11 April 2015, Lagos – The scheduled completion and take-off in 2017 of a major oil refinery under construction by the Dangote Goup, will boost Nigeria’s economic fortunes in the medium to long term, a former deputy governor of the Central Bank of Nigeria (CBN), Dr. Kingsley Moghalu, has said.
Moghalu said the President elect, Muhammadu Buhari must have to come up with solutions to tackle an oil-lubricated economy, traumatised by a sharp decline in the price of crude oil, which makes up over 80 percent of the country’s revenues.
“The Dangote oil refinery will refine 650,000 barrels of oil per day, cutting Nigeria’s refined petroleum products import bill by 50 percent. This will lower pressure on the naira caused by the constant need for producers of petroleum derivatives and other importers to purchase large amounts of dollars. Local refining will reduce the need for foreign exchange,” he said.
Moghalu was speaking on building an industrial structure in Africa’s largest economy on Thursday, said the Dangote’s refinery and its by-products will mark a structural shift towards an effective industrial manufacturing economy. This is besides the general positive impact on monetary policy.
The financial expert said the Buhari-led government must restructure a federation where most resources and instruments of power rest at the centre in Abuja, leaving many states dissatisfied and feeble.
He noted that the problems of Federal Government spending priorities that are focused more on recurrent expenditure to finance a bloated governance apparatus than capital investments for real economic transformation, have led to the naira falling heavily, the result of lower oil revenues and the absence of fiscal savings that could have acted as a buffer against exogenous commodity shocks.
*Sylvester Enoghase – Daily Independent