A recent report has revealed that the Dangote Oil Refinery is set to significantly impact Nigeria’s economy, raising the country’s Gross Domestic Product (GDP) to $322 billion by 2025. The report, titled Impact of Dangote Refinery on the Nigerian Economy, was released by Data Services & Resources Ltd and outlines the economic benefits of the refinery, which began operations in January 2024.
According to the report, without the Dangote Refinery, Nigeria’s GDP was expected to grow by 3.34% in 2024, with projections reaching 4.13% by 2030. However, with the refinery fully operational, the GDP growth rate is projected to rise to 4.15% in 2024 and reach 6.21% by 2030.
The report also highlighted that Nigeria’s GDP at current market prices is set to increase from N234.43 trillion in 2023 to N304.8 trillion in 2024, with further growth expected to reach N364.94 trillion by 2025. By 2026, the GDP is projected to hit N432.24 trillion, and by 2030, it could climb to N806.91 trillion.
Afolabi Olowookere, Managing Director at Data Services & Resources Ltd, emphasized the refinery’s potential to strengthen Nigeria’s economy, stating, “The Dangote Refinery’s impact will boost Nigeria’s GDP to $370.49 billion by 2026 and continue rising to $446.98 billion by 2029.”
The report added that the refinery’s capacity to process 650,000 barrels of crude oil per day by early 2025 would result in the production of 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of aviation fuel annually.
Beyond GDP growth, the report outlined other significant benefits the refinery would bring to Nigeria. These include creating thousands of direct and indirect jobs and reducing the country’s dependence on imported petroleum products. This shift is expected to improve Nigeria’s trade balance by boosting exports of refined products.
According to the report, the refinery’s contribution to Nigeria’s fiscal sustainability will be profound. “By reducing fuel subsidies and generating substantial tax revenues, the Dangote Refinery will strengthen the country’s fiscal position and provide much-needed resources for infrastructure and social development projects,” the report stated.
The refinery, which was initially owned 20% by the Nigerian government through the Nigerian National Petroleum Company (NNPC), now has a 7.2% stake held by the government. Its operations are expected to stimulate growth in multiple sectors, including upstream, midstream, and downstream industries. This will lead to increased investments in oil refining, chemical and pharmaceutical products, plastic and rubber production, and cement manufacturing.
Also Read:
- Dangote Refinery Denies NNPCL’s Claim of N898 per Litre Petrol Price, Says Sales Were in Dollars
- Petrol Loading from Dangote Refinery to Begin Next Week, Say Marketers
In addition to these economic benefits, the Federal Government has started selling crude oil to the Dangote Refinery and other local refineries in naira, as part of a strategic initiative to boost local refining capacity. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the sale of crude oil in naira began on October 1, 2024.
“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,” read a statement from the Ministry of Finance.
Edun further confirmed that the decision was reviewed and affirmed by key stakeholders in a post-commencement meeting held on October 3, 2024. The meeting was attended by the Minister of State for Petroleum (Oil), Heineken Lokpobiri; the Vice President of Dangote Group, Edwin Devakumar; and Group Managing Director of the NNPC, Mele Kyari, among others.
With the refinery’s operation and the government’s new policies, Nigeria is poised for substantial economic growth, paving the way for a more self-reliant energy sector and improved fiscal health.