By The Correspondent reporter
Eight African countries, including South Africa, Angola, Namibia, Ghana, Niger, Chad, Burkina Faso, and the Central African Republic, are in advanced discussions to begin sourcing fuel from Nigeria’s Dangote Refinery, a facility projected to become a major supplier across Africa.
At a time when global energy markets are shifting and African countries face rising fuel costs, the $20 billion refinery is strategically positioned to meet substantial fuel demand and potentially redefine the continent’s fuel import dynamics.
According to reports, Ghana, Angola, Namibia, and South Africa have been actively involved in discussions, aiming to secure agreements that could see them transitioning away from costly fuel imports from Europe.
For countries like Ghana, which spends over $400 million monthly importing fuel from European markets, the prospect of sourcing from the Dangote Refinery represents a move towards both economic efficiency and energy security.
Ghana's National Petroleum Authority (NPA) Chairman, Mustapha Abdul-Hamid, underscored the importance of this potential shift, noting that the move would significantly reduce Ghana’s reliance on foreign fuel imports, thus benefiting the country's economy and local industry.
“I can confirm that talks are actually at an advanced stage with Ghana, Angola, Namibia, and South Africa, while initial discussions are underway with Niger, Chad, Burkina Faso, and the Central African Republic,” a source familiar with the negotiations reported. This lineup highlights a strategic collaboration between the Dangote Refinery and several African nations, aiming to forge a more self-reliant African fuel network.
The Dangote Refinery, located in Lagos, Nigeria, is one of Africa's largest and most ambitious industrial projects. With a production capacity of 650,000 barrels per day, the facility was designed to meet not only Nigeria’s domestic fuel needs but also a significant portion of Africa’s demand.
Its expected launch positions it as a game-changer in regional fuel markets, providing African countries with an alternative source of refined fuel closer to home, thus reducing both logistics costs and reliance on European suppliers. As Africa’s economies expand, there is a growing need for dependable, locally available fuel sources to support industrial and economic growth across the continent.
For countries like Ghana, securing fuel from Dangote is not only a financial decision but also a matter of national strategy. Sourcing from Europe has become increasingly expensive due to fluctuating exchange rates, international oil price volatility, and the logistical challenges associated with long-distance imports.
The potential to purchase fuel locally from Dangote’s refinery would offer Ghana and other countries a more stable, predictable supply chain. According to Abdul-Hamid, reducing Ghana’s dependency on European fuel imports would have far-reaching positive effects, contributing to improved national budget stability and economic resilience.
However, the integration of Dangote's refinery into African fuel supply chains faces challenges. Some local fuel marketers in Nigeria have expressed reluctance to purchase from the facility, citing undisclosed reasons.
When asked about the marketers’ stance, a source close to the refinery hinted at an underlying “hidden agenda” and expressed confidence that “between now and January 2025, the reasons for this reluctance will become clear.” The source further emphasized the importance of the refinery, describing it as a "pillar of sustainable fuel supply" capable of meeting Nigeria's fuel needs while also providing surplus capacity for export to other African nations.
Dangote Refinery’s role as a prospective continental supplier could bring sweeping changes to African fuel markets. The facility’s proximity to various African countries reduces the logistics costs associated with overseas imports and shortens delivery times, which can be critical during times of fuel scarcity.
For landlocked nations like Chad, Burkina Faso, and the Central African Republic, access to a nearby supplier also offers strategic advantages, allowing for more streamlined transportation routes and reduced vulnerability to international supply chain disruptions.
The potential benefits of the refinery extend beyond fuel. By creating regional energy independence, Dangote's facility could drive investment in other sectors, from transport and logistics to local job creation and infrastructure development. The refinery’s operational scale could also stimulate other industrial projects within Nigeria, promoting economic diversification beyond oil exports.
Moreover, the move to source fuel from the Dangote Refinery aligns with broader continental initiatives, such as the African Continental Free Trade Area (AfCFTA), which aims to boost intra-African trade. By fostering local supply chains, Africa’s fuel market could witness a historic shift, one that minimizes the continent’s reliance on non-African sources while supporting economic unity across borders.
As discussions progress, the anticipation around Dangote Refinery’s launch remains high. For the African countries involved, a successful partnership with Dangote could signal the beginning of a more interconnected, self-sustained energy network across Africa.
For Nigeria, the refinery represents a landmark achievement in industrial development, showcasing the potential for African-led solutions to address Africa’s needs. The coming months will likely reveal more details about the agreements and the extent to which Dangote Refinery will reshape Africa's energy landscape.