangote Petroleum Refinery assured Nigerians that the new clear petrol is of the highest quality. Rolled out into the market on Tuesday, September 3, the new fuel’s distinguishing feature is its clarity, which is attributed to the use of ethanol as a refining additive.

Understanding Ethanol’s Role in Fuel

Ethanol, a renewable fuel additive, is known to offer several advantages for fuel economy and engine performance. Vehicles optimized for higher ethanol blends tend to achieve better fuel efficiency due to increased engine efficiency. Furthermore, ethanol boasts a higher octane rating than traditional gasoline, which translates to improved power and performance.

The clear appearance of Dangote’s PMS contrasts with the coloured petrol previously available in Nigeria. Typically, petrol appears red when octane is added, green when octane levels are higher, and yellow when it is unleaded. In the case of Dangote’s new fuel, the clear, water-like appearance indicates the use of ethanol. This additive not only enhances engine performance but also reduces carbon emissions. Its oxygen-rich composition reduces engine carbonation, subsequently lowering carbon dioxide emissions, making it an environmentally friendly choice.

Relief Amid Crisis

The release of this high-grade, clear PMS by Dangote Refinery comes at a crucial time as Nigerians struggle with energy shortages. The refinery’s commitment to providing cleaner, more efficient fuel is seen as a positive step towards addressing the country’s energy challenges.

While some Nigerians may be adjusting to the new look of their petrol, Dangote Petroleum Refinery’s move highlights an innovative approach in refining processes that could lead to broader acceptance of ethanol-blended fuels. This transition marks a significant development in Nigeria’s energy landscape, offering both environmental and performance benefits.

As the fuel continues to circulate in the domestic market, all eyes are on how Nigerians will respond to this new product and its potential to ease the country’s fuel woes.

Reported by Anthony Emeka Nwosu