NIGERIA’S reliance on petroleum importation from Malta and several other European countries is a major cause for Nigeria’s weaker currency which has seen the naira continuously perform badly against other foreign currencies due to the search for dollars for fuel imports.

To meet the demands of over 200 million of its population, Nigeria relies largely on Belgium, Netherlands, Singapore, and Malta for its fuel import despite being the leading oil-producing nation in Africa, according to Statista.

This development, analysts said, has been a major reason the value of the naira is depreciating against the dollar.

“If the Dangote Refinery starts to work, it means there will be no business or Malta. Malta is the reason why your naira is weak,” a development economist, Kalu Aja, said in his official X account while reacting to the problems with fuel import.

Findings have shown that petroleum importation has been a major foreign exchange transaction in Nigeria and is denying the availability of foreign exchange for importers.

“This government has not shown it will be accountable and transparent. Since the face-off between Dangote and the regulators, have you heard any official response from the Presidency or even the Federal Ministry of Petroleum? What does that tell you? They know that the importation is draining the foreign exchange for the manufacturers and weakening the naira, yet, they are not speaking up,” an economist and consultant to the British Department for International Development (DFID), Celestine Okeke, told The ICIR

To worsen this challenge, a recent statement by the chairman of Dangote Industries Limited, Aliko Dangote, that some officials of the Nigerian National Petroleum Company Limited (NNPCL), oil traders, and terminals opened a blending plant in Malta, had sparked controversy.

Dangote had said, “Some of the terminals, some of the NNPC people, and some traders have opened a blending plant somewhere off Malta. We all know these areas. We know what they are doing.”

A reaction from the group chief executive officer of NNPCL, Mele Kyari, faulted the allegations, saying he did not own a blending plant in Malta.

An oil blending plant is a facility that has no refining capability but is either capable of producing finished motor gasoline through mechanical blending or blending oxygenates with motor gasoline.

Recent developments show that the African richest man has been speaking up following the seeming frustration faced in bringing his 650,000 oil refinery to operate at maximum capacity.

The management of the Dangote Group, NNPCL, and the regulators in the Nigerian oil industry have been at loggerheads over the supply of crude products and the monopoly of the market.

While Dangote Group accused the regulators of frustrating its effort to get crude oil to start petroleum products production, the regulators said the refinery  churn out inferior petroleum products.

Following the Malta imports allegation, social media became agog with information that Nigeria saw substantial growth in its fuel imports from Malta, totaling $2.25 billion over the past nine years, signifying the robust trade relations between Nigeria and Malta.

In the report credited to Trade Map, an online database, Nigeria’s imports of petroleum oils obtained from bituminous minerals saw a remarkable increase, reaching $2.8 billion in 2023, representing a 342 per cent rise from $47.5 million in 2013.

However, an accurate percentage calculation will arrive at 5,794.74 per cent and not 342 per cent.

The report said that the annual import values were $59.98 million in 2014, $117.01 million in 2015, and $13.32 million in 2016,  stating that this upward trend in trade underscored the growing demand for fuel and the effective trade channels established between the two countries.

Again, this could not indicate an upward movement in import values between 2014 to 2016 but rather a fluctuation in trade activities.

It added that Nigeria importing $2.08 billion worth of fuel in 2023 showed trade relations with Malta have proven to be beneficial. However, the figure contradicts the $2.8 billion earlier stated as the total petroleum import from Malta in 2023.

A check at the Trade Map data indicates that Nigeria’s imports stood at $2,082,893 in 2023 for petroleum oils and oils obtained from bituminous minerals excluding crude from Malta in 2023.

The Trade Map data credited this figure to data from the Nigerian National Bureau of Statistics (NBS).

What the NBS report shows

In 2023, Nigeria’s annual total trade stood at N71.88 trillion of which imports amounted to N35.92 trillion and exports N35.96 trillion, representing a trade surplus of N400 billion, according to the NBS’ Foreign Trade in Goods Statistic (Q4 2023).

Of the N35.92 trillion total imports, mineral products (where refined petroleum products are included) amounted to N12.19 trillion, representing 33.94 per cent of the total imports.

According to NBS, Malta falls within the top ten import destination countries, falling in the eighth position below Singapore, China, Belgium, India, and the United States in the top five positions.

It further revealed that Malta’s share of Nigeria’s total imports was at 2.07 per cent with total imports at N291.979 billion Q4 2023.

In the third quarter of 2023, Malta was in the fourth position with a 6.64 per cent share or N561.37 billion share of Nigeria’s imports, coming below China, Belgium, and India. In the second quarter, Malta imported products worth N181.55 billion, representing a 3.17 per cent share of its total imports to Nigeria and falling in the sixth position.

In the first quarter of 2023, the NBS did not report Malta as among the import destinations for Nigeria.

It then shows that imports from Malta stood at N1.034 trillion in 2023 according to NBS’ disclosure. While the NBS did not state the exchange rate at which it converted the dollar to the naira, however, an annual average rate conversion shows the naira to dollar rate stood at N638.7 in 2023.

Additional data may be required from the Nigerian Customs Service, NNPCL, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Central Bank of Nigeria (CBN), Nigerian Ports Authority (NPA), and various authorities in the oil sector to nip in the bud what Nigeria imports from Malta and the individuals or companies behind the importation.

Imports strain foreign reserves

Vice-President Kashim Shettima revealed recently that Nigeria spends $25 billion per annum on the importation of petroleum products.

Nigeria has been a long-time importer of petroleum products as its four refineries have been comatose over the decades, putting a strain on its foreign reserves.

According to CBN’s outlook, foreign reserves, which stood at $33.09 billion in 2023 are expected to dip in 2024 on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service.