S&P Links Nigeria’s Economic Revival To Dangote Refinery, Key Reforms

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The Dangote Petroleum Refinery & Petrochemicals is emerging as a major driver of Nigeria’s improv­ing economic outlook, following the country’s sovereign credit rating upgrade by S&P Global Ratings.

In its latest assessment, S&P upgraded Nigeria’s long term for­eign and local currency sovereign credit ratings to “B” from “B-”, citing stronger economic growth, improved external balances, ris­ing oil production, and expanded domestic refining capacity as key factors supporting the country’s recovery.

The global ratings agency spe­cifically identified the operational ramp up of the 650,000 barrels per day Dangote Petroleum Refinery & Petrochemicals as a major con­tributor to Nigeria’s improving balance of payments position and broader economic resilience.

According to S&P, the refin­ery’s full capacity operations are helping to strengthen Nigeria’s current account surplus, reduce dependence on imported refined petroleum products, and improve foreign exchange liquidity.

“Significant refining capacity is now also online; Dangote In­dustries Ltd.’s large scale refinery and petrochemical complex has ramped up to near its maximum capacity of 650,000 barrels per day,” the report stated.

S&P projected that Nigeria’s current account surplus would im­prove to 5.8 percent of GDP in 2026 from 4.8 percent in 2025, supported partly by increased domestic refin­ing and hydrocarbon exports.

The report noted that the re­finery is helping to ensure the availability of refined fuel, gas, and fertiliser for the domestic mar­ket, while also providing a buffer against global supply disruptions triggered by ongoing geopolitical tensions in the Middle East.

The agency further stated that Nigeria’s improving external position has been supported by reduced fuel import dependence, the removal of fuel subsidies, exchange rate liberalisation, and higher oil production.

Foreign exchange reserves, according to S&P, have risen sig­nificantly from about $33 billion in 2023 to nearly $50 billion by early 2026, aided partly by lower import demand for refined petroleum products following the commence­ment of operations at the Dangote Refinery.

The report also highlighted the refinery’s broader role in support­ing Africa’s industrialisation am­bitions, noting that Nigeria is tran­sitioning from being primarily a crude oil exporter to an emerging producer and exporter of refined petroleum products.

S&P disclosed that Dangote Industries has already unveiled plans to undertake feasibility studies aimed at expanding refin­ing capacity to about 1.4 million barrels per day from the current 650,000 barrels per day.

The agency said the planned expansion, alongside the rehabil­itation of other local refineries, could further strengthen Nige­ria’s economy and deliver addi­tional gains to the country’s bal­ance of payments position over the next few years.