The 650,000 barrels-per-day Dangote Petroleum Refinery and Petrochemicals is playing a major role in Nigeria’s improving economic outlook following the recent sovereign credit rating upgrade by S&P Global Ratings.
In its latest report, S&P upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings from “B-” to “B”, attributing the improvement to stronger economic growth, rising oil production, better external balances, and increased domestic refining capacity.
The global ratings agency identified the operational expansion of the Dangote Refinery as one of the major factors boosting Nigeria’s economic recovery and strengthening the country’s balance of payments.
According to the report, the refinery’s near full-scale operations are helping Nigeria reduce its dependence on imported petroleum products, improve foreign exchange liquidity, and strengthen the country’s current account position.
S&P stated that the refinery and petrochemical complex owned by Dangote Industries has ramped up close to its full production capacity of 650,000 barrels per day.
The agency projected that Nigeria’s current account surplus could rise to 5.8 percent of GDP in 2026, compared to 4.8 percent in 2025, driven partly by higher hydrocarbon exports and increased local refining activities.
The report added that the refinery is ensuring a more stable supply of refined fuel, gas, and fertiliser within Nigeria while also shielding the country from global supply disruptions caused by geopolitical tensions in the Middle East.
S&P also linked Nigeria’s improving external position to reduced fuel imports, fuel subsidy removal, exchange rate reforms, and increased crude oil production.
The agency disclosed that Nigeria’s foreign exchange reserves have grown significantly from about $33 billion in 2023 to nearly $50 billion by early 2026. It noted that the decline in fuel import demand following the commencement of operations at the Dangote Refinery contributed to the increase.
The report further highlighted the refinery’s importance to Africa’s industrialisation drive, stating that Nigeria is gradually moving from being mainly a crude oil exporter to becoming a producer and exporter of refined petroleum products.
S&P revealed that Dangote Industries is considering expanding the refinery’s capacity from 650,000 barrels per day to about 1.4 million barrels per day through planned feasibility studies.
According to the agency, the proposed expansion, together with the rehabilitation of other local refineries, could provide additional economic gains and further strengthen Nigeria’s balance of payments in the coming years.
While acknowledging that global oil prices and market-based pricing still affect domestic fuel prices, S&P maintained that increased local refining capacity gives Nigeria stronger energy security and reduces exposure to external supply shocks.
The agency also credited Nigeria’s improving macroeconomic outlook to reforms introduced since 2023, including exchange rate liberalisation, fiscal adjustments, increased petroleum revenue remittances, and improved oil production through enhanced security measures in the Niger Delta.
S&P added that Nigeria’s economy is expected to maintain steady growth despite inflationary pressures, with ongoing reforms continuing to boost investor confidence and support expansion in the non-oil sector.
However, the agency noted that structural challenges such as high inflation, low formal employment, and a narrow tax base remain concerns, even as the country’s external position continues to improve.
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