Dangote refinery may raise Nigeria’s GDP to $322bn — Report

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’, which was released recently by Data Services & Resources Ltd, indicated that without the refinery, Nigeria’s GDP was expected to grow by 3.34 per cent in 2024, increasing to 4.13 per cent by 2030.

It noted that with the refinery in operation, GDP growth was projected to rise to 4.15 per cent in 2024 and reach 6.21 per cent by 2030.

The report also stated that Nigeria’s GDP at current market prices would increase from N234.43tn in 2023 to N304.8tn in 2024, with further growth to N364.94tn in 2025.
It added that by 2026, GDP was projected to hit N432.24tn, climbing to N806.91tn by 2030.

The Managing Director at Data Services & Resources Ltd, Afolabi Olowookere,  stated that 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, was expected to positively and hugely impact the economy.
It stated that the refinery’s processing capacity would hit 650,000 barrels per day by the first quarter of 2025, producing 10.4 million tonnes of gasoline, 4.6Mt of diesel, and 4Mt of aviation fuel annually.

The report also highlighted the contribution of the refinery to fiscal sustainability, stating that it would create thousands of direct and indirect jobs.

It added that it would reduce Nigeria’s reliance on imported petroleum products, and improve the country’s trade balance by increasing exports of refined products.
The report noted that by reducing fuel subsidies and generating substantial tax revenues, the Dangote Refinery was set to strengthen Nigeria’s fiscal position and provide much-needed resources for 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.

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.

“Following a meeting of the Implementation Committee, chaired by the Hon. Minister of Finance and Coordinating Minister of the Economy on October 3rd, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders,” the statement read.

Edun also confirmed that the stakeholder meeting was attended by the Minister of State, Petroleum (Oil), Heineken Lokpobiri; the Vice President of Dangote Group, Edwin Devakumar; and Group Managing Director of the Nigerian National Petroleum Company, Mele Kyari, among others.