Dangote refinery eased forex pressure, stabilized naira, says Afreximbank chief

The Dangote Petroleum Refinery has significantly stabilized Nigeria's naira and eased foreign exchange pressure by curbing dependence on imported fuel, according to George Elombi, President and Chairman of the Board of Directors of the African Export-Import Bank (Afreximbank).

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The crisis in the Gulf has happened; oil prices fled, but Africa didn’t lack in its refined petroleum products.

Elombi disclosed this at a media roundtable in Abuja, announcing Afreximbank's commitment of $2.5 billion towards the refinery's expansion. He emphasized the refinery's strategic importance, noting that it prevented shortages of refined petroleum products across Africa during recent Middle East tensions.

"The currency stabilized because of that," Elombi stated, referring to the reduction in fuel imports and the enablement of crude-for-naira transactions. He described the refinery as a model for other African countries, with Afreximbank supporting similar projects across the continent to bolster energy security and reduce reliance on external supplies.

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It wasn’t believed, but the currency stabilised because of that.

Beyond energy, Elombi pointed to the Pan-African Payment and Settlement System (PAPSS) as crucial for reducing foreign exchange pressure. PAPSS facilitates transactions between African countries, exemplified by a swap between Dangote Group's Ethiopian birr holdings and Ethiopian Airlines' naira balances, thus avoiding the need for scarce foreign exchange. Afreximbank views Nigeria as its most strategic market, with Dangote's operations seen as the "heartbeat of the continent."

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It’s the heartbeat of the African continent, and Dangote is demonstrating that it is indeed the heartbeat of the continent. When you stop the energy, everything comes to an end. The heart stops beating.