NMDPRA Refutes Bank of America’s Naira Projection, Says Naira to Appreciate

Following the Bank of America projection that the Nigerian Naira would decline by 20% in the next six to nine months, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said the Naira would appreciate against its global counterparts in 2023.

Explaining the modalities for its position, NMDPRA said most of the challenges impacting the value of the Nigerian Naira are basically demand and supply-related issues. This, the agency explained would be addressed by the completion of Dangote Refinery.

Located in the Lagos Free Trade Zone (LFZ), Dangote Refinery is expected to meet Nigeria’s domestic demand for fuel and also leave enough for exportation.

“The refinery, with 650,000 barrels per-day installed capacity is expected to double the total output of Nigeria’s existing ailing refining infrastructure and meet 100 per cent of the Nigerian requirement of all refined products will pump out fuel any moment soon,” the agency declared.

With Nigeria presently spending about $50 billion on refined petroleum products importation per annum and Dangote Refinery expected to commence operations next year, the Central Bank of Nigeria (CBN) would be able to boost dollar supply substantially and meet demand in 2023.

Investors King had earlier reported that the Bank of America sees an additional 20 percent decline in naira value in 2023. The global lender noted that the dollar will be exchanged for N520/$ within the next six to nine months.

However, NMDPRA argued that Dangote refinery capacity would be enough to ease dollar demand pressure on CBN and increase the apex bank fiscal space.

“Dangote Oil Refinery is a 650,000 barrels per day integrated refinery project under construction in the Lekki Free Trade Zone, Lagos. It is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility,” the NMDPRA said during the visit,” it said.

Mr. Devakumar Edwin, Group executive director, Strategy, Portfolio Development & Capital Projects, Dangote Industries Limited, on his part said the refinery would deepen Nigeria’s economic productivity and enhance CBN forex intervention.

He said “it can meet 100 per cent of the Nigerian requirement of all liquid products (Gasoline, Diesel, Kerosene and Aviation jet), and also have surplus of each of these products for export.

“The high volume of petrol output from the refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products,” he stated adding that the refinery would produce Euro-V quality gasoline, diesel, jet-fuel, kerosene and poly-propylene for local consumption and also have surplus of each of the products for export,” he stressed.