Keypoints:
- Africa seeks to expand refining to cut fuel imports
- Energy poverty persists despite rising demand outlook
- Policy reform and $100bn investment gap remain critical
AFRICA’S downstream oil and gas sector is regaining urgency as recent Gulf-related supply disruptions expose long-standing weaknesses in the continent’s energy systems. Industry leaders are now calling for a decisive shift towards refining, distribution and domestic value creation.
With over 600 million Africans lacking electricity and around 900 million without access to clean cooking solutions, according to World Bank and IEA estimates, the continent faces a widening energy gap. As oil demand is projected to reach 4.5 million barrels per day by 2050, expanding refining capacity is now central to easing fuel inflation, reducing foreign exchange pressure and accelerating industrial growth.
Energy security returns to the agenda
At ARDA Week 2026, stakeholders highlighted the growing mismatch between demand and supply resilience. Continued reliance on imported fuels—estimated at up to seventy percent of consumption in some markets—leaves African economies exposed to price volatility and geopolitical shocks.
This vulnerability is evident across major markets, particularly in ongoing fuel import challenges across Africa’s largest economies, where supply disruptions continue to strain public finances and domestic pricing.
Ayuk: ‘Africa must refine and produce’
Delivering a keynote, NJ Ayuk framed the challenge as both economic and existential.
‘We need to produce more energy. That is why we keep saying “drill baby drill”. We should never hold back on that,’ he said.
Ayuk stressed that downstream expansion is no longer optional but essential. Domestic refining, he argued, would stabilise fuel supply, reduce import dependency and retain value within African economies.
‘We will refine, drill and ensure that our young people across the continent have access to energy,’ he added.
African firms reshape the sector
A major shift is underway as African companies take the lead in refining and distribution, marking a departure from decades of foreign-led development.
Projects such as the Dangote Refinery demonstrate the scale of ambition, with Dangote refinery powering Africa’s fuel market shift. Meanwhile, firms like Sahara Group are expanding supply chains and storage networks across borders.
This transition signals deeper structural change, with indigenous capital now driving infrastructure, logistics and market integration.
Policy reform and funding gaps persist
Despite momentum, structural barriers remain significant. Regulatory uncertainty, fragmented markets and limited access to capital continue to slow progress.
Ayuk called for stable fiscal regimes, reduced taxation and streamlined regulation to attract investment. Africa is estimated to require more than $100 bn in refining investment to meet future demand.
‘Companies need to be given the tools they need to be successful,’ he said, advocating for market-driven policies and stronger accountability.
The financing challenge reflects broader trends, particularly Africa’s $100 bn refining investment gap as fuel demand surges, where capital mobilisation remains uneven despite rising demand.
Regional trade seen as critical lever
Cross-border collaboration is essential to unlocking scale. Persistent tariffs and customs bottlenecks continue to undermine intra-African energy trade.
Efforts to deepen integration are gaining traction under frameworks such as the African Continental Free Trade Area, which aims to reduce energy trade barriers, enable shared infrastructure, optimise refining capacity and minimise duplication across markets.
This is particularly vital for landlocked countries that depend heavily on imported fuel products.
A turning point for Africa’s energy future
The renewed focus on downstream development reflects a strategic shift: Africa is moving to capture more value from its hydrocarbon resources while tackling widespread energy poverty.
With global markets increasingly volatile, the case for domestic refining is strengthening. The decisions made now—on policy, investment and regional coordination—will shape the continent’s industrial trajectory for decades.
As Ayuk concluded, Africa must act decisively: produce, refine and build systems that deliver energy access, jobs and long-term resilience.
