‘Dangote Refinery Offers Positive Trajectory For Nigeria’s Exchange Rate’

Muda Yusuf is the Director General of Lagos Chamber of Commerce and Industry (LCCI). He holds degrees in Economics from the University of Ilorin and the University of Lagos. Passionate about private sector development and a strong private sector advocate, he has played active roles in public private partnerships on all levels of government. In this interview, Yusuf, says the completion of the Dangote Refinery is a game changer for the Nigerian oil and gas sector. He believes that the refinery will reduce pressure on the country’s foreign reserves and foreign exchange earnings. What impact would the coming on stream of the Dangote Refinery have on the Nigeria economy? Dangote Refinery will on completion be a game changer for the Nigerian oil & gas industry as well as the Nigerian Economy.
The impact will be profound and multi-dimensional. Currently, the biggest pressure on our foreign reserves and foreign exchange earnings is the importation of petroleum products. With a refinery capacity of 650,000 barrels per day, petrochemical plant that would produce 780KTPA of polypropylene, 500 KTPA of polyethylene, and a fertiliser plant with a capacity to produce 3 million tonnes of Urea per annum, the import substitution effect would be significant. An estimated $10 billion is spent by the country annually on the importation of Petroleum products.
Therefore, the coming on board of Dangote Refinery will conserve foreign exchange through the sales of Petroleum products directly to the domestic market, thus drastically reducing importation of petroleum products. Additionally, the impact of this on the macro-economic dynamics will be quite significant. Refineries come with many other related industries, particularly Petrochemicals and fertilizer plant. This implies that many of the raw materials currently being imported, especially in the plastics and chemical industries will be sourced from the Petro-chemical plants.” Similarly, the fertilizer plant which is highly dependent on gas will eliminate the need for importation of fertilizer from our scarce foreign exchange.