On the outskirts of Abuja, traffic slows into a dense ribbon of vehicles as workers and businesses head toward the city centre. Captured from above in 2024, the scene is a reminder of how deeply fuel powers daily economic life in Nigeria.

The endless stream of petrol-powered cars also reflects the country’s continuing dependence on hydrocarbons even as policymakers push reforms to stabilise the economy.

This week, that dependence came into sharper focus. Rising fuel costs linked to global tensions and renewed inflationary pressure have started weighing on business activity, with Nigeria’s private sector slipping into contraction in April after more than a year of expansion.

While at it, the country is doubling down on efforts to strengthen its energy and industrial backbone. NNPC is seeking Chinese partners to revive aging refineries in Warri and Port Harcourt, while foreign advisory firms are expanding into Nigeria ahead of expected opportunities tied to tax reforms and AfCFTA trade integration.

Today’s brief tracks how infrastructure, energy and capital, as well as accompanying pressures, continue to shape the direction of Africa’s most populous economy.

Nigeria’s state oil company signed a memorandum of understanding with two Chinese firms to revive and expand its moribund Warri and Port Harcourt refineries, as part of renewed efforts to bolster fuel supply and energy security in Africa’s most populous country.

NNPC Ltd said the agreement was signed with Sanjiang Chemical Company, China’s largest privately-owned producer of ethylene oxide and surfactants, and Xinganchen (Fuzhou) Industrial Park Operation and Management Co. Ltd, a specialist in managing large industrial zones and infrastructure projects. The deal was signed at a ceremony in Jiaxing, China.

The non-binding agreement outlines a potential technical equity partnership covering refinery rehabilitation, operations and maintenance, cleaner fuel upgrades and expanded petrochemical output.

Sanjiang brings petrochemical know-how, while Xinganchen is expected to provide operational discipline and industrial hub development.

Nigeria’s ageing refineries, commissioned between the 1960s and 1980s, have been operating below capacity since the early1990s. At full capacity, Port Harcourt (new and old) can process 210,000 barrels a day, Warri handles 125,000, while Kaduna handles 110,000.

But years of poor maintenance, pipeline vandalism, and crude shortages formed part of challenges that left them moribund. In some instances, the plants, according to local media reports, recorded zero production while still incurring maintenance costs.

The failures forced Africa’s top oil producer to spend more than $10 billion annually on fuel imports before the subsidies were removed in 2023. In February this year, NNPC Chief Executive Officer Bayo Ojulari, appointed in April 2025, admitted the refineries had been shut because they were operating at “monumental losses” and destroying value.

The private-owned Dangote Refinery, which began operations in 2024 with a capacity of 650,000 barrels a day, has eased some pressure on fuel imports.

But Warri and Port Harcourt remain strategic assets for domestic supply and potential regional exports. Their rehabilitation is therefore not just about reducing import dependence, but about positioning Nigeria as a refining hub in West Africa.

The latest MoU seeks to unlock that value. Ojulari called it a “significant milestone” after months of talks.

Plans also includes building gas-based industrial hubs near the refineries. These hubs would use Nigeria’s gas to make fertilizer, plastics, and chemicals. Sanjiang and Xinganchen’s expertise are expected to become key here.

But not everyone is buying it. The Centre for Energy Sector Transparency said past repair efforts cost enormous amount with little to show. “It is unacceptable that after committing over one billion dollars to refinery rehabilitation, the nation is being asked to embrace another agreement without a clear verifiable audit of previous interventions,” said its executive director, Oghenetega Edafe.

The oil workers’ union NUPENG said the deal could restore trust in Nigeria’s refining capacity. But it warned against repeating past mistakes.

China’s role shows its growing influence in African energy, which aligns with its Belt and Road plan. If the deal works, Nigeria can further cut fuel imports, bolster local refining and boost energy security efforts.

Italian energy major Eni confirmed it is seeking buyers for its 5% stake in the Renaissance Joint Venture, formerly Shell's onshore SPDC JV.

The divestment shows a broader trend of international oil companies reducing onshore exposure in Nigeria while local and regional operators expand their footprint. Multiple bids have reportedly been submitted by Nigerian and foreign firms.

Nigeria's private sector slipped into contraction in April 2026, ending more than a year of sustained expansion, according to the Central Bank of Nigeria.

The CBN's Composite Purchasing Managers' Index fell to 49.4 from 53.2 in March, dropping below the 50-point threshold that separates growth from contraction.

The bank attributed the decline to rising fuel costs and renewed inflationary pressures linked to ongoing conflicts abroad, which increased input and transport expenses for businesses. 

U.S.-headquartered Andersen Group has acquired a tax and a consulting firm in Nigeria as part of a broader global expansion drive tied to rising demand for cross-border advisory services.

The move comes as Nigeria’s new unified tax code, effective 2026, begins to take hold, replacing fragmented tax laws with a consolidated framework under the Nigeria Revenue Service.

The acquisitions position Andersen for opportunities linked to the African Continental Free Trade Area, as well as Nigeria’s consulting and advisory market projected to exceed $2 billion in 2031.

234Digest tracks capital flows, infrastructure and policy signals shaping Nigeria’s evolving economic story.

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