By Dangote Oil Refinery will raise Nigeria’s Gross Domestic Product to $322bn by 2025, according to a new report.
The report, titled Impact of Dangote Refinery on the Nigerian Economy and released by Data Services & Resources Ltd, shows that without the refinery, Nigeria’s GDP growth would likely reach 3.34% in 2024 and increase to 4.13% by 2030.
The report noted that with the refinery in operation, GDP growth is projected to rise to 4.15% in 2024 and reach 6.21% by 2030.
The report further shows that Nigeria’s GDP, at current market prices, would increase from N234.43 trillion in 2023 to N304.8 trillion in 2024, with continued growth to N364.94 trillion in 2025. By 2026, GDP is projected to reach N432.24 trillion and could climb as high as N806.91 trillion by 2030.
The Managing Director at Data Services & Resources Ltd, Afolabi Olowookere, said the refinery’s impact was expected to boost GDP to $370.49bn in 2026, $374.69bn in 2027, and continue rising to $412.91bn in 2028 and $446.98bn in 2029.
The report added that the Dangote Refinery, which began initial production in January 2024, is expected to positively and hugely impact the economy.
One of the storage tanks at the Dangote refinery (photo taken June 2021/NN)
The report stated that the refinery’s processing capacity is projected to reach 650,000 barrels per day by the first quarter of 2025, producing 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of aviation fuel annually.
It also highlighted the contribution of the refinery to fiscal sustainability, stating that it would create thousands of direct and indirect jobs. The report added that the refinery would reduce Nigeria’s dependence on imported petroleum products, improve the country’s trade balance by increasing exports of refined products, and significantly strengthen Nigeria’s fiscal position by reducing fuel subsidies and generating substantial tax revenues. These revenues are expected to support infrastructure and social development projects.
It maintained that the Nigerian government, through the Nigerian National Petroleum Company, initially held a 20 per cent stake in the refinery, but that had been reduced to 7.2 per cent.
The refinery’s operation is also expected to stimulate growth in the upstream, midstream, and downstream sectors, boosting investments in oil refining, chemical and pharmaceutical products, plastic and rubber production, as well as cement manufacturing.
The Chairman of the Dangote Group, Aliko Dangote.
Meanwhile, the Federal Government commenced the sale of crude oil to Dangote Refinery and other local refineries in naira on October 1.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this in a statement on Saturday.
He stated in a post on the official X account of the ministry that the government had started the sales of crude to local refineries in naira on October 1.
“The Hon. Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council directive, the sale of crude oil and refined petroleum products in naira has officially commenced as of October 1, 2024.
Minister of State Petroleum Resources (Oil), Sen. Heineken Lokpobiri.
“Following a meeting of the Implementation Committee, chaired by the Honorable Minister of Finance and Coordinating Minister of the Economy on October 3, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, key stakeholders affirmed the start of this strategic initiative,” the statement said.
Edun also confirmed that the stakeholder meeting was attended by the Minister of State for Petroleum (Oil), Heineken Lokpobiri; Vice President of the Dangote Group, Edwin Devakumar; and Group Managing Director of the Nigerian National Petroleum Company (NNPC), Mele Kyari, among others.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
