…Despite producing 7 million barrels a day, Africa exports crude and imports dependency
By Ese Ufuoma
Africa produces about seven million barrels of crude oil daily, yet it only refines 40 per cent of its 4.3 million barrels of daily fuel consumption. The remaining fuel is imported at an annual cost nearing $90 billion, according to Aliko Dangote at the West African Refined Fuel Conference in Abuja.This
figure highlights not only imports but also a fundamental economic mismatch. Africa exports crude oil and depends heavily on importing refined products, which could and should be produced locally. While Europe and Asia refine over 95 per cent of what they consume, the continent remains reliant on overseas refineries, exporting both jobs and value. Only about 15 per cent of African countries have GDPs exceeding $90 billion, meaning that collectively, nearly an entire economy’s worth of value is lost each year.
Dangote’s refinery demonstrates both progress and complexity. As the world’s largest single train refinery, it required a substantial investment and employed 67,000 workers, along with extensive land and port infrastructure. However, it still faces challenges such as foreign exchange volatility, a lack of affordable local crude (necessitating imports of 9-10 million barrels each month), and high port and regulatory charges.Beyond
Beyond economics, there is a quality issue. Africa is increasingly targeted with cheap, often toxic fuel blends that would not pass regulatory standards in Europe or North America. Poor harmonisation of fuel standards across the continent fragments markets, further undermining local refineries and benefiting arbitrage, particularly from offshore “floating” markets like Lomé that supply cheap fuel to West African countries.
In West Africa alone, around 69 per cent of gasoline consumed is imported, even with existing refineries in place, highlighting both underused capacity and structural dependence.
Fixing the Drain Requires a Structural Shift
Increase refining capacity: Sup-port projects like the Dangote refinery; ease access to local crude; reduce logistical and currency-related barriers.
Harmonise standards: Align fuel specifications across African nations to enable regional trade and eliminate arbitrage opportunities.
Protect refining markets: Curb dumping of substandard products, impose enforcement mechanisms, and regulate offshore markets.
Streamline infrastructure: Reduce port and regulatory costs that currently tilt economics against local production.n
In essence, Africa’s huge outflow of capital for fuel imports is both avoidable and unacceptable. It’s a structural flaw, not destiny, and addressing it involves building capacity and safeguarding it.