A recent report has projected that the Dangote Oil Refinery will significantly increase Nigeria’s Gross Domestic Product (GDP), raising it to $322 billion by 2025. The report, titled “Impact of Dangote Refinery on the Nigerian Economy,” was released by Data Services & Resources Ltd and highlights the transformative potential of the refinery on the nation’s economy.
According to the report, without the refinery’s operation, Nigeria’s GDP was expected to grow by 3.34% in 2024 and increase to 4.13% by 2030. However, with the refinery fully operational, GDP growth is anticipated to rise to 4.15% in 2024 and surge to 6.21% by 2030.
The report further estimates that Nigeria’s GDP at current market prices will grow from N234.43 trillion in 2023 to N304.8 trillion in 2024, with further expansion to N364.94 trillion by 2025. By 2030, the nation’s GDP is projected to reach N806.91 trillion.
Afolabi Olowookere, Managing Director of Data Services & Resources Ltd, emphasized the profound impact of the refinery, expecting Nigeria’s GDP to reach $370.49 billion by 2026 and continue growing to $446.98 billion by 2029.
The Dangote Refinery, which commenced production in January 2024, has a processing capacity of 650,000 barrels per day, expected to produce 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of aviation fuel annually by the first quarter of 2025.
In addition to its contribution to GDP growth, the refinery is set to strengthen Nigeria’s fiscal sustainability by reducing reliance on imported petroleum products, increasing exports, and creating jobs. The reduction of fuel subsidies and the generation of substantial tax revenues will also bolster the nation’s financial position.
Moreover, the refinery’s operation is expected to drive growth across the oil refining, chemical, pharmaceutical, plastic, and rubber sectors, as well as cement manufacturing, further stimulating investment in the Nigerian economy.
In line with this development, the Nigerian government has commenced the sale of crude oil to the Dangote Refinery and other local refineries in naira, effective October 1, 2024. This initiative aims to support local refineries and strengthen the country’s trade balance.
The ongoing sale of crude oil in naira was affirmed by Nigeria’s Minister of Finance, Wale Edun, who highlighted the strategic importance of this move for the country’s economic future.
