ENUGU, Nigeria (VOICE OF NAIJA)- With the commencement of operations at the $20 billion Dangote Refinery following the removal of fuel subsidy by President Bola Tinubu in May, expectations are high for various positive impacts on Nigeria’s economy.
On foreign reserves, the refinery, expected to produce 650,000 barrels per day, presents an opportunity for Nigeria to boost its foreign reserves through the exportation of refined petroleum products.
Energy expert Yomi Sola Falana highlighted the potential enhancement of the country’s foreign currency earnings.
The Lagos-based energy expert, said: “The expected exportation of the refined petroleum products by the Dangote Refinery will enhance the country’s foreign currency earnings and thus result in boosting Nigeria’s foreign reserves.”
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Foreign Exchange Savings:
As the Dangote Refinery aims to halt the importation of diesel, petroleum products, fertilizers, and petrochemicals, it is projected to save Nigeria over $26 billion annually in foreign exchange.
This move could have a significant positive impact on the country’s economic stability.
Job Creation and Taxes:
Former president of the Nigeria Society of Petroleum Engineers, Joe Nwakwue, emphasized the substantial benefits in terms of job creation and taxes for both federal and sub-national governments.
The refinery is anticipated to generate thousands of direct and indirect jobs, contributing to economic growth.
Naira Value:
The commencement of operations at the Dangote Refinery is expected to positively influence the value of the Naira.
By exporting petroleum products and accepting payment in Nigerian Naira, the pressure on the demand for US Dollars or Euros is anticipated to decrease, leading to an improvement in the exchange rate of the Nigerian Naira against foreign currencies.
In his analysis, Falana said, “Furthermore, the payment for the petroleum refined products in Nigerian Naira, will reduce the pressure on the demand for US Dollars or Euros and thus, resulting in improving the Nigerian Naira exchange rate to the foreign rate to the foreign currencies.”