Over 75% of the 1.9 billion barrels of crude oil produced in Nigeria and other African countries in 2024, equivalent to 1.4 billion barrels, was exported to Europe and other continents, leaving local refineries starved of crude and exacerbating the rising energy poverty on the continent. This alarming trend has been exacerbated by a growing inefficiency in refining and distribution infrastructure, which has severely hampered the potential of local refineries across Africa.
The findings were disclosed at the annual conference of the African Refiners and Distributors Association (ARDA) held in Cape Town, South Africa, under the theme “Africa First: Delivering Our Energy Future”. Stakeholders highlighted that the continent’s inability to fully utilise its refining capacity is contributing to the inefficiency in local production. They pointed to refineries such as the 650,000 bpd Dangote Refinery, the 60,000 bpd Port Harcourt Refinery, and the 75,000 bpd Warri Refinery, all of which have struggled to achieve optimal production levels. Despite the commissioning of these refineries in recent years, these facilities continue to operate below capacity, with a growing impact on the local market.
According to reports from the conference, Africa spent $30 billion on petroleum product imports in 2024, despite producing over five million barrels of oil per day. This heavy reliance on foreign imports has resulted in a significant $45 billion loss in investment, coupled with $86 billion in foregone government revenues. These figures underscore the continent’s inability to leverage its own energy resources to drive economic development.
Afreximbank Pushes for Change
Kanayo Awani, Executive Vice President of Afreximbank, spoke passionately about Africa’s need to prioritize its own energy resources to achieve energy security and economic independence. She noted that the continent currently exports 80% of its crude oil and 45% of its natural gas, yet still faces the crippling problem of energy poverty.
“Africa must take control of its energy future,” Awani said, emphasizing the importance of local refining capacity and intra-African trade. Afreximbank is committed to addressing this imbalance, with investments of over $4 billion in projects such as the Dangote Refinery and the redevelopment of the Port Harcourt Refinery. The bank is also involved in a $3 billion trade financing programme aimed at boosting intra-African petroleum product trade.
Anibor Kragha, Executive Secretary of ARDA, reiterated the urgent need for more investment in Africa’s downstream oil and gas sector to match the continent’s growing upstream production. He highlighted that while African countries continue to increase crude production, refining capacity remains stagnant, leaving the continent vulnerable to supply disruptions.
“If imports stopped for just 30 days, much of Sub-Saharan Africa would grind to a halt,” Kragha warned, stressing the need for expanded refining, regional pipelines, and energy infrastructure to reduce dependence on foreign imports.
The lack of proper refining and storage facilities was also a concern raised by NJ Ayuk, Chairman of the African Energy Chamber (AEC). Ayuk described the state of Africa’s energy infrastructure as deplorable, with many refineries operating far below capacity, pipelines rusting or being sabotaged, and insufficient storage capacity. He estimated a $15.7 billion shortfall in energy infrastructure funding across the continent.
“Africa must focus on refining its own resources,” Ayuk said, urging the continent to adopt policies that foster local content development and energy security. He also criticized the reliance on carbon credit schemes, calling them a “scam,” and stressed that natural gas could be key to solving Africa’s energy challenges.
APPO President, Omar Farouk, joined the chorus of voices calling for a change in Africa’s energy policies, criticizing decades of externally dictated energy decisions. He urged African nations to take control of their financing, technology, and energy markets, arguing that the time for Africa to be exploited for its natural resources is over.
“Now, we must take control of our financing, technology, and markets,” Farouk said, as he pushed for a shift towards locally-driven solutions for Africa’s energy future.
The call for greater investment in local refineries and the prioritization of African energy resources is a crucial step in reversing the continent’s reliance on imports and addressing its ongoing energy poverty. However, as stakeholders have highlighted, achieving energy security in Africa will require significant infrastructure investment, political will, and long-term commitment to local capacity building.
