Keypoints:
- Africa exports 70 percent of its crude unprocessed
- Financing costs choke refinery projects
- New bank targets $200bn mobilisation by 2030
EVERY February, Abuja becomes a stage where Africa confronts its energy paradox — and this year the numbers were brutal.
At the ninth Nigerian International Energy Summit (February 1–5, 2026), Farid Ghezali, secretary general of the African Petroleum Producers’ Organisation (APPO), told delegates that Africa is effectively burning $15bn of potential wealth each year by exporting most of its crude oil in raw form.
Crude leaves African ports. Value returns elsewhere.
The figure is not an accounting quirk; it reflects a structural trap in which Africa supplies the world with raw hydrocarbons, imports finished fuel at eye-watering prices, and misses out on jobs, skills and industry that refining would normally create at home.
Ghezali said roughly 70 percent of Africa’s crude oil and 45 percent of its natural gas are shipped out unprocessed because the continent lacks adequate refining and petrochemical capacity.
‘The challenge is not only to extract, but to transform these resources into shared wealth,’ he told the summit, capturing a frustration shared from Lagos to Luanda.
Why the refineries are stuck
The bottleneck is money, not geology.
APPO estimates that more than 150 critical energy projects — including refineries, pipelines and gas facilities — are stalled across Africa. Many exist on paper but struggle to cross the finish line.
Project financing in Africa costs between 15 percent and 20 percent, compared with just four percent to six percent in Asia. At those rates, even commercially promising refineries can look financially toxic.
Ghezali also criticised the continent’s fragmented energy financing system. Eighteen national oil companies sit inside APPO, yet there is no unified capital market to pool risk, align strategy or attract institutional investors at scale.
The result is a patchwork model that keeps projects small, slow and expensive.
Paying twice for energy
While Africa exports crude, it simultaneously spends more than $120bn every year importing refined petroleum products and hydrocarbon services.
Heineken Lokpobiri, Nigeria’s minister of state for petroleum, called this imbalance unsustainable.
‘If Africa can retain part of this spending through local value addition, the economic impact would be transformative,’ he said, pointing to employment, technology transfer and stronger regional supply chains.
Gambian President Adama Barrow widened the lens, arguing that Africa must balance hydrocarbon development with renewable energy expansion and climate justice.
He warned that a global energy transition that excludes African financing needs would be neither fair nor workable.
A bet on a pan-African bank
In response, APPO has championed the creation of the African Energy Bank, due to be launched in Abuja in the first half of 2026.
Designed as a continent-wide platform for energy financing and services, the bank aims to mobilise $200bn by 2030 for hydrocarbon transport, storage and processing projects.
It also plans to raise $15bn within three years through listings of national oil companies — an attempt to deepen African capital markets while keeping ownership regional.
Nigerian officials warned that failure to mobilise capital would deepen both energy poverty and social poverty across West and Central Africa.
With 37 billion barrels of oil reserves and 209 trillion cubic feet of gas, Nigeria has positioned itself as the anchor state for this new financial architecture.
From extraction to industry
The $15bn annual loss crystallises the cost of a raw-export model that has outlived its usefulness.
Whether the African Energy Bank can lower borrowing costs, harmonise financing and unlock refinery investment will determine if Africa’s hydrocarbons become engines of industrialisation rather than cargo for someone else’s factories.
If it succeeds, tankers may still sail — but far more value will remain on African shores.
