Africa Eyes Refining Boom to Capture More Oil Value

Africa is intensifying efforts to capture greater value from its oil resources as crude exports continue to outpace domestic refining capacity. While the continent remains a major supplier of crude oil to global markets, heavy reliance on imported refined petroleum products is prompting renewed focus on strategic investments, regional trade integration and infrastructure upgrades.

According to the African Energy Chamber (AEC) and its State of African Energy 2026 Outlook, this imbalance is one of the most costly structural challenges facing Africa’s energy sector—shaping industrialisation prospects, energy security and long-term economic growth.

Structural imbalances in Africa’s oil trade

West and North Africa host some of the continent’s largest oil producers, including Nigeria, Angola, Libya, Algeria and Egypt. Yet limited and aging refining capacity means many countries export low-value crude oil while importing higher-value fuels such as gasoline, diesel and jet fuel.

This dynamic constrains job creation and downstream industrial development, but it also opens the door for large-scale investment. Projects such as Nigeria’s Dangote Refinery, alongside refinery upgrades and new builds planned in Angola, Egypt and South Africa, are expected to gradually reverse trade imbalances and retain more economic value within Africa.

Despite these developments, the Outlook projects that Africa will remain structurally short of gasoline, gasoil and jet fuel throughout the forecast period. While residual fuel oil output is expected to broadly match domestic demand and naphtha may retain a modest export surplus, net imports of gasoline and gasoil are forecast to widen over the long term. By 2050, gasoil net imports could approach 1.8 million barrels per day, while gasoline imports may exceed 1.5 million barrels per day, driven by strong demand growth and limited additional refining capacity.

Regional trade as a growth lever

Most African oil trade still flows outward to Europe, Asia and the Americas, with limited intra-African exchange. The African Continental Free Trade Area (AfCFTA) offers a platform to change this dynamic by encouraging cross-border energy trade and regional supply chains.

By harmonising regulations, expanding cross-border distribution networks and improving logistics, African countries can build a more integrated oil market. This would not only strengthen supply resilience but also generate economies of scale, support industrial growth and reduce exposure to external shocks.

Energy security and fiscal stability

Reducing dependence on imported refined products can ease pressure on foreign exchange reserves and improve fiscal stability. Expanded domestic refining, storage and distribution infrastructure allows countries to retain value locally while strengthening energy security—lessons underscored by disruptions during the COVID-19 pandemic and the Suez Canal blockage.

Infrastructure and investment opportunities

Downstream bottlenecks remain a key challenge but also present significant investment potential. Congestion at major ports such as Beira, Dar es Salaam and Mombasa, combined with limited pipeline connectivity to inland markets, forces heavy reliance on costly road transport.

Pipeline expansions, storage upgrades and port modernisation could unlock both public and private investment while improving efficiency. Landlocked countries, often operating with limited fuel stocks, stand to benefit most from coordinated regional infrastructure development.

The Outlook projects that net refined product imports will rise from 2 million barrels per day to 3.4 million barrels per day by 2050, highlighting opportunities across refining, storage, distribution and logistics. Modernising these systems will be critical to meeting long-term demand and ensuring supply security across coastal and inland markets.

Refining and the energy transition

Beyond hydrocarbons, Africa’s broader energy transition agenda presents opportunities for diversification. Integrating cleaner technologies with more efficient oil markets can strengthen energy security while supporting industrialisation, positioning Africa as a competitive and pragmatic player in the global energy transition.

“Africa produces the oil the world needs, but too much of the value still leaves the continent,” says NJ Ayuk, Executive Chairman of the AEC. “Investing in refining capacity, modern infrastructure and regional cooperation allows Africa to transform its oil trade, strengthen energy security, and ensure hydrocarbons drive industrialisation and economic growth for decades to come.”

Turning opportunity into action

Industry platforms such as African Energy Week (AEW)—returning to Cape Town from 12–16 October 2026—are expected to play a central role in translating these opportunities into projects. By convening policymakers, national oil companies, investors and infrastructure developers, AEW continues to foster partnerships across refining, storage, logistics and regional integration.

For MiningFocus Africa, Africa’s refining push signals a decisive shift: from exporting raw resources to building resilient, value-driven energy systems that support industrial growth and long-term economic transformation.