A statement made by the Organisation of the Petroleum Exporting Countries on Tuesday mentioned the newly improved and healthy state of Africa’s refining outlook. According to the report, Dangote’s project accounts for half of the 1.2 million barrels per day of new capacity projected for 2026.
The 2021 OPEC World Oil Outlook, highlighted that “Africa as a continent currently exports more than a third of its extracted fuels; however, in the nearest future, due to the projected increase in the continent’s population and the desire for urbanization, it will become vital for the continent as a whole to consume these fuels locally, and in a manner that meets global emissions standards.
The report made a brilliant recommendation concerning how to finance these projects and the recommendation is for governments to seek financial partnerships with the private sector for the growth and expansion of their refining and petrochemical industries.
The details of the report show that in Africa, the Dangote project is dominant in navigating the growth that Africa would experience. OPEC made known that the African energy sector had made progress in recent years regarding energy policies and projects that would enhance the continent’s socio-economic growth.
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“The projects include a number of pre-fabricated modular facilities. Once commissioned, these projects will help to reduce product imports to Nigeria and West Africa and will, in turn, increase the use of local crude. Also in North Africa, refinery capacity expansions are likely to take place in Egypt and Algeria.”
Africa being the home to abundance of energy resources, the report made mention of the inability to fully harness the potential that comes with these abundance resources. Therefore Africa is yet to unlock socio-economic benefits that comes with these prospects.
The problem seems to have originated from a web of causes such as regional uncertainties, as well as government policies and regulatory frameworks guiding the energy sector, and more recently the efficiencies required to reduce CO2 emissions in exploration and production activities thereby causing setbacks.
These issues, therefore, would make foreign investors develop apathy or lack of interest in financing the African energy sector and its ecosystem.
It is therefore important that a robust solution is designed while taking recommendations from these report and seeking other effective ways to solve the problem and it’s chain of causes and effects.
