In its latest assessment, S&P Global Ratings raised Nigeria’s long-term sovereign rating from B- to B, pointing to the growing impact of the refinery on fuel imports, foreign exchange reserves and the country’s overall external financial position.
The refinery, owned by billionaire industrialist Aliko Dangote, has now ramped up operations close to its 650,000 barrels-per-day processing capacity, making it the largest single-train refinery in Africa and one of the biggest in the world.
According to S&P, the facility is already transforming Nigeria’s economy by drastically reducing dependence on imported petroleum products — a long-standing burden for Africa’s largest crude oil producer.
For decades, Nigeria spent close to $10 billion annually importing refined fuel despite exporting crude oil in large volumes. Analysts say the Dangote Refinery is beginning to reverse that imbalance by keeping more energy production and refining within the country.
S&P noted that the refinery’s impact extends beyond fuel supply alone.
“Domestic supply helps ensure the availability of refined fuel, gas, and fertiliser for the Nigerian market, providing a buffer against the global and regional supply constraints caused by the Middle East conflict,” the agency stated in its report.
The agency added that local refining capacity is helping shield Nigeria from global energy shocks and rising geopolitical tensions, especially disruptions linked to instability in the Middle East and around major oil shipping routes.
Nigeria’s external finances have also shown significant improvement.
The country’s gross foreign exchange reserves reportedly climbed to $50 billion by March 2026, a sharp increase from approximately $33 billion recorded in 2023. S&P projects Nigeria’s current account surplus will rise further to 5.8% of Gross Domestic Product in 2026, compared with 4.8% the previous year.
The ratings agency expects Nigeria’s reserves to continue growing steadily through 2029 as fuel import costs decline and oil export earnings strengthen.
“We expect Nigeria's current account will maintain a strong surplus position in 2026-2029, and that FX reserves will continue to accumulate through to 2029,” S&P said.
The report also highlighted plans by Dangote Industries to expand refining capacity from 650,000 barrels per day to approximately 1.4 million barrels per day in the future.
S&P described the proposed expansion as potentially transformative, not only for Nigeria’s energy independence but also for its sovereign credit profile and broader economic stability.
“The country's refining capacity is also increasing thanks to the new Dangote refinery,” the report noted.
Industry experts believe the refinery could eventually position Nigeria as a major exporter of refined petroleum products across Africa, reducing dependence on European and Asian fuel imports throughout the continent.
The agency further pointed to ongoing rehabilitation work at Nigeria’s state-owned refineries in Port Harcourt, Warri and Kaduna, saying their eventual recovery could strengthen the country’s refining output and improve the balance of payments even further.
Despite the positive outlook, S&P warned that inflation remains one of Nigeria’s biggest economic challenges. However, the agency expects price pressures to gradually ease over the next few years, projecting inflation could fall below 10% by 2028 if reforms continue.
The Dangote Refinery’s growing influence marks a major shift in Nigeria’s economic structure, with analysts increasingly viewing the project as more than just an industrial investment.
Beyond refining crude oil, the facility is now being seen as a strategic economic stabiliser capable of improving foreign exchange liquidity, strengthening energy security and reducing Nigeria’s vulnerability to global supply disruptions.