The World Bank has commended the management of the Dangote Group for the foresight it demonstrated in investing in the 650, 000 barrels per day Refinery, which, according to him, has protected Nigeria against global energy deficiencies from ongoing unrest in the Middle East.
World Bank President Ajay Banga told Reuters in an interview on Friday that Nigeria, which had long faced problems, stood to benefit from a $20 billion investment made by the Dangote Group in refineries, which had actually increased output during the war, and was now supplying aviation fuel to neighboring countries.
“Nigeria should be breathing a sigh of relief. They’ve built up the ability to have energy security for themselves through that huge investment,” he said. “It’s actually a really good example of the right thing being done in terms of energy self-sufficiency for them, but also for their neighbours.”
According to him, the war in the Middle East will have a cascading impact on the global economy, even if a ceasefire announced by U.S. President Donald Trump takes hold.
And the damage will be far more serious if the ceasefire fails and the conflict escalates, he said.
US Vice President JD Vance landed in Pakistan’s capital on Saturday ahead of negotiations with Iran aimed at ending the war.
Banga on Tuesday said global growth could be lowered by 0.3 to 0.4 percentage points in a baseline scenario, with an early end to the war, and by as much as 1 percentage point if it endures.
Inflation could increase by 200 to 300 basis points, with a much higher impact – of up to 0.9 percentage point – if the war continues, he said.
The World Bank’s baseline estimate now projects growth in emerging markets and developing economies of 3.65% in 2026, compared to 4% in October, dropping as low as 2.6% in an adverse scenario with a longer-lasting war.
Inflation in those countries was now forecast to hit 4.9% in 2026, up from the previous estimate of 3%. The extreme scenario could see inflation rising as high as 6.7%, according to estimates by Reuters.
The war, which has killed thousands of people across the Middle East, has sent the price of oil up by 50% while disrupting supplies of oil, gas, fertiliser, helium, and other goods, as well as tourism and air travel.
The two-week ceasefire announced by Trump appears tenuous, with Israel and Iran continuing strikes. Iran said on Friday that blocked Iranian assets must be released and a ceasefire must take hold in Lebanon before U.S.-Iran talks, scheduled for Saturday in Pakistan, can proceed. Trump said that U.S. warships were being reloaded with ammunition in case the talks failed.
“The question really is, does this current peace and the negotiations that are going to be happening this weekend – will this lead to a lasting peace and then a reopening of the Strait (of Hormuz)?” said Banga. “If it doesn’t lead to that, and if conflict were to break out again, would that have an even larger impact, or longer-term impact on energy infrastructure?”
Banga said the world’s largest development bank was already in discussions with some developing countries, including small island states with no natural energy resources, about tapping funds from existing programs under “crisis response windows.”
And if it doesn’t, we’ll be able to finish it off, one way or the other.
The World Bank’s crisis toolkit allows countries to tap previously approved but not yet disbursed funds without additional board approvals, increasing flexibility.
But Banga said the bank was cautioning countries to avoid setting up energy subsidies that they could not afford, which would trigger even bigger problems in the future.
“I worry about making sure that they can come through this crisis, targeting what they need to do, but not doing anything that further deteriorates that fiscal space,” he said.
Many developing countries also have high debt levels, and interest rates remain high, which constrains their ability to borrow money to fund measures to respond to the jump in energy costs and other goods caused by the war.
The crisis has put a fresh spotlight on the need for countries to diversify energy supplies and boost self-sufficiency, Banga said.
The World Bank last June ended a longstanding ban on funding nuclear energy projects as part of a push to meet rising electricity needs.
