According to a recent report by Data Services & Resources Ltd, the Dangote Oil Refinery is projected to elevate Nigeria’s Gross Domestic Product (GDP) to $322 billion by 2025. The report, titled Impact of Dangote Refinery on the Nigerian Economy, outlines the significant economic benefits expected from the refinery’s operations.
Without the refinery, Nigeria’s GDP is anticipated to grow by 3.34% in 2024, rising to 4.13% by 2030. However, with the refinery in full operation, GDP growth is expected to increase to 4.15% in 2024, ultimately reaching 6.21% by 2030.
The report forecasts that Nigeria’s GDP at current market prices will rise from N234.43 trillion in 2023 to N304.8 trillion in 2024, and further to N364.94 trillion in 2025. By 2026, GDP is projected to hit N432.24 trillion and climb to N806.91 trillion by 2030.
Afolabi Olowookere, Managing Director of Data Services & Resources Ltd, highlighted that the refinery’s impact could boost GDP to $370.49 billion in 2026, $374.69 billion in 2027, and continue increasing to $412.91 billion in 2028 and $446.98 billion in 2029.
The Dangote Refinery, which began initial production in January 2024, is expected to have a processing capacity of 650,000 barrels per day by the first quarter of 2025. This capacity is projected to yield 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of aviation fuel annually.
The report also emphasizes the refinery’s role in enhancing fiscal sustainability, creating thousands of direct and indirect jobs, and reducing Nigeria’s dependence on imported petroleum products. By increasing exports of refined products, the refinery is set to improve the country’s trade balance.
Furthermore, the refinery is expected to bolster Nigeria’s fiscal position by lowering fuel subsidies and generating substantial tax revenues, which could fund critical infrastructure and social development projects.
Initially, the Nigerian National Petroleum Company (NNPC) held a 20% stake in the refinery, but this has since been reduced to 7.2%. The refinery’s operations are anticipated to stimulate growth across the upstream, midstream, and downstream sectors, attracting investments in oil refining, chemicals, pharmaceuticals, plastic and rubber production, and cement manufacturing.
In related news, the Federal Government has begun selling crude oil to Dangote Refinery and other local refineries in naira as of October 1, 2024. Finance Minister Wale Edun announced this initiative, stating that it aligns with a directive from the Federal Executive Council.
Following a meeting of the Implementation Committee on October 3, key stakeholders, including Minister of State for Petroleum Heineken Lokpobiri and representatives from Dangote Group and the NNPC, affirmed the launch of this strategic initiative.
