Dear Readers,
In a bold play to reclaim control of Africa's energy destiny, the African Export–Import Bank (Afreximbank) has pledged $3 billion to finance the purchase of locally refined petroleum products across the continent. This was announced earlier this month by the Executive Vice-President, Kanayo Awani, at an energy conference in Cape Town, South Africa. More than just a financing facility, this bold initiative is a strategic move towards energy sovereignty, aimed at ending Africa's dependence on imported fuels.
For decades, Africa has exported about 80% of its crude oil and 45% of its natural gas, bleeding nearly $30 billion annually importing refined petroleum products. The consequences of this dependency are staggering, according to the National Bureau of Statistics (NBS), Nigeria alone saw petrol import costs skyrocket by 105.3% in 2024, reaching N15.42 trillion, its highest level on record. This dramatic surge despite increased refining capacity, is tied directly to a 40.9% depreciation of the naira, which made imports prohibitively expensive.
Afreximbank's $3 billion facility is positioned to reverse this trend. Unlike traditional funding structures focused on financing fuel imports from outside Africa, this facility is focused entirely on intra-African trade. The goal is to stimulate demand for African-refined products and incentivise large-scale investments in domestic refining.
The bank aims to support 3 million barrels per day (bpd) of refining capacity across Africa in the near to medium term. Nigeria is already demonstrating what is achievable, with a wave of recent investments, including the landmark 650,000 bpd Dangote refinery, backed significantly by Afreximbank, the country is rapidly positioning itself as West Africa's refining powerhouse. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has licensed 83 refineries, with a combined refining potential exceeding 1.1 million bpd. Projections further indicate that Nigeria could reach 1.5 million bpd by 2025, positioning it as Africa's largest oil refiner.
Notably, Nigeria's petrol imports have dropped sharply from 44.6 million litres per day in August 2024 to just 14.7 million litres per day by April 2025. This is as a direct result of local refining ramp-up, proof that investment in domestic capacity can translate into real savings, greater energy security, and economic growth.
With Afreximbank's $3 billion revolving facility designed to support the purchase of locally refined petroleum products, the initiative is poised to drive investments in domestic refineries, stimulate robust local demand, drive job creation, and significantly reduce exposure to volatile currency fluctuations. In essence, it lays the foundation for transforming Africa from a mere exporter of raw resources into a fully integrated player in the global energy market.
This push for self-sufficiency in refining is also being bolstered by emerging Africa-focused financing institutions. The establishment of the African Energy Bank, alongside Afreximbank's growing portfolio, is signalling a significant shift in how critical energy infrastructure will be financed on the continent. These institutions are intentionally designed to meet Africa's unique challenges and are expected to close funding gaps that have traditionally hindered energy investments. Their presence is already improving investor confidence and attracting co-financing from global partners.
The question now is whether this convergence of increased local refining capacity and emerging African-led financing models will finally mark the turning point in Africa's transformation into a global refining powerhouse?
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