Adetunji Oyebanji, Chairman of OTL Africa Downstream Energy Week, has asserted that Africa must develop refining capacities and energy solutions that directly reflect the continent’s purchasing power, infrastructure limitations, and industrial requirements.
Speaking on the necessity of strengthening energy security, Oyebanji argued that expanding refining capacity across the continent must be accompanied by strategic planning to ensure these facilities remain competitive within the downstream petroleum industry.
He noted that for refining investments to be sustainable, they must account for the economic realities of African markets, rather than simply mirroring global production models that may not suit local demand profiles.
Strengthening downstream competitiveness
The call for a tailored approach comes at a time when many African nations are attempting to reduce their heavy reliance on imported refined petroleum products. While the continent possesses vast crude oil reserves, the lack of sufficient domestic refining capacity has frequently led to supply volatility and significant foreign exchange pressure.
Oyebanji, in addressing the nuances of energy development, emphasised that capacity expansion cannot exist in a vacuum. He suggested that without corresponding improvements in midstream and downstream infrastructure—such as pipelines, storage facilities, and distribution networks—newly built refineries may struggle to reach their intended markets efficiently.
The emphasis on “purchasing power” addresses a critical economic concern: the risk of producing high-grade fuels that the local market cannot afford or does not have the industrial base to consume. To avoid stranded assets, Oyebanji maintains that energy solutions must be synchronised with the actual consumption patterns of African industries.
Industry experts have long debated the balance between large-scale integrated refineries and smaller, modular units that can be deployed more flexibly across different regions. The current trend of massive investments in the sector aims to shift Africa from a net importer to a self-sufficient producer, but the logistical and economic hurdles remain significant.
As African nations move toward more localised energy production, the focus shifts to how these refineries will integrate with existing power grids and industrial hubs. The success of these projects will likely depend on whether governments and private investors can bridge the gap between production capacity and the practical ability of local economies to absorb the supply.
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