Africa Pushes Refining Expansion to Retain Oil Value, Spur Growth
By SAMUEL MOBOLAJI
Africa is intensifying efforts to expand refining capacity, strengthen regional trade and upgrade energy infrastructure as part of a drive to capture greater value from its vast oil resources and reduce dependence on imported refined products.
Despite its central role in global oil markets, the continent continues to export large volumes of crude oil to Europe, Asia and the Americas while importing significant quantities of gasoline, gasoil and jet fuel.
According to the African Energy Chamber’s State of African Energy 2026 Outlook, this imbalance remains one of the most costly features of Africa’s energy landscape, shaping investment priorities, infrastructure development and long-term energy security.
West and North Africa host some of the continent’s largest producers, including Nigeria, Angola, Libya, Algeria and Egypt. Yet limited domestic refining capacity has constrained industrialisation and job creation, forcing many countries to export low-value crude and import higher-value refined products.
The Chamber notes that this gap presents major opportunities for investment in large-scale modern refineries.
Projects such as Nigeria’s 650,000 bpd Dangote Refinery, alongside planned upgrades and new facilities in Angola, Egypt and South Africa, are expected to gradually ease trade imbalances and help retain more economic value within Africa. Even so, the Outlook projects that the continent will remain short of key products such as gasoline and gasoil throughout the forecast period.
By 2050, net imports of gasoil could approach 1.8 million barrels per day, while gasoline imports may exceed 1.5 million barrels per day. Residual fuel oil production is expected to broadly match domestic consumption, while naphtha is projected to maintain a modest net surplus.
Regional trade is emerging as another pathway to value retention. Most African countries still trade energy products with markets outside the continent rather than with neighbouring states. The African Continental Free Trade Area (AfCFTA) offers a framework to expand intra-African energy trade by harmonising regulations, improving cross-border distribution and building economies of scale.
Analysts say this could enhance supply resilience, create jobs and support broader industrial growth.
Reducing reliance on imported refined products would also ease pressure on foreign exchange reserves and improve fiscal stability. Expanding domestic refining, storage and distribution infrastructure allows African economies to retain more value, strengthen energy security and reduce exposure to global supply disruptions, as highlighted during the COVID-19 pandemic and the Suez Canal blockage.
Infrastructure constraints remain a major challenge but also a significant investment opportunity. Key ports in East Africa, including Beira, Dar es Salaam and Mombasa, continue to face congestion, while limited pipeline networks force heavy reliance on costly road transport. Net refined product imports are projected to rise from about 2 million barrels per day to 3.4 million barrels per day by 2050, underlining opportunities across refining, storage, distribution and logistics.
Beyond hydrocarbons, Africa’s broader energy transition agenda also presents opportunities for diversification. Integrating cleaner technologies with more efficient oil markets can enhance energy security while supporting industrialisation and long-term growth.
“Africa produces the oil the world needs, but too much of the value still leaves the continent,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “By investing in refining capacity, modern infrastructure and regional cooperation, Africa can transform its oil trade, strengthen energy security and ensure hydrocarbons drive industrialisation and economic growth for decades.”
Related to this topic:
