The Central Bank of Nigeria (CBN) has projected that the lifting of refined petroleum products from the Dangote Refinery will lower transportation costs, curb inflation, and strengthen the country’s foreign reserves.
CBN Governor, Yemi Cardoso, made this statement during a press briefing following the 297th Monetary Policy Committee (MPC) Meeting held at the CBN headquarters in Abuja on Tuesday.
Cardoso explained that the refinery’s local production of refined petroleum products will reduce the demand for foreign exchange, positively impacting Nigeria’s external reserves and overall balance of payments.
“The Committee also expressed optimism that the lifting of refined petroleum products from Dangote refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term.
“This is also expected to moderate foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position,” Cardoso said.
The CBN Governor further highlighted the positive outlook for Nigeria’s external reserves, noting that the reserves stood at US$39.07 billion as of September 19, 2024, a 17.4% increase from the US$33.28 billion recorded in the same period of 2023. This current reserve level provides 8 months of import cover for goods and services, and 13 months for goods alone.
With the ongoing lifting of refined products from the Dangote Refinery, as projected during the MPC meeting, the Central Bank expects the external reserves to strengthen further in the coming months, contributing to more sustainable foreign exchange management and economic stability.
