Economist and Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, has projected that Nigeria’s economy could expand to $600bn by 2030, driven by increased private-sector investment and the multiplier effect of major industrial projects such as the Dangote Petroleum Refinery.
Mr Rewane spoke in Abuja during an investor roadshow ahead of the planned initial public offering of the 700,000-barrel-per-day Dangote Refinery and Petrochemicals.
He said Nigeria’s nominal Gross Domestic Product could rise from a 2025 baseline of $278bn to $600bn by 2030, while annual real GDP growth could increase from about four per cent to between seven and eight per cent.
Mr Rewane said the projection was based on a number of economic improvements, including inflation moderating from 15 per cent to between eight and 10 per cent, non-oil GDP growth rising to between seven and eight per cent, and oil production increasing from 1.5 million barrels per day to 2.2 million barrels per day.
He also projected investment to rise from 26 per cent of GDP to 36 per cent, while manufacturing growth could increase from three per cent to between eight and 10 per cent, alongside improvements in the reliability of energy supply.
Explaining the role of the refinery, he said, “What the Dangote refinery is doing is getting into investment and adding that, and that gives you a multiplier effect.”
Mr Rewane added that increased investment and exports could strengthen the naira and improve Nigeria’s foreign exchange reserves.
Dangote IPO targets N2.15tn
President of the Dangote Group, Aliko Dangote, said the planned IPO is expected to raise about N2.15tn to finance the refinery’s expansion programme.
Mr Dangote, whose message was delivered by the Senior Adviser, Special Projects and Strategic Relations to the Group President, Mrs Fatima Wali-Abdurrahman, said the shares would be offered at N525 each, with a minimum subscription of 10 shares.
He described the offer as “The IPO for the People,” saying the pricing was intended to allow wider participation and give Nigerians an opportunity to own a stake in the refinery.
The offer comprises 4.1 billion ordinary shares at N525 per share, with the proceeds intended as growth capital for the refinery’s next phase of expansion.
Refinery expansion plans
The Dangote refinery is currently Africa’s largest refinery, with a capacity of 700,000 barrels per day, and is undergoing expansion that is expected to take its capacity to 1.4 million barrels per day.
Mr Dangote recently said his ambition was to make the facility the largest refinery in the world by 2028.
The planned IPO is therefore expected to provide additional capital for the expansion while widening ownership of the major energy project.
Mr Rewane argued that domestic refining could generate broader economic benefits by reducing Nigeria’s dependence on imported refined petroleum products and allowing more value to be captured within the country.
He said, “If you export one barrel of oil, you get $100 per barrel today. If you do the value add and transform this into a conversion to wealth, you get the equivalent of $200 per barrel.”
He added that increased domestic refining could support import substitution, deepen the capital market and reduce Africa’s dependence on refined petroleum products imported from Europe and the Middle East.
The projected economic expansion could translate into increased investment, manufacturing activity, employment opportunities and stronger export earnings if the assumptions underpinning the forecast materialise.
For ordinary Nigerians, however, the significance will ultimately depend on whether increased industrial activity translates into more jobs, improved purchasing power, more reliable energy supply and greater economic stability.
The Dangote IPO also creates an opportunity for Nigerians to participate directly in the ownership of one of the country’s biggest industrial projects, with the minimum subscription set at 10 shares.
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