AFC Warns of Rising Import Bill as Africa Faces Energy, Fertiliser and Infrastructure Gaps
A fresh warning over Africa’s heavy reliance on imported refined fuel and essential commodities has reignited debate about the continent’s industrial future, with policymakers and business leaders urging accelerated investment in local production capacity.
According to a report presented by the African Finance Corporation (AFC) at a summit in Nairobi, Africa continues to import more than 70 percent of its refined fuel needs, alongside an estimated $230 billion annually in essential goods such as food, plastics, steel, and fertiliser. The scale of these imports underscores a structural dependence that many leaders say is increasingly unsustainable.
The report further projects that Africa’s fuel import requirement will rise from about 74 million tonnes in 2023 to 86 million tonnes by 2040, reflecting growing energy demand across the continent. That projected gap is roughly equivalent to the output of nearly three large-scale refineries of the type already operating in Nigeria.
Dangote signals East Africa refinery expansion
One of the most significant announcements at the summit came from industrialist Aliko Dangote, who indicated readiness to replicate his Nigerian refining model in East Africa if supported by regional governments.
Addressing leaders including William Ruto of Kenya and Yoweri Museveni of Uganda, Dangote pledged a large-scale investment commitment.
“If they will support the refinery, we’ll build the identical one that we have in Nigeria — 650,000 barrels,” he said, referring to his massive Lagos-based complex, currently the largest refinery in Africa.
The proposed project is being viewed as a potential turning point for East Africa, where countries remain highly exposed to fluctuations in global oil markets and supply chain disruptions.
Energy security concerns sharpen after global disruptions
Recent geopolitical tensions, particularly conflicts affecting Middle Eastern shipping routes such as the Strait of Hormuz, have highlighted Africa’s vulnerability to external supply shocks. The disruptions have reverberated across East African economies, where fuel imports are critical for transport, manufacturing, and agriculture.
Leaders at the summit argued that such instability reinforces the urgency of developing domestic refining capacity and reducing reliance on imported finished petroleum products.
President Ruto stressed that Africa’s development ambitions are constrained by external dependence, particularly in finance and industrial inputs.
“Our ambitions will remain unrealised if we continue to depend on external capital whose primary interest is securing raw materials for their own industries,” he said. “We cannot continue to export raw materials and import finished products made from them.”
Structural gaps in infrastructure and energy systems
Alongside refining capacity, the AFC report emphasized deeper structural weaknesses in Africa’s energy and infrastructure systems. It called for the development of new industrial hubs and improved efficiency in existing energy assets to close supply gaps.
The corporation’s chief economist, Rita Babihuga-Nsanze, pointed to inefficiencies in power generation and distribution across several countries. She cited cases such as hydropower facilities in Zambia that were not designed for shifting climate conditions, as well as approximately two gigawatts of hydropower capacity in Angola that remains underutilised due to weak regional grid connectivity.
These shortcomings, she argued, translate into lost economic potential even in regions with abundant natural resources.
Fertiliser vulnerability and missed opportunities
The report also highlighted Africa’s exposure to global fertiliser supply shocks, particularly those linked to geopolitical instability affecting Gulf producers. Despite these vulnerabilities, the continent remains structurally underleveraged in one of its most strategic natural advantages.
Africa holds roughly 80 percent of global phosphate reserves—an essential input for fertiliser production—yet accounts for only about 20 percent of global output.
Babihuga-Nsanze described this mismatch as a strategic imbalance, noting that increased local production could significantly reduce import dependence while strengthening agricultural resilience.
“There’s a real opportunity for Africa to step in the gap here,” she said, pointing to fertiliser manufacturing as a key sector for industrial expansion and food security.
A broader industrial turning point?
Across the discussions, a consistent theme emerged: Africa’s economic model remains heavily oriented toward exporting raw materials and importing finished goods. Leaders and experts at the summit suggested that reversing this pattern will require coordinated investment in infrastructure, energy, and large-scale industrial projects.
While challenges remain significant—including financing constraints, policy fragmentation, and infrastructure deficits—participants agreed that the continent’s resource base and growing demand present a strong case for deeper industrialisation.
The Nairobi summit ultimately underscored a central tension in Africa’s economic trajectory: whether continued dependence on global supply chains will persist, or whether new regional investments—such as proposed refining and fertiliser expansion—can mark a shift toward greater self-sufficiency.