Nigeria’s economic recovery is gaining momentum, with S&P Global Ratings crediting the Dangote Petroleum Refinery & Petrochemicals as a key driver behind the country’s improved sovereign credit outlook.
In its latest assessment, S&P upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings to “B” from “B-”.
The agency pointed to stronger economic growth, rising oil production, improved external balances, and expanded domestic refining capacity as central to the upgrade.
At the heart of this shift is the 650,000 barrels per day Dangote Refinery, now operating near full capacity.
According to S&P, the refinery is strengthening Nigeria’s balance of payments, reducing reliance on imported fuel, and boosting foreign exchange liquidity.
“Significant refining capacity is now also online; Dangote Industries Ltd.’s large-scale refinery and petrochemical complex has ramped up to near its maximum capacity of 650,000 barrels per day,” S&P stated.
The agency projects Nigeria’s current account surplus will rise to 5.8% of GDP in 2026, up from 4.8% in 2025.
Increased domestic refining and hydrocarbon exports are expected to drive much of that growth.
Beyond fuel supply, the refinery is helping stabilise Nigeria’s energy security amid global disruptions linked to Middle East tensions.
It’s also supporting domestic availability of gas and fertilizer.
S&P noted that Nigeria’s external position has improved thanks to three major shifts: removal of fuel subsidies, exchange rate liberalisation, and higher oil output.
Foreign exchange reserves jumped from about $33 billion in 2023 to nearly $50 billion by early 2026, partly due to lower demand for imported refined products.
The report also highlighted Nigeria’s transition from a crude oil exporter to an emerging producer of refined petroleum products.
Dangote Industries has already announced feasibility studies to expand capacity to 1.4 million barrels per day, up from the current 650,000 bpd.
Alongside rehabilitation of other local refineries, S&P said the expansion could further strengthen Nigeria’s economy and balance of payments in coming years.
While global crude prices still influence domestic fuel costs, S&P emphasised that local refining capacity reduces Nigeria’s exposure to external supply shocks and improves energy security.
The upgrade also reflects broader reforms since 2023, including exchange rate liberalisation, fiscal adjustments, higher petroleum revenue remittances, and improved security in the Niger Delta.
S&P expects firm economic growth ahead, supported by investor confidence and non-oil sector expansion.
The agency maintained a stable outlook, balancing Nigeria’s improving external position against structural challenges like a narrow tax base, high inflation, and low formal employment.
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