Ghana is asking for a shared currency among West African countries to make it easier to buy fuel from the Dangote Petroleum Refinery and to help with other business deals.
Mustapha Abdul-Hamid, the Chairman of the National Petroleum Authority in Ghana, spoke at the OTL Africa Downstream Energy Week, organized in Lagos. He pointed out that relying too much on the dollar is hurting local currencies and making them lose value.
Abdulhamid explained that Ghana needs dollars to buy fuel from the Dangote refinery, and Nigeria will also need dollars if it wants to buy from Ghana.
He talked about how countries in the petroleum industry need to work together. Even if they have different political views, they should try to agree on a plan that helps everyone trade with each other.
“Fortunately for us, the entire continent now has an Africa Continental Free Trade Agreement that allows us to collaborate among ourselves in terms of trading, not just in petroleum products but in all other products. However, if Ghana is going to import petroleum products from Dangote Refinery, for example, we would still have to pay Dangote refinery in dollars”, he said.
He also added that if Nigeria runs low on fuel, it might have to buy from Ghana, but they would still need dollars to do that. He believes it doesn’t make much sense.
“It is our demand for dollars to import petroleum products that puts pressure on our various currencies and also drives petroleum product prices upwards. Now that Nigeria has a deregulated petroleum regime, for example, the major factor that is going to be responsible for driving up petroleum prices in Nigeria will be the currency, because importers would need more dollars to import petroleum products”, Abdulhamid said.
He said Ghana would require $400m monthly to import petroleum products, adding that “now I can imagine how much Nigeria will need for the importation of its petroleum products. Where are the Nigerian petroleum importers going to find the dollars? You will only put too much pressure on your currency.”
He called for countries to work together, not just in the petroleum sector but also at the government level to improve fuel systems and economic policies.
He said Ghana would like to buy fuel from the Dangote Refinery once it reaches a capacity of 650,000 barrels per day because Nigeria wouldn’t use it all. He believes this is better than getting fuel from faraway places like Rotterdam in Holland.
Abdulhamid also mentioned that Ghana is taking steps to stop fuel smuggling from Nigeria and suggested that the Nigerian Midstream and Downstream Petroleum Regulatory Authority should create a security team for this purpose.
Aliko Dangote, the President of the Dangote Refinery, encouraged local sellers to buy petrol from him instead of importing it. He said they have about 500 million liters available, while others are looking for fuel elsewhere.
