Mohammed Shosanya

Wale Ajibade, Executive Director, Sahara Group has said,that inadequate refining capacity, insufficient storage, and impeded product movement across Africa are the three major impediments slowing the growth of the continent’s downstream oil sector.

In a paper, “Africa Downstream Market Developments and Forecast”,presented at the recently concluded Africa Refiners and Distributors Association (ARDA) Week 2024 in Cape Town, South Africa,Ajibade said addressing these gaps would transform Africa’s downstream petroleum industry.

He noted that shoring up the continent’s refining capacity was critical to sustaining efficiency, availability and accessibility in the sector. He explained that as Africa explores ways of achieving hitch-free energy transition, efforts must be made to ensure optimisation of the sector’s value responsibly and collaboratively.

“Many African countries lack sufficient refining capacity to meet domestic demand, leading to heavy reliance on imports. This lack of self-sufficiency leaves these markets vulnerable to supply disruptions. Addressing this would require fresh investments and collaboration across the sector’s value chain,” he said.

On insufficient storage infrastructure, Ajibade said this has continued to hamper the ability to maintain strategic reserves and ensure reliable supply during times of high demand or supply chain disruptions.

“In East Africa, shippers at Beira, Dar es Salaam and Mombasa — the key entry ports for refined products — are experiencing significant demurrage. Ageing and poorly maintained pipeline networks result in significant product losses and distribution bottlenecks,” he stated.

According to him, a collaborative solution which involves regulators, operators, investors, financial institutions, and government owned oil companies is required to help the African downstream sector to reach its full potential and provide reliable and affordable energy access to the continent’s growing population.

“Africa’s downstream Market leaders will need to work closely with her the various governments and agencies to carefully navigate the complex challenges through regulation and technology adoption while pushing fo sustainable growth across Africa,” he said.

He further stated that the continent increasingly relies on imports of refined products to support consumption growth, primarily due to the underutilisation of existing refineries caused by technical issues.

“Investments in refinery upgrades, pipeline modernisation, and the construction of new storage facilities will be crucial to overcoming these challenges and unlocking the region’s energy security and economic development,” he added.

Highlighting some positive trends in the sector, Ajibade said the African downstream market is experiencing rapid growth and transformation, driven by soaring energy demand, population growth, and the focus on industrialisation, urbanisation, and economic He explained that these would drive the demand for refined petroleum products, petrochemicals, and related downstream services is forecasted to grow by up to 30% by 2040.

“Africa is experiencing a lot of migration from rural to urban areas. In 2015, Africa had only six cities with more than five residents compared to 17 expected in 2030. Africa has experienced an increase in the number and capacity of industries across the continent, with industrial GDP set to double by 2025,” he said.

On the promotion of regional and cross-border trade, Ajibade noted that initiatives such as the African Continental Free Trade Area are promoting regional integration and facilitating cross-border trade in downstream products.

“This is encouraging investments in integrated downstream assets, logistical infrastructure, and harmonised regulatory frameworks to capitalise on the expanded market opportunities,” concluding that production of chemicals, plastics, lubricants, and specialty products would foster self-sufficiency and spur economic growth though increased job creation, reduced import reliance and enhanced technological innovation.”

Mayowa Balogun

Minister of State Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, has emphasised the strategic importance of investment in the gas sector, saying it was pivotal for driving industrialization, job creation and improvement of the livelihood of the generality of Nigerians.

He stated this at the groundbreaking ceremony of the company’s 20,000 Metric Tonnes (MT) Liquefied Petroleum Gas (LPG) depot project at Atabrikang, Aquaha in Ibeno Local Government Area, Akwa Ibom State at the weekend.
He lauded the vision and commitment of Windek Energy Limited in Nigeria’s journey towards energy security and economic prosperity.

A statement by the Spokesman to the minister, Louis Ibah, quoted Ekpo,as saying that the project would boost ongoing efforts in ensuring affordable supply of LPG, commonly known as cooking gas, to Nigerians.

“This project marks a significant milestone in Nigeria’s journey towards energy security and economic prosperity. It will enhance access to clean and affordable cooking fuel,” the Minister said.

Ekpo thanked the Akwa Ibom State government for providing the enabling environment for investments to thrive.
He underscored the fact that the establishment of the LPG depot was a testament to the fruitful collaboration between the public and private sectors in the state.

The Minister said the LPG depot project holds immense promises, not only for Akwa Ibom people, but for the entire nation.

Akwa Ibom State Governor, Pastor Umo Eno, in his speech thanked the Minister of State Petroleum Resources Gas, Ekperikpe Ekpo, for facilitating the establishment of the gas plant in the state.

Eno,represented by the Deputy Governor, Senator Akon Eyakenyi, also assured Ekpo and the management of Windek Energy Limited of the security of contractors and staff, as well as the support and collaboration of the host community in bringing the project to fruition.

MD/CEO, Windek Energy Limited, Mrs. Nosa Okunbor, said the project holds the prospect of stimulating economic growth, fostering innovation, and facilitating the emergence of new industries and value chains within Akwa Ibom State.

“This project is not just about enhancing energy infrastructure, but about enhancing life such that our mothers will cook without hazards to their health,” she said.