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Nigerian billionaire Femi Otedola has said the naira could strengthen to trade below ₦1,000 to the U.S. dollar before the end of the year, citing the growing impact of the Dangote Petroleum Refinery on fuel imports and foreign exchange demand.
In a statement posted on X, Otedola linked his outlook on the currency to the Dangote refinery’s attainment of full operational capacity, describing the development as a structural shift for Nigeria’s economy. He congratulated Aliko Dangote, president of the Dangote Group, after the facility reached its nameplate production level of 650,000 barrels per day.
Otedola said the refinery’s output, including the ability to supply up to 75 million litres of Premium Motor Spirit (PMS) daily, would significantly reduce Nigeria’s dependence on imported fuel, a longstanding drain on the country’s foreign exchange reserves. “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 ₦1,000/$1 before year-end is increasingly within reach.”
Nigeria has historically relied heavily on fuel imports despite being Africa’s largest oil producer, due to decades of underinvestment and dysfunction in state-owned refineries. This dependence has made the energy sector one of the biggest sources of demand for foreign currency, contributing to chronic pressure on the naira and repeated currency crises.
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The Dangote Petroleum Refinery, located in the Lekki Free Trade Zone near Lagos, is the largest single-train refinery in the world and is expected to process Nigerian crude into petrol, diesel, aviation fuel and other refined products for domestic consumption and export. Its gradual ramp-up has been closely watched by policymakers, investors and currency traders as a potential turning point in Nigeria’s balance-of-payments position.
Otedola argued that full-scale domestic refining could ease structural demand for dollars by sharply reducing fuel import bills, logistics costs and related FX transactions, which have long been embedded in Nigeria’s trade flows. Beyond refining, he also disclosed that Dangote has begun a new $12 billion expansion programme that would more than double the refinery’s capacity to 1.4 million barrels per day. According to Otedola, the expansion will also integrate major petrochemical production facilities.
The project includes plans to produce 2.4 million tonnes of polypropylene annually, a key industrial input used in packaging, textiles and manufacturing, as well as 400,000 metric tonnes of Linear Alkyl Benzene, a core raw material for detergent and cleaning product production.
These additions would position the Dangote complex not only as a fuel producer but as a major petrochemical hub for Nigeria and the wider African market, potentially reducing imports of industrial inputs that are currently sourced from Asia, Europe and the Middle East.
Otedola described the developments as a milestone for Nigeria’s economic transformation, saying the refinery and its expansion represent “a historic achievement” for the country and the continent. The comments come at a time of deep currency volatility in Nigeria, following recent foreign exchange reforms and market liberalisation policies. The naira has faced persistent depreciation pressures driven by FX shortages, declining oil output in past years, capital flight, inflation, and high import dependence.
The Central Bank of Nigeria has been implementing reforms aimed at unifying exchange rates, attracting foreign investment and restoring confidence in the FX market, but structural pressures have continued to weigh on the currency. Economists have repeatedly identified fuel imports as one of the largest and most consistent sources of dollar demand, particularly during periods of high global oil prices. Any sustained reduction in refined product imports could materially alter Nigeria’s external account dynamics.
However, analysts also note that currency stability depends on multiple factors beyond refining capacity, including crude oil production levels, security in oil-producing regions, fiscal policy discipline, external debt servicing obligations, investor confidence, and broader macroeconomic stability.
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The Dangote refinery’s operational success has been viewed as strategically important not only for energy security but for industrial development, trade balance improvement, and long-term FX market stability. Nigeria’s government has previously said domestic refining could save billions of dollars annually in import costs, while also creating export revenues through refined product sales to regional markets in West and Central Africa. The refinery’s full capacity milestone follows a phased production rollout, with initial operations beginning earlier and output volumes increasing gradually to meet domestic demand for petrol, diesel and aviation fuel.
Industry officials have said that as output stabilises, the refinery is expected to displace a large share of imported fuel products that Nigeria has historically sourced from Europe and Asia. The proposed expansion into petrochemicals further broadens the project’s economic footprint, potentially positioning Nigeria as a manufacturing supply hub rather than a raw commodity exporter alone.
Otedola’s remarks reflect growing confidence among some business leaders that large-scale industrial infrastructure projects can alter Nigeria’s macroeconomic fundamentals if they operate consistently and at scale. There has been no official forecast from the Central Bank or the federal government supporting a specific exchange rate target, and authorities have avoided making public predictions on the naira’s future value.
Market analysts caution that while domestic refining can reduce FX demand, the speed and scale of its impact will depend on operational stability, pricing structures, supply chains, and broader policy coordination across fiscal, trade and monetary institutions.
