Cape Town, South Africa: Insecurity, currency fluctuation, and logistic challenges are limiting the expansion of the Nigerian lubricant market into the West African sub-region, said stakeholders of the Nigerian lubricant at the 10th ICIS African Base Oils and Lubricant Conference in Cape Town, South Africa.

“There is a lot of growth in West Africa,” said Tolulope Alabi, head of business development and supply at OVH, Nigeria, during a fireside chat at the 10th ICIS African Base Oils and Lubricant Conference in Cape Town, South Africa. Tolulope explained that the demand in the West African sub-region is driven by Nigeria. However, she noted that the expansion of the Nigerian lubricant market to other countries in the subregion has been hampered by headwinds such as insecurity, currency fluctuation, and logistic challenges. Tolulope explained that currency instability has created an unstable exchange rate “that you don’t know the rate at which your cargo will land and the rate at which you will sell it on the local market.” She emphasised that the West African lubricant market depends on Nigeria and, to some extent, Ghana for lubricant supplies. However, she added that “to export from Nigeria to West African countries is problematic.” For his part, Dr. John Erinne, CEO of Matrix Petrochem Limited, Lagos, Nigeria, said that the currency instability reached its peak during the first and second quarters of the year 2024. “Prices of base oils were changing virtually every week in the first and second quarters of this year (2024),” Erinne disclosed. Erinne explained that currency fluctuation in the local lubricant market was influenced by the decision of the Nigerian government to solve an age-old problem of reducing the big gap between the parallel (unofficial) and official exchange rates in the country. However, he added that despite the headwinds in the local lubricant market, “the Nigerian lubricant market has continued to grow at 45% per annum, and there are about 60 functional blending plants in the country.” Similarly, Clinton Anyiam, CEO of Afribase Group in Abuja, Nigeria, cautions that the Nigerian government also “needs to be intentional in several areas to reduce importation and pressure on the local currency.” He advocates for innovation, policy change, and legislation to circumvent the headwinds in the Nigerian lubricant market: “We need to create technology to help vessels to discharge at the point instead of queuing for two weeks before cargo is discharged to owners.”

However, Tolulope added that ongoing infrastructural projects in the subregion could engender trade in lubricant within the subregion. “There are several road projects that have been commissioned; there are connections between Ghana, Lome, and Benin, so it’s just about interconnecting. There is also a railway project linking these countries. When these projects come into play, it will ease the movement of products in the subregion,” she added.