Unlocking Refining Potential
The AFC report underscores that if fully utilized, the continent's refining capacity could meet up to 90% of its fuel demand. To unlock this substantial potential, the AFC identifies two crucial and complementary investment pathways.
Firstly, "brownfield upgrades" are essential, requiring over $16 billion to modernize existing refineries. This investment is vital for meeting stringent clean fuel standards and reducing Africa's reliance on imported petroleum products. Secondly, "greenfield investment" is highlighted as key to addressing future demand, with Nigeria and Angola emerging as new continental hubs for refining.
Dangote Refinery: A Game-Changer for Energy Security
Central to achieving this vision of energy security is Nigeria's state-of-the-art Dangote Refinery. With an impressive processing capacity of 650,000 barrels per day, the facility is poised to significantly transform Africa's fuel security landscape.
Historically, Africa's refining industry has been heavily dependent on imports of petroleum products, which are often subsidized in several countries. The AFC report notes that in 2023, 55% of Africa’s demand for petroleum products was met by imports. However, the report posits that if refining capacity were fully utilized, this number could drastically drop to only 10%.
The commissioning of the Dangote Refinery in May 2023, coupled with the gradual re-opening of Nigeria's Port Harcourt and Warri Refineries (expected between 2024-2026), holds immense promise for transforming the continent’s fuel security in the short term.
Addressing Challenges and Future Investments
The AFC report emphasizes that the growth of Africa's refining sector is intricately linked to several critical factors. These include the modernization of existing refineries, particularly in West and Central Africa, overcoming persistent feedstock and financing challenges for new projects, and resolving crucial infrastructure bottlenecks in transportation and distribution networks.
To achieve long-term fuel security and meet the continent’s increasing energy demand, the AFC advises that Africa must prioritize investment in refinery upgrades and develop highly efficient distribution systems. This includes robust pipelines, improved railway networks, and diversified port infrastructure. The corporation also stresses the importance of building new energy infrastructure that is resilient and capable of supporting future energy transitions, asserting that the successful integration of these elements will be vital for achieving long-term fuel security and energy independence across the continent.
Presidential Commendation for Dangote Refinery
Nigerian President Bola Ahmed Tinubu recently lauded the Dangote Petroleum Refinery, describing it as a "great point of reference, a great phenomenon of our time, and a massive investment." The President highlighted the refinery's significance in showcasing Nigeria’s capacity for industrial greatness and economic transformation, extending his gratitude to Alhaji Aliko Dangote for his continuous investments and commitment to the country's development.