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- Nigeria’s economic crossroads: Pipeline sabotage, Dangote refinery halt, Shell’s exit & Nollywood’s rise
Nigeria’s economic crossroads: Pipeline sabotage, Dangote refinery halt, Shell’s exit & Nollywood’s rise
Explore Nigeria’s oil sector challenges, including Dangote Refinery's naira sales suspension and pipeline sabotage, alongside Nollywood’s journey to global prominence.
Samuel Okocha
March 24, 2025
Welcome to this week’s 234Digest: Monday Edition—a concise roundup of key developments shaping Nigeria’s economy, business environment and cultural landscape. Published twice weekly on Wednesdays and Sundays (with a slight reschedule this week), the aim is to bring you the stories driving change in Africa’s most populous nation.
In today’s edition, we explore the temporary suspension of naira-denominated fuel sales by Dangote Refinery, the escalating security challenges in Rivers State, including multiple pipeline explosions that threaten oil and gas operations, and Shell’s landmark divestment from its onshore Nigerian assets.
Additionally, our Catch Up segment highlights Nollywood’s rise to global prominence as a cultural and economic powerhouse. Finally, Our Photo of the Day captures the entrepreneurial spirit of a young man hawking perfumes at a bustling car park in Abuja, showcasing the resilience that defines Nigeria’s informal economy.
It’s been a packed day and the clock is approaching 8:30pm as I hit send on this newsletter. Let’s dive in.
—Samuel Okocha, Curator & Editor, 234Digest
Word for word
“The global oil market is unforgiving. Investors do not wait for internal political conflicts to be resolved—they simply take their capital elsewhere.”
Today’s briefs
Pipeline explosions threaten Nigeria’s oil recovery
Nigeria's oil-rich Rivers State is reeling from its third pipeline fire in a week, sparking grave concerns over infrastructure security in Africa's largest oil producer. The latest blaze occurred at the Soku-Abua-Rumuji gas pipeline, operated by Nigeria Liquefied Natural Gas (NLNG), with Witness Alasia, general secretary of Soku Kingdom, confirming the fire outbreak but disputing reports of an explosion.
The incident is the latest in a series of attacks on oil pipelines in Rivers State, which is at the heart of Nigeria's once restive Niger Delta region—a hotbed of militant activity and oil related violence in the past. Last week, President Bola Tinubu declared a six-month state of emergency after repeated attacks on oil pipelines, including the Trans-Niger Pipeline (TNP), which handles 15% of Nigeria’s crude exports. Tinubu suspended the governor, the deputy governor and the legislative arm of government. He appointed Vice Admiral Ibokette Ibas, a retired Navy chief, as Sole Administrator to restore stability.
The sabotage raises concerns over Nigeria's ability to sustain its recent oil output recovery, with Renaissance Africa Energy, which acquired Shell's onshore assets, including the Trans-Niger Pipeline (TNP), facing pressure to secure infrastructure and maintain Bonny Light exports. Analysts warn that further disruptions could erode investor confidence and reverse recent production gains that saw Nigeria exceed OPEC quotas in January.
Shell completes $1.3 billion divestment of onshore assets
Shell Plc has has completed the $1.3 billion sale of its Nigerian onshore oil assets to Renaissance Africa Energy, marking the company’s exit from the Niger Delta region after decades of operations plagued by environmental challenges and community disputes.
The transaction includes 18 oil mining leases, comprising 15 onshore and three shallow-water assets, which produced around 114,000 barrels of oil equivalent per day in 2022. Shell will focus on its deepwater projects in Nigeria, including the Bonga North and LNG expansion, while Renaissance takes on the challenge of managing the onshore assets sustainably amid rising security concerns.
The deal underscores a broader trend among international oil majors, which are increasingly pivoting to offshore projects while empowering indigenous operators to take charge of onshore resources.
Dangote Refinery suspends naira sales amid FX mismatch
Dangote Petroleum Refinery has announced a temporary halt in the sale of petroleum products in naira due to a mismatch between its naira sales proceeds and dollar-denominated crude purchase obligations.
The refinery, owned by billionaire Aliko Dangote, said it had sold more naira-denominated petroleum products than it had received in naira-priced crude oil from the Nigerian National Petroleum Company Limited (NNPCL). The suspension comes as NNPCL and Dangote negotiate a renewal of their six-month naira-for-crude agreement, which expires this month.
Since October 2024, NNPCL has supplied over 48 million barrels of crude under the arrangement, but forward sales of crude by NNPCL have constrained domestic allocations.
Industry experts warn that the halt may increase pressure on the foreign exchange market as fuel marketers seek dollars to purchase petroleum products. The refinery assured customers that it would resume naira sales once it receives additional naira-denominated crude cargoes.
Catch up: Nollywood’s rise to global prominence
Nollywood, Nigeria's dynamic film industry, has transformed from modest origins into a worldwide cultural force. In a captivating piece from the Financial Times, Wilfred Okiche explores this industry's remarkable evolution, tracing its journey from unexpected beginnings to its present role as a cultural and economic giant.
From VHS to global screens
Nollywood’s modern era began in 1992 with Living in Bondage, a low-budget thriller produced on VHS by Kenneth Nnebue. Originally created as a way to sell surplus video cassettes, the film’s massive success ignited a revolution in Nigerian storytelling. Over time, Nollywood transitioned from its VHS roots to cinema and streaming platforms, with films like Genevieve Nnaji’s Lionheart gaining international acclaim on Netflix.
Cultural and economic impact
Nollywood has evolved into a cultural powerhouse, extending its influence beyond entertainment to preserve indigenous languages and traditions, while tackling pressing social issues. The sector’s clout is equally impressive. In 2021, Nollywood contributed 2.3% to Nigeria’s GDP, highlighting the rapid expansion of the country's media and entertainment sector as a leading force in the global creative industry, according to PwC Global Entertainment and Media Outlook for 2022-2026. The rise of streaming giants like Netflix, Amazon, and YouTube, has further amplified Nollywood's global reach, providing Nigerian filmmakers with a platform to showcase their work to international audiences and cementing the industry’s status as a cultural ambassador for Nigeria.
Challenges and opportunities
Despite its success, Nollywood faces hurdles such as piracy, limited funding, and inefficient distribution networks. However, its ability to balance local storytelling with global appeal positions it as a cornerstone of African cinema.
For an in-depth look at Nollywood’s journey—from its accidental beginnings to its current global influence—read the full article on the Financial Times:
Photo of the day
Busy Scenes at Abuja's Car Parks: In the lively car parks of Abuja, a young entrepreneur is hard at work, selling perfumes to travelers waiting for their rides. You can see two hands reaching into the front seat of a commercial vehicle—one offering a medium-sized perfume bottle, while the other showcases four smaller oil perfume bottles. This genuine moment captures his interaction with a potential customer, shining a light on the determination and entrepreneurial spirit that are the heart of Nigeria's informal economy. Photo by Samuel Okocha/234Digest
Data snapshot
Dangote Refinery Crude Supply: 48 million barrels since October; naira-for-crude deal under negotiation.
Pipeline Sabotage Impact: TNP handles 15% of exports; crude rerouted via alternative line.
Shell Divestment: $1.3 billion sale; Renaissance takes over SPDC assets.
Nollywood’s Contribution: 2.3% to GDP ( 2021). Source: PwC.
That's a wrap for now. We'll be back with the next update on Wednesday. In the meantime, have a fantastic week ahead.
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