Africa Faces 86 Million Tonne Fuel Shortfall By 2040

The war in Iran has exposed Africa’s vulnerability to fuel supply disruptions, with the continent projected to face an 86 million tonne fuel shortfall by 2040, the Africa Finance Corporation (AFC) revealed in a report released Thursday at the Nairobi summit, according to AFP.

Africa currently imports more than 70 percent of its refined fuel, along with some $230 billion worth of essential goods each year, including food, plastics, steel, and fertiliser, the AFC said.

One potential solution was announced at the summit, where Africa’s richest man, Aliko Dangote, told Kenya’s President William Ruto and Uganda’s President Yoweri Museveni that he plans to build a refinery in East Africa similar to his massive complex in Nigeria.

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

According to the AFC report, Africa’s dependence on fuel imports is expected to rise from 74 million tonnes in 2023 to 86 million tonnes by 2040 — nearly the equivalent of three Dangote refineries, by far the largest in Africa.

East Africa’s vulnerability to supply shocks has been particularly exposed by the conflict in the Middle East and the resulting disruption of oil traffic through the Strait of Hormuz.

President Ruto told the summit that the war highlighted the need for Africa to reduce its reliance on external actors.

“Our ambitions will remain unrealised if we continue to depend on external capital whose primary interest is securing raw materials for their own industries,” he said. “We cannot continue to export raw materials and import finished products made from them.”

Kenya last year announced an ambitious infrastructure programme, including 50 new hydroelectric dams, 10,000 megawatts of additional power generation over seven years, and plans to revamp roads, rail, and airports.

“While historical injustices from colonialism to inequities in the global economic order are real, we must also acknowledge that other regions have faced similar challenges, but they have risen above them,” Ruto said.

“We are constrained only by the extent to which we accept the status quo through acquiescence, complacency, and limited ambition.”

Fixing Africa’s energy shortfall, the AFC report said, requires the creation of new energy hubs and improved performance from existing assets.

AFC’s Chief Economist, Rita Babihuga-Nsanze, highlighted examples such as Zambian dams that were not designed to cope with new drought conditions, and two gigawatts of Angolan hydropower that were not connected to the regional grid, leaving them underutilised.

She also noted fertiliser shortages caused by the war, since a high proportion of supplies comes from the Gulf.

Such vulnerabilities are “strange,” Babihuga-Nsanze said, pointing out that Africa holds 80 percent of the world’s phosphate reserves — a key source of fertiliser — yet produces only 20 percent of the global stock.

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