The newly commissioned Dangote Petroleum Refinery & Petrochemicals is set to help Nigeria save not less than $30billion in refined petroleum products importation whilst boosting the foreign exchange inflow by $10billion.
This is as President Muhammadu Buhari said the plant would advance Nigeria’s drive towards self-sufficiency in food production, among other national objectives.
Speaking at the commissioning of the Dangote Refinery and Petrochemicals Complex in Lagos on Monday, May 22, 2023, the governor of the CBN, Godwin Emefiele, noted that the Dangote refinery which has the capacity to process 650,000 barrels of crude oil per day, is the largest single-train refinery in the world would enhance a surge in foreign exchange which will further strengthen official reserves and promote exchange rate stability.
Noting that the impact of the savings is expected to be reflected in Nigeria’s foreign exchange reserves by reducing the pressure on balance of payments, he said “there are also substantial benefits that we will gain from the export of refined products to the rest the world.
“In addition to the nearly US$30 billion foreign exchange savings from the reduction in petroleum imports, the economy is projected to benefit an extra US$10 billion of foreign exchange inflow annually through the export of refined petroleum products, which will further boost our official reserves and enhance exchange rate stability.
“This project will equally provide support to the fiscal operations of the government as it could help ease budget constraints of funding the petroleum subsidy and engender fiscal savings. Available data indicate that, over a five-year period, fuel subsidy in Nigeria rose more than nine-folds from about N154 billion in 2017 to over N1.43 trillion before another three-fold rise to N4.4 trillion by the end of 2022.
“A simple straight-line projection suggests that this figure could surpass N7 trillion within the next three years if we do not tackle it effectively. Thankfully, the Dangote Refinery and Petrochemicals could spare Nigeria about N5 to N7 trillion annually in fiscal expenditure of the federal government over the next five years,” he stated.
Meanwhile, Emefiele noted that Dangote Group had started repaying some of the commercial loans even before the commissioning of this facility which he noted reflects the commercial capability of the Group and its Chairman.
“Following extensive repayments, outstanding debt has dropped appreciably from over$9 billion to $3 billion.
“I must at this juncture appreciate all the participating local Nigerian banks, who did not only partner with the project through effective financing but were keenly aware of the importance of the project for our nation. They provided immense support and exceptional understanding, even when interest payments and principal repayment had fallen due,” he added.
In his keynote address, an elated President Buhari said the Dangote refinery underscored the resilience of Alhaji Aliko Dangote, adding that the plant would advance Nigeria’s drive towards self-sufficiency in food production, among other national objectives.
According to him, the Dangote refinery, which is adjudged the largest refinery in Africa, along with the fertilizer plant, would assist Nigerians in their pursuit of agriculture as a real business and contribute to the stabilisation of the country’s oil sector.
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