A recent report suggests that the Dangote Oil Refinery is projected to significantly impact Nigeria’s Gross Domestic Product (GDP) by 2025. The report indicates that the refinery’s operation is expected to boost GDP growth to $322 billion by 2025. Without the refinery, Nigeria’s GDP growth was forecasted to be lower, at 3.34% in 2024, increasing to 4.13% by 2030. However, with the refinery in operation, GDP growth is projected to rise to 4.15% in 2024 and reach 6.21% by 2030.
The report also highlights that Nigeria’s GDP at current market prices is expected to increase from N234.43 trillion in 2023 to N364.94 trillion in 2025. By 2030, GDP is projected to reach N806.91 trillion. The Managing Director at Data Services & Resources Ltd stated that the refinery’s impact is anticipated to boost GDP to $370.49 billion in 2026, $374.69 billion in 2027, and continue rising to $412.91 billion in 2028 and $446.98 billion in 2029.
The report emphasizes that the Dangote Refinery, which began initial production in January 2024, is set to have a significant positive impact on the economy. It is expected to reach a processing capacity of 650,000 barrels per day by the first quarter of 2025, producing substantial amounts of gasoline, diesel, and aviation fuel annually.
Furthermore, the report mentions that the refinery will contribute to fiscal sustainability by creating numerous direct and indirect job opportunities, reducing Nigeria’s reliance on imported petroleum products, and improving the country’s trade balance through increased exports of refined products. By reducing fuel subsidies and generating substantial tax revenues, the Dangote Refinery is poised to strengthen Nigeria’s fiscal position and provide resources for infrastructure and social development projects.
The report also notes that the Nigerian government initially held a stake in the refinery, which has been subsequently reduced. The refinery’s operation is expected to stimulate growth in various sectors, including oil refining, chemical and pharmaceutical products, plastic and rubber production, as well as cement manufacturing.
In addition, the Federal Government has initiated the sale of crude oil to Dangote Refinery and other local refineries in the local currency, starting from October 1. The Minister of Finance and Coordinating Minister of the Economy made this announcement, stating that the sales of crude oil to local refineries in naira officially began on October 1, 2024. Stakeholders have affirmed the strategic initiative, which aims to enhance the country’s economic landscape.