Analysis in brief: African nations are focused on a goal of energy self-sufficiency, striving to achieve this task with government policies and enthusiastic private investment. Inefficiencies in existing oil refining operations are also being addressed to ensure nations’ energy security as new large-scale projects go online or are announced with increasing frequency.

Africa’s oil refining industry is characterised by a mix of established facilities and new projects of unprecedented scale. While Nigeria leads in new refinery investment, South Africa has an established and sizeable refinery capacity to build on, the largest being ENREF and Sapref’s refineries in Durban. Like other African countries, South Africa is expanding its refining capacity by rehabilitating older facilities, not exclusively building new ones.

Neighbouring Angola, which extracted 1.13-million barrels of crude oil per day in 2024, is also investing in its refining capacity, most notably the major facility planned for Lobito, designed to process 200 000 barrels of crude oil per day. This is half of Angolans’ daily consumption of 440 000 barrels per day (bpd) and can be added to the output of Angola’s other oil refinery in Luanda, which produces 65 000 bpd. The country aims to be a major refining hub by 2030.

Algeria and Egypt in North Africa, Ghana in West Africa and Sudan in East Africa also operate oil refineries. All of these countries are planning additional facilities to boost their oil refining capacities.

Pitfalls inhibiting refining progress

The principal question that arises when contemplating why Africa has waited so long to aim for energy self-sufficiency is ‘Why’, when the continent is a major producer of crude oil, so why then must its nations be dependent upon foreign oil, with the price of processed fuels constantly fluctuating and subject to political developments overseas?

The answers lie in the same inertia that made African leaders complacent with the guaranteed profits from the sale of raw minerals. These easy returns were prioritised over the far more demanding task of developing an industrial sector capable of turning local natural resources into value-added products. However, as economic policies have become more enlightened, and African populations have come to realise that their resources are not bringing to them the wealth these warrant, changes in attitudes toward natural resources has evolved. Oil is a prime example: For decades, Nigerians have lamented that they cannot purchase locally made petrol, despite their country being Africa’s leading oil producer and the world’s 16th biggest oil producer.

African oil production has its own challenges, aside from the task involved in growing the refining sector. Nigeria’s average oil production of 1.55-million bpd failed to meet the quota of the Organization of Petroleum Exporting Countries, in which Nigeria is a member, of 1.78-million bpd. OPEC member states are obliged to meet this quota so that other producing countries do not have to make up for shortfalls. Nigeria’s production drop was attributed to pipeline vandalism, oil theft and the illegal refining of crude.

Just as these problems need to be addressed, Africa’s already existing refining capacity requires some refining itself to become more efficient and productive. Many facilities operate below their full potential. The African Union’s African Energy Commission has determined that African oil refinery utilisation rates are below the global average. Poor transportation infrastructure inhibits maximum movement of refined products out of refineries. In some African countries, erratic power supplies also negatively affect refinery operations.

Then there is the common malady that influences many African projects: inadequate maintenance. Government infrastructure and energy projects often receive enthusiastic budget allocations for new initiatives, which are celebrated at completion and gain favourable media coverage at ribbon-cutting ceremonies. However, the same officials do not budget the necessary funds to maintain roads, bridges and refineries, whose value is invisible and has no public relations worth.

Another reason for failing maintenance is that refineries are expected to earn sufficient profit to maintain themselves. However, these profits may be channelled by the officials who control them to other purposes. Inefficient refinery operations can be attributed to various causes, from a lack of proper training to staff who were employed through nepotism. Inefficient operations have reportedly been blamed on temporary disruptions in the production of product and sometimes lead to complete shutdowns of facilities.

However, considering everything, these challenges are overcome by new reasons for refinery investment. African nations’ goals of energy self-sufficiency might have seemed unrealistic at the start of the 21st century but are now more plausible when seen as a regional undertaking. The African Continental Free Trade Area (AfCFTA) has 54 member states committed to inter-regional trade in energy products. Algeria’s refined oil can be more readily sold to Chad as cross-border trade restrictions disappear under the AfCFTA.

Investments in refinery indicate confidence in African markets

From Nigeria to Zambia, the birth of an oil refinery industry is predicated on the existence of local buyers. This demonstration of confidence has led Zambia’s state-owned Industrial Development Corporation to commit a massive US$1.1-billion in a new energy complex in Ndola in its northern copper-producing area. The complex’s key feature is a refinery designed to process 60 000 barrels of crude oil per day. When achieved, beginning in 2026, this output will be enough to meet Zambia’s domestic fuel needs and allow export to neighbouring countries like Botswana, the Democratic Republic of Congo and Zimbabwe.

Nigeria leads Africa in crude oil production and has the greatest number of oil refineries. These include refiners in Kaduna and Port Harcourt, the Warri Refinery and, the largest of them all, the new Dangote Refinery. In operation in Lekki for two years, the Dangote Refinery has achieved an output of 650 000 bpd. The refinery was designed to reshape the regional market by significantly reducing fuel imports not only in Nigeria, where daily consumption of petroleum products is estimated variously to be from 208 000 bpd to 368 000 bpd (half of Dangote’s capacity), but also in West Africa.

An increase in production has been announced for the Dangote Refinery. By the end of 2025, 700 000 bpd will be flowing out of the facility. What is noteworthy is that this is being achieved by addressing the inefficiencies and obstacles that have hobbled production at many of Africa’s other oil refineries. Improving efficiencies by reforming bottlenecking, for instance, are in the pipeline, figuratively speaking, which begin by optimising existing equipment and improving logistics by road, rail and sea. Other African refineries and planners of new African refineries will be observing Dangote’s efforts and taking notes as progress continues in the expansion of Africa’s oil refining capacity on a continental scale.

The critical points:

• African nations are serious about achieving energy independence by expanding the continent’s ability to refine Africa’s own crude oil into petroleum products, with major refineries going online or in development
• Nigeria leads Africa’s oil refining capacity, while newcomers like Angola and Zambia are building their first major oil refining operations
• Cross-border trade through the AfCFTA has made energy dependence achievable by facilitating oil trade between African countries and providing customers for new refineries

Written by In On Africa