Good news as report predicts more dollar, list source after Dangote begins petrol production

• Nigeria's current account balance is predicted to show a bigger $6.96 billion surplus this year according to CBN data
• This year's current account position will be greater than the $5.31 billion amount from the prior year
• According to the report, OPEC+'s production cuts are likely to result in increased export income

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

This year, Nigeria's current account position is expected to record a larger surplus of $6.96 billion, according to a macroeconomic analysis released by the research department of the Central Bank of Nigeria (CBN).

The opening of the Dangote Refinery is expected to increase export revenue and decrease petroleum product imports. Photo Credit: CBN
Source: Getty Images

A record of Nigeria's foreign dealings with the rest of the world is kept in the current account balance of payments.

The current account position for this year will surpass the $5.31 billion figure from the previous year. Increased remittances from the diaspora and a persistent trade surplus from strong export performance will fuel the current account balance boom.

The research states that higher export revenues are expected as a result of the supply cuts by OPEC+, the continued tensions in the Middle East, and the expected increase in local production of gas and crude oil.

Dangote refinery to boost export

Furthermore, it is anticipated that the Dangote Refinery's opening will boost export earnings and decrease imports of petroleum products.

“Import in 2024 is expected to decrease to $46.11 billion from $49.68 billion in 2023, primarily, due to a decline in oil imports. The continued implementation of the Petroleum Industry Act 2021 (PIA), and operations of the Dangote and Port Harcourt refineries, are anticipated to reduce oil imports. However, a slight increase in non-oil imports is expected, due to anticipated improvement in global and domestic economic conditions,” the apex bank said.

The analysis projects that the continuous expansion in both oil and non-oil exports will cause exports to increase to $55.21 billion in 2024 from $54.53 billion in 2023.

“Anticipated increase in domestic crude oil production owing to enhanced security of oil installations, is expected to boost export receipts. The improvement in export would be reinforced by the operations of the Dangote refinery and potential oil price increase amid geo-political tensions and OPEC+ supply cuts,” it added.

The Nation reported that high global commodities prices and government programs (such the "Export 774" Program) to broaden the export base will increase overall export in the non-oil industry.

Additionally, it is anticipated that non-oil export would be driven by increased revenue from the export of important commodities like urea, fertilizer, sesame seeds, cocoa beans, hibiscus flowers, and cashew nuts.

The services account deficit is predicted to decrease somewhat to $12.85 billion from $12.92 billion as a result of increased costs and a depreciating naira, which may limit expenditure, particularly on travel, transportation, and business services.

According to the research, in 2023, the primary income account deficit is expected to increase from US$8.46 billion to US$9.36 billion. This result is predicated on the expected rise in returns on foreign investors' investments upon repatriation.

Furthermore, projections for diaspora remittances suggest a little rise to $19.42 billion in 2023 from $19.17 billion.

This is because the foreign exchange market has undergone reforms that enable International Money Transfer Operators (IMTOs) to pay beneficiaries at exchange rates set by the market and because improvements in the global economy are anticipated.

Dangote refinery speaks on colour of petrol

Legit.ng reported that the Dangote Refinery has finally fulfilled its promise of releasing petrol into the Nigerian market.

The 650,000 bpd-capacity refinery launched the petrol into the Nigerian market on Tuesday, September 3, 2024, amid high expectations from Nigerians suffering from acute scarcity in the past month.

The rollout of Dangote is a milestone for Africa’s largest oil producer, which has not produced petrol in the last 28 years.

Source: Legit.ng