Dangote Refinery full capacity to push Naira below N1,000/$ – Otedola

Billionaire investor Femi Otedola has projected that the Naira could strengthen to below N1,000 per dollar before the end of the year, citing Dangote Petroleum Refinery’s attainment of full capacity.

In a post on X on Thursday, Otedola described the feat achieved by the refinery as a key turning point for Nigeria’s foreign exchange outlook.

The billionaire congratulated Africa’s richest man, Aliko Dangote, on what he described as a transformational milestone for Nigeria and the continent.

Otedola said that the refinery’s capacity to supply up to 75 million litres of Premium Motor Spirit daily could significantly reduce the country’s dependence on imported fuel.

“With domestic refining now firmly underway after decades of reliance on imports, pressure on the foreign exchange market should ease significantly,” Otedola wrote.

“I am optimistic that the naira will strengthen meaningfully, and trading below N1,000/$1 before year end is increasingly within reach,” he added.

Beyond the current milestone, Otedola disclosed that Dangote has commenced an additional $12 billion expansion project aimed at increasing refining capacity to 1.4 million barrels per day.

The expansion will also include the production of 2.4 million tonnes of polypropylene and 400,000 metric tonnes of Linear Alkyl Benzene, a key input in detergent manufacturing.

Polypropylene is widely used in plastics and packaging, while Linear Alkyl Benzene is a major raw material for household and industrial cleaning products.

Increased local production of these inputs could reduce import dependence in Nigeria’s manufacturing sector and further lower foreign exchange demand.

“Aliko is not stopping here,” Otedola wrote, noting that work on the expansion has already commenced.

Nigeria has historically spent billions of dollars annually importing refined petroleum products due to limited domestic refining capacity, a trend that has exerted sustained pressure on the foreign exchange market.

Fuel imports have traditionally been one of the largest components of Nigeria’s import bill, driving demand for US dollars and contributing to exchange rate volatility.

Analysts have long argued that large scale domestic refining could help conserve foreign reserves by cutting the need for dollar denominated fuel imports. Otedola’s remarks align with this argument, linking the refinery’s ramp up to full capacity with the potential easing of demand in the FX market.