CBN Governor: The chance of FG to Save 40% Of Forex Earnings With Dangote Refinery

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, says Nigeria will save 40 per cent of its foreign exchange (FX) earnings when the Dangote Refinery and Petrochemical Plant is in full operations in 2022.

Emefiele disclosed this during a foreign investors meeting held in New York while answering a number of questions raised by foreign investors.

The questions comes around Nigeria‘s foreign exchange reserves, exchange rate, balance of payments and the country’s increasing foreign debts.

THE CBN GOVERNOR'S RESPONSE

When Speaking on Nigeria‘s foreign debt, Emefiele, the CBN governor said We have ensured that any of our debts due is given utmost priority, particularly foreign debts. It’s like first line charge. He then continued to say

“The minister talks to me about it and we will ensure that wherever we find the dollar we pay most of our debt before we service any obligation. That is a rule if it is Nigeria automatic sovereign debt.”

The CBN Governor also stated that the commencement of the Dangote refinery will be a great saver of foreign exchange for Nigeria, while also highlighted that Nigerians will benefit greatly from the project.

Emefiele said, The Dangote refinery once it begins production would be a major FX saving source for Nigeria. Because Right now, the overall forex we spend on imported items, the importation of petroleum products consumes close to 30 percent (by the time you add diesel, aviation fuel, petrol and the rest of that).

He further describes that “The Dangote Refinery has the capacity to produce 650,000 barrels per day. There is a domestic component that is about 455,000 barrels. Even if the 455,000 is what is sold to Dangote in naira alone, it is going to be major forex saving for Nigeria. And If you look at the cost of freight alone, it is a major saving for Nigeria. That is because if we have to go to Europe or other parts of the world to bring in petroleum products where Nigeria pay heavily in freight and in stocking those products in the high sea before we offload them, Nigerians would benefit a lot from the Dangote Refinery.”

“That project is one of Nigerias backward integration programmes and we are very proud it is coming to light and indeed we know that refineries abroad are already scared because they know the market they will lose because Nigerians will prefer to patronize that than foreign imported refined products where we will save [on] transportation and logistics,”

The central bank governor also said that Nigeria could save close to 40% of foreign exchange imports through a combination of the Dangote refinery and a petrochemical plant that will be launched in June-July 2022. He added that when the project commences full operations, the currency would be floated and it would cease depreciation.