Dangote offers to build East Africa refinery

The Iran war has exposed Africa’s vulnerability to fuel chokepoints, and the continent is heading for an 86 million tonne fuel shortfall by 2040, the Africa Finance Corporation (AFC) said Thursday.

Africa imports more than 70% of its refined fuel and $230 billion worth of essential goods each year, including food, plastics, steel and fertiliser, the AFC said in a report released at a Nairobi summit.

Africa’s dependence on fuel imports will rise from 74 million tonnes in 2023 to 86 million tonnes in 2040, the Pan-African infrastructure development organisation said. That is equivalent to nearly three of Aliko Dangote’s Nigerian refinery, by far the largest in Africa.

At the summit, Dangote told Kenyan President William Ruto and Ugandan President Yoweri Museveni that he would build a similar refinery in East Africa.

“I can give commitment to the two presidents that are here: If they will support the refinery, we’ll build the identical one that we have in Nigeria, 650,000 barrels,” Dangote said.

The supply shocks of East Africa have been exposed by the Middle East conflict and the resulting block on oil traffic through the Strait of Hormuz. Ruto said the war showed the need for Africa to stop relying on outsiders.

“We cannot continue to export raw materials and import finished products made from them,” Ruto said.

Fixing Africa’s energy shortfall requires new hubs and better performance from existing assets, the AFC report said. AFC chief economist Rita Babihuga-Nsanze noted that Africa has 80% of the world’s phosphate reserves but produces only 20% of global fertiliser stock.

“There’s a real opportunity for Africa to step into the gap here,” she said.

SOURCE: AFP