Dangote Refinery to boost downstream sector growth in 2022

The Centre for the Promotion of Private Enterprise (CPPE), an economic advocacy group, has identified Dangote Petroleum Refinery as one of the key expected drivers of growth that would impact positively on the downstream sector of the Nigerian economy in 2022.

Likewise, Financial Derivatives Company Limited, a financial institution, in its recent Economic Report for 2022, expressed a firm belief that Dangote Refinery would boost the growth of the downstream sector of the economy and enhance petroleum products distribution across Africa.

The managing director/CEO of Financial Derivatives Company, Bismarck Rewane, however warned that the refinery, when operational, would not be a final solution to Nigeria’s economic crises.

“The coming on stream of Dangote Refinery will no doubt enhance product distribution across Africa. Will Dangote refinery solve Nigeria’s problem? The answer is no. But the company is going to make Nigeria an exporter of refined petroleum products,” he added.

In a Nigeria Economic Outlook for 2022 released by the CPPE, its chief executive officer, Dr Muda Yusuf said an activation of the Petroleum Industry Act (PIA) in 2022 is expected to impact positively on the economic outlook.

“We expect to see positive outcomes as investor sentiments in the oil and gas sector improve on account of the reforms anchored on the PIA. This will however depend on the political will deployed to drive the implementation of the provisions of the Act. It is also expected that the coming on stream of the Dangote refinery in 2022 will also impact positively on the downstream sector of the economy,” he added.

He said the average oil price in 2022 is expected to exceed the budgeted benchmark of sixty-two dollars ($62) per barrel, offering some fiscal headroom. This, he noted, would be powered by higher energy demand driven by the recovery of economic activities globally.

“This trajectory is expected to impact on our foreign reserve and strengthen the capacity of the Central Bank of Nigeria (CBN) to support the foreign exchange market”, Yusuf said. He added that if the Dangote refinery comes on stream in 2022, the fiscal pressure on the economy may abate, but not completely eliminated.

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17th January 2022