Billionaire investor Femi Otedola has projected that the naira could strengthen to below N1,000 per dollar before the end of the year, linking the outlook to the Dangote Petroleum Refinery reaching full operational capacity.
In a post on X on Thursday, Otedola described the refinery’s ramp-up as a potential turning point for Nigeria’s foreign exchange dynamics, arguing that domestic fuel production could significantly ease dollar demand.
Congratulating Aliko Dangote on what he called a transformational milestone, Otedola said the refinery’s ability to supply up to 75 million litres of Premium Motor Spirit (PMS) daily would cut reliance on imported fuel.
ALSO READ Dangote Refinery hits full 650,000 bpd, first in global CDU/MS capacity
“With domestic refining now firmly underway after decades of reliance on imports, pressure on the foreign exchange market should ease significantly,” he wrote.
“I am optimistic that the naira will strengthen meaningfully, and trading below N1,000/$1 before year-end is increasingly within reach.”
He also disclosed that Dangote has begun a $12 billion expansion programme aimed at increasing refining capacity to 1.4 million barrels per day. The project includes plans to produce 2.4 million tonnes of polypropylene and 400,000 metric tonnes of Linear Alkyl Benzene — industrial inputs widely used in plastics, packaging and detergent manufacturing.
Increased local production of these materials could reduce import dependence in the manufacturing sector and further lower foreign exchange demand, Otedola noted, adding 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, making fuel imports one of the largest components of the country’s import bill and a key driver of dollar demand and exchange rate volatility. Analysts have long argued that large-scale local refining could conserve foreign reserves by reducing dollar-denominated fuel imports.
The Dangote Refinery, located in the Lekki Free Zone in Lagos, is designed to process 650,000 barrels of crude oil per day, making it the largest single-train refinery globally. At full output, it is expected to meet domestic demand for petrol, diesel and aviation fuel, with surplus available for export.
According to industry reports, the facility recently reached its full designed capacity following optimisation of its Crude Distillation Unit (CDU) and Motor Spirit (MS) production block. The company said the milestone strengthens steady-state operations and marks what it describes as the first time a refinery of that scale has achieved full nameplate capacity in a single train.
The refinery has also commenced a 72-hour performance testing programme with technology licensor UOP to validate efficiency and ensure compliance with global operational standards.
