Dangote refinery will grow Nigerian GDP by over $400bn by 2030 – Report

The multi-billion dollar Dangote refinery is expected to push the Nigerian economy to $484.15 billion in the next six years if left to function optimally, a new report by Analysts Data Services and Resources (ADSR) Limited has shown.

This is even as the 650 thousand barrels per day facility is estimated to grow Nigeria’s tepid gross domestic product (GDP) from 4.15 percent by the end of 2024 to 6.21 percent by 2030.

“Without Dangote Refinery, Nigeria’s GDP growth will be expected to be 3.34% in 2024 and rise to 4.13% in 2030 but with Dangote Refinery, it is projected to record 4.15% in 2024 and rise to 6.21% in 2030,” said Afolabi Olowookere, MD and chief economist at ADSR.

“The refinery will positively and hugely impact the economy,” Olowookere added.

Nigeria, once Africa’s biggest economy, is projected to slip to fourth in the ranking after the two-time devaluation of its currency, with the country’s GDP expected to slow to $253 billion by the end of this year, according to the International Monetary Fund.

But the $20 billion largest single-train facility built by Africa’s richest man, Aliko Dangote, could turn around the fortunes of Nigeria’s dollar-starved economy by bringing the badly needed supply.

“With reduced imports and the potential for export of surplus refined products from the Dangote refinery, Nigeria’s trade balance is expected to improve.

“This would contribute positively to GDP growth and economic stability,” ADSR stated.

Olayemi Cardoso, the governor of Nigeria’s central bank also said recently that lifting petroleum products from the Dangote refinery will ease the pressure on the economy and reduce the demands for FX. This will in turn beat down the pressure on the naira and ensure a stabilized exchange rate.

According to the report, the refinery holds the key to unlocking thousands of job opportunities if it becomes fully operational by 2025, thereby reducing Nigeria’s increasing unemployment and contributing to the country’s overall growth.

While the Dangote refinery is expected to significantly reduce Nigeria’s dependence on imported refined products, various factors, including capacity limitations, market dynamics, and government policies, may still necessitate continued importation and subsidy payments in the short to medium term, the report said.

It also added that battling with crude oil locally to boost production would reduce investors’ confidence and may dampen the projection of the refinery growing Nigeria’s struggling economy.