By Ayomide Otitoju
Dangote Petroleum Refinery & Petrochemicals is playing a key role in Nigeria’s improving economic outlook, following the country’s sovereign credit rating upgrade by S&P Global Ratings.
S&P upgraded Nigeria’s long- and short-term foreign and local currency ratings to “B” from “B-”, citing stronger economic growth, improved external balances, rising oil production, and expanded domestic refining capacity.
The ratings agency specifically highlighted the operational ramp-up of the 650,000 barrels-per-day Dangote Petroleum Refinery & Petrochemicals as a major contributor to Nigeria’s strengthening balance of payments position and economic resilience.
According to the report, the refinery’s full-scale operations are helping to boost Nigeria’s current account surplus, reduce dependence on imported refined petroleum products, and improve foreign exchange liquidity.
S&P noted that significant refining capacity is now online, with the Dangote complex operating at near-maximum capacity, supporting domestic supply of fuel, gas, and fertiliser while cushioning the economy against global supply disruptions.
The agency projected Nigeria’s current account surplus to rise to 5.8% of GDP in 2026 from 4.8% in 2025, supported by increased domestic refining and hydrocarbon exports.
It added that the country’s external position has also benefited from reduced fuel importation, fuel subsidy removal, exchange rate liberalisation, and higher oil production.
Foreign exchange reserves were estimated to have risen from about $33 billion in 2023 to nearly $50 billion by early 2026, partly driven by reduced import demand following the commencement of operations at the refinery.
S&P further noted that Nigeria is gradually transitioning from a crude oil exporter to an emerging exporter of refined petroleum products, with the refinery also supporting broader industrialisation efforts across Africa.
The report revealed that plans are underway by Dangote Petroleum Refinery & Petrochemicals to explore expansion to 1.4 million barrels per day, which could further strengthen Nigeria’s balance of payments position in the coming years.
While acknowledging global oil price volatility, S&P said increased domestic refining capacity provides Nigeria with greater energy security and reduced exposure to external shocks.
The agency also linked Nigeria’s improved macroeconomic outlook to ongoing reforms since 2023, including fiscal adjustments, exchange rate liberalisation, and efforts to boost oil production in the Niger Delta.
Despite persistent challenges such as inflation, a narrow tax base, and low formal employment, S&P maintained a stable outlook for Nigeria, citing a balance between reform-driven gains and structural constraints.
