*Analysts say it is expected that the coming on stream of the Dangote Petroleum Refinery will also impact positively the downstream sector of the Nigerian economy this year

Isola Moses | 绿帽献妻

Experts have highlighted how Dangote Petroleum Refinery will enhance petroleum products distribution across the African continent, when the oil refining facility is completed and activated to begin operations in Nigeria.

It was gathered the Centre for the Promotion of Private Enterprise (CPPE), an economic advocacy group, has identified Dangote Refinery as one of the key expected drivers of growth that would impact positively the downstream sector of the country鈥檚 economy 聽2022.

Dr. Muda Yusuf, CEO of CPPE

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

Mr. Bismarck Rewane, Managing Director/Chief Executive Officer (CEO) of Financial Derivatives, however, warned that the oil refinery would not be a final solution to Nigeria鈥檚 economic crises when it becomes operational in the country.

Rewane stated in the report: 鈥淭he coming on stream of Dangote Refinery will no doubt enhance product distribution across Africa. Will Dangote refinery solve Nigeria鈥檚 problem?

鈥淭he answer is no. But the company is going to make Nigeria an exporter of refined petroleum products.鈥�

Likewise in the company鈥檚 Nigeria Economic Outlook for 2022, Dr. Muda Yusuf, CEO of Centre for the Promotion of Private Enterprise, said activation of the Petroleum Industry Act (PIA), in 2022, is expected to impact positively the economic outlook in Nigeria.

Dr. Yusuf noted: 鈥淲e expect to see positive outcomes as investor sentiments in the oil and gas sector improve on account of the reforms anchored on the PIA.

鈥淭his will however depend on the political will deployed to drive the implementation of the provisions of the Act.

鈥淚t 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.鈥�

Mr. Bismarck Rewane, Managing Director/CEO of Financial Derivatives Company Limited

According聽 CPPE Chief, 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.

Yusuf said: 鈥淭his 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.鈥�

However, he as well observed if the Dangote Refinery comes on stream this year, the fiscal pressure on the economy may abate, but not completely eliminated聽 in the economy.

The economist submitted because the service sector is less-vulnerable to the structural constraints of the economy, especially the real sector of the economy, it will continue to outpace the real sector in 2022.

鈥淭he service sector of the Nigerian economy will continue to outpace the real sector in 2022.

鈥淚n the third quarter of 2021, service sector contribution to GDP was 50 percent and the growth of the sector was 8.41 percent. Oil sector contribution to GDP was 7.5 percent while the non-oil sector contribution was 92.5 percent.

鈥淲hile the industrial sector growth contracted by 1.63 per cent, agriculture grew by 1.2 per cent,鈥� he stated.

Yusuf said that Nigeria鈥檚 Gross Domestic Product (GDP) growth would remain fragile at about three percent, pointing out that the key expected drivers of growth would be sustained recovery of global oil price.

He 聽noted: 鈥淲e expect that the average oil price in 2022 will exceed the budgeted benchmark of $62 per barrel, offering some fiscal headroom.

鈥淭his would be powered by higher energy demand driven by the recovery of economic activities globally.鈥�

The economist added: 鈥淒espite the downside risks, he noted, the economy would continue to present huge opportunities for investors across all sectors.

鈥淭his is on account of the resourcefulness of the Nigerian people, especially the entrepreneurs.

鈥淥ther inherent strengths of the Nigerian economy include the market size, the population, and the demographic characteristics.鈥�

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