Africa at risk of major fuel shortfall, AFC warns

Africa is projected to face an 86 million tonne fuel shortfall by 2040, highlighting growing vulnerability to global supply disruptions, according to the Africa Finance Corporation (AFC).

The warning comes as the Iran conflict has exposed Africa’s dependence on fuel chokepoints, the AFC said on Thursday, News.Az reports, citing AFP.

The continent currently imports more than 70% of its refined fuel and around $230 billion worth of essential goods annually, including fuel, food, plastics, steel, and fertiliser, according to a report released in Nairobi.

The report projects that Africa’s reliance on imported fuel will increase from 74 million tonnes in 2023 to 86 million tonnes in 2040. The latter figure is roughly equivalent to nearly three of the massive refineries operated by Nigeria’s Dangote Group, currently the largest in Africa.

“Not only is it importing fuel, but on the eastern side of the continent, those imports are vulnerable to chokepoints — we’ve all learned about the Strait of Hormuz this year, and it’s not the only chokepoint,” said AFC chief economist Rita Babihuga-Nsanze during the report’s launch.

The Strait of Hormuz, which handles about one-fifth of global fuel transport, has been heavily disrupted by the Middle East conflict, creating supply pressures for import-dependent countries in East Africa.

Kenyan President William Ruto, speaking at the AFC summit, said the situation highlights the need for Africa to reduce reliance on external sources.

“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,” he added.

Kenya last year announced a major infrastructure expansion plan, including the construction of 50 hydroelectric dams and an additional 10,000 megawatts of power generation capacity within seven years, alongside upgrades to roads, railways, 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 told the summit.

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

The AFC report argues that addressing Africa’s energy shortfall will require the development of new regional hubs and improved efficiency of existing infrastructure.

Babihuga-Nsanze cited examples such as Zambian hydroelectric dams that were not designed for worsening drought conditions, and around two gigawatts of hydropower capacity in Angola that remains unused due to a lack of connection to regional grids.

She also pointed to fertiliser shortages linked to the Middle East conflict, noting that a large share of global supply comes from the Gulf region.

Despite these vulnerabilities, she said the situation also presents opportunities. Africa holds around 80% of the world’s phosphate reserves, a key ingredient in fertiliser production, yet accounts for only 20% of global output.

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

News.Az 

By Nijat Babayev