Financial and energy experts have said billionaire investor Femi Otedola’s projection that the naira could appreciate to below N1,000 per dollar is achievable, but only if Nigeria sustains higher crude oil production and enforces disciplined fiscal and monetary policies.
The analysts, reacting to Otedola’s optimism following the Dangote Refinery’s attainment of full operational capacity, noted that while large-scale domestic refining could significantly reduce foreign exchange demand, broader macroeconomic coordination and improved investor confidence will ultimately determine the strength and stability of the local currency.
An Energy Expert, Idris Yusuf in a chat said that Otedola’s projection is ambitious but not entirely implausible.
He noted noted that Nigeria’s annual fuel import bill has historically consumed billions of dollars in foreign exchange, exerting structural pressure on the naira.
“If the Dangote Refinery consistently operates at full capacity and meaningfully displaces imports of Premium Motor Spirit and other refined products, the reduction in FX demand could be substantial,” he said.
However, Yusuf cautioned that currency appreciation to below N1,000/$ would require more than import substitution. “Foreign exchange stability depends on both demand and supply.
While refining reduces demand for dollars, Nigeria must also raise crude oil output, improve non-oil exports, and sustain investor confidence to materially strengthen the naira.”
He described the refinery as a critical structural reform in industrial form but stressed that macroeconomic coordination will determine how far the currency can rebound.
Group Managing Director, Crane Securities Limited Mr. Mike Eze said the psychological impact of the refinery’s full operations could be as important as the direct FX savings.
“Markets trade on expectations,” Eze explained. “If investors believe that Nigeria’s fuel import burden is permanently shrinking, that alone can improve sentiment, attract portfolio flows, and reduce speculative pressure on the naira.”
He added that the additional $12bn expansion and petrochemical integration significantly strengthen the long-term case. “Producing polypropylene and LAB locally reduces industrial imports, which deepens the structural FX benefit beyond petrol alone. This could gradually improve Nigeria’s balance of payments position.”
Eze also warned that currency levels are influenced by global oil prices and capital flows. “A sub-N1,000 rate is possible, but it will likely require a combination of sustained refinery output, strong crude prices, disciplined fiscal management, and tight monetary policy.”
An economist, Mr. Dele Johnson described the refinery milestone as one of the most significant industrial shifts in Nigeria’s post-independence economic history, but urged caution against overestimating short-term currency gains.
“Import substitution reduces FX demand, but the naira’s weakness has also been driven by structural issues such as low productivity, weak export diversification, and policy inconsistencies,” he said.
Johnson argued that while the refinery may conserve foreign exchange, the ultimate impact on the naira will depend on whether savings translate into stronger external reserves and improved fiscal buffers. “If the government continues to monetise deficits or if oil production remains below OPEC quotas due to theft and underinvestment, the FX benefit could be diluted.”
He noted that the refinery’s greatest contribution may be long-term structural transformation rather than immediate currency appreciation. “The real story is industrialisation and value addition. A stronger naira would be a welcome by-product, but it won’t happen automatically.”
