Africa remains heavily reliant on fuel imports despite being one of the world’s major oil-producing regions, a reflection of deep-seated structural challenges in the continent’s downstream energy sector. That’s the central concern in the Afreximbank July 2025 Commodity Market Update, which highlights infrastructure bottlenecks, capacity constraints, and underinvestment as key factors holding back Africa’s refining ambitions.
The report shows that West African crude exports rose 9% month-on-month in May 2025, reaching 3.56 million barrels per day (bpd). Yet even as production and exports increase, the continent’s limited refining infrastructure means a large portion of refined petroleum products still comes from overseas.
Refinery Projects Struggle to Meet Regional Needs
Although Africa is expanding its refining footprint, existing capacity remains insufficient. The report points to long-standing gaps in infrastructure, particularly aging pipelines and refineries built in the 1970s and 1980s, which are increasingly incompatible with modern industrial needs and environmental standards.
The report names several major refinery projects supported by Afreximbank, including:
- The Dangote Refinery in Nigeria (650,000 bpd capacity)
- The Port Harcourt Refinery refurbishment (210,000 bpd)
- Angola’s Lobito and Cabinda refineries (combined 260,000 bpd)
- Côte d’Ivoire’s SIR expansion, backed by over $6.5 billion in planned investment
- Uganda’s upstream and midstream infrastructure tied to the Tilenga, Kingfisher, and EACOP pipeline projects, representing nearly $7 billion in total oil sector investments
Nigeria: High Exports, But Still Dependent
Despite being a key exporter, Nigeria continues to face domestic shortfalls. In May, its crude exports to the United States reached a six-year high of 364,000 bpd, attributed to temporary shutdowns at the Dangote Refinery, which diverted domestic supply toward foreign markets.
In a parallel development, the report notes that Dangote Refinery is importing U.S. crude to sustain operations during the restart phase. The facility is expected to take delivery of 5 million barrels of WTI crude in July, sourced via global traders Vitol, Socar, and Glencore.
Structural Bottlenecks Undermine Intra-African Trade
Afreximbank flags Africa’s “limited intra-regional energy networks” as a persistent challenge. These gaps, which include outdated transport infrastructure and fragmented national policies, continue to limit the integration of energy markets under the African Continental Free Trade Area (AfCFTA) framework.
“Africa’s oil potential is vast, but disconnected,” the report states, calling for harmonised infrastructure investments and improved regional coordination.
The bank also points to ongoing production losses, particularly in Nigeria, where up to 400,000 bpd are lost daily due to theft, vandalism, and operational inefficiencies.
Outlook: Investment Needed to Align Output with Capacity
While Africa’s crude output is projected to remain strong in the near term, the report underscores the need to align production with local refining capacity and regional trade flows. Without such alignment, countries risk continuing to export raw materials only to import refined products at higher cost and under tighter supply conditions.
Afreximbank, through its growing oil infrastructure finance portfolio, is pushing to change that narrative, backing refineries, pipelines, and storage facilities that could reposition African nations from exporters of raw crude to suppliers of finished fuels and petrochemicals.
The July 2025 report presents a clear case: Africa’s oil sector cannot rely on upstream growth alone. Closing the refining gap is critical not just for energy security but for unlocking broader industrial and economic gains. Without that shift, Africa’s energy-rich nations will remain vulnerable to external price shocks and global supply chain volatility.
