Crude Oil Sales: Emefiele Goofed Again

By Kelvin Adegbenga

Recently, I saw a tweet on the verified CBN Twitter handle @cenbank dated Nov 25, 2022, which read thus “The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollars today,” and credited to the CBN Governor, Godwin Emefiele.

Despite the claim by the Central Bank of Nigeria Governor, Emefiele, that the official foreign exchange receipt from crude oil sales into the country’s official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollars today, my investigation shows that the Nigeria National Petroleum Company Limited remitted a whopping sum of $2.7bn into its account with the Central Bank of Nigeria during the first six months of 2022.

The inflow into the NNPC Limited’s account with the Central Bank of Nigeria was made between January and June 2022.

Recalled that earlier in the year, the same CBN in a report titled: “The forex question in Nigeria: Fact sheet”, accused the NNPC Ltd of being behind the Naira crisis in Nigeria.

Specifically, the report stated that “domestically, there has been zero-dollar remittance to the country’s foreign reserve by the NNPC.”

I still wonder what the CBN Governor want to gain by misleading the public against the NNPC Limited because investigations showed that out of the $2.7bn remittance into the NNPC account with the CBN, the sum of $645m was for dividend paid by the Nigerian Liquefied Natural Gas Company Ltd, while $1.786bn was remitted from the operational activities of the NNPC Ltd.

Further examination showed that the sum of $18,770,418.97 was remitted into the NNPC account with CBN in January, while February and March had inflows of $194,563,276.49 and $373,232,875.20 respectively.

In April, the inflow into the NNPC’s account with the CBN was $247,884,295.52, and in May $591,565,425. 41 and June $880,906,761.81

This is the second time the CBN governor is blaming the declining value of the currency on NNPC Limited.

In 2018, the CBN Governor said that the huge appetite of Nigerians for importation was responsible for the declining value of the Naira. He thereafter placed a ban on Forex accessibility for the importation of 41 items.

In July 2021, Emefiele also hit at Bureau De Change (BDC) operators accusing them that their illegal forex trading was hurting the Naira.

In September 2021, Emefiele blamed Aboki FX for the naira depreciation the country had suffered then and threatened to arrest the brain behind the forex intelligence firm.

Early this year, the CBN governor again blamed the Naira depreciation on activities of those involved in money laundering, financing of terrorism as well as politicians.

There is no doubt the poor economic management policies of the Central Bank of Nigeria under the leadership of Godwin Emefiele were responsible for the recent free-fall of the naira.

We all that that the inability of CBN to promptly release Joint Venture (JV) cash-call funding from the Treasury Single Account (TSA) even when the NNPC had adequate cash cover, had led to the loss of JV Partners ’  confidence to restore production and reap the benefits of today’s improved oil prices.

Since his interest to contest as the President of Nigeria which failed woefully, Godwin Emefiele has completely failed to concentrate on his core mandate of price stability as a CBN Governor.

The action of Godwin Emefiele negates President Muhammadu Buhari’s objective to take 100 million people out of poverty.

The combined impact of CBN’s inability to promptly release the JV cash call to restore production, the increasing losses due to crude oil theft, and production deferments has culminated in significant crude oil output losses of over 600, 000 barrels per day.

At the current year-to-date average crude oil price of $107 per barrel, Nigeria is counting opportunity losses translating to over $64m per day, and a monumental impact of about $2bn per month.

To its credit, NNPC Limited has recorded significant gains on production ramp-up including attaining ‘the first oil production from the Anyala – Madu Fields and most recently the oil drilling in Gombe, Bauchi with 1b barrels oil, 500bscf gas projection.

It is high time President Buhari sacked Godwin Emefiele for non-performance and poor economic policies which have pushed millions of Nigerians into abject poverty and may affect the chances of the ruling party in 2023 general elections.


Kelvin Adegbenga writes from Abuja and can be reached via @kelvinadegbenga