ARDA Warns Africa's Industrialization Depends on Resilient Energy Supply Chains
The Executive Secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, has declared that Africa's industrialisation ambitions will heavily depend on strengthening energy security through resilient and diversified supply chains. Speaking at the ongoing ARDA Week 2026 in Cape Town, Kragha issued a stark warning that rising population growth and escalating energy demand across the continent could deepen existing supply vulnerabilities if urgent investments are not made across the downstream oil sector.
Population Growth and Rising Demand
Kragha highlighted that Africa's population is projected to grow significantly in the coming decades, placing increasing pressure on energy systems and fuel demand. According to industry forecasts, demand for petroleum products, including gasoline, diesel, and jet fuel, is expected to rise steadily, particularly in sub-Saharan Africa. He stressed that a robust downstream energy sector would be critical to driving economic development across key industries such as mining, manufacturing, fertiliser production, pharmaceuticals, and agro-processing.
"Energy deficits will directly impact Africa's ability to industrialise and sustain economic growth," Kragha emphasized, underscoring the fundamental link between reliable energy access and broader economic progress.
Vulnerabilities and Dependence on Imports
Despite the continent's vast natural resource base, Africa continues to rely heavily on imports of refined petroleum products, particularly from the Middle East. This dependence, Kragha noted, exposes many countries to supply disruptions, price volatility, and foreign exchange pressures. In East and Southern Africa, several countries depend almost entirely on imported fuel, with supply chains concentrated around a few external sources.
Kragha revealed that many African countries maintain less than 20 days of fuel reserves, leaving them highly vulnerable to shocks. He cited recent geopolitical tensions, including disruptions linked to global conflicts, as evidence of how fragile supply chains can trigger widespread fuel shortages, panic buying, and price spikes across African markets.
"Geopolitics has become a key driver of international product markets, making energy security more unstable than ever before," he stated, pointing to the increasing influence of global events on local energy stability.
Investment Needs and Infrastructure Gaps
To address these risks, ARDA is advocating for significant investments across the downstream value chain, including refining capacity, storage infrastructure, pipelines, transport logistics, and distribution networks. Kragha said Africa would need at least six additional large-scale refineries, comparable in size to Nigeria's Dangote Refinery, to achieve self-sufficiency in petroleum products.
Increased local refining, he noted, would reduce dependence on imports, ease pressure on foreign exchange, and create opportunities for intra-African trade. However, he cautioned that new and existing refineries must balance domestic affordability with export opportunities to remain financially viable.
Beyond refining, infrastructure gaps remain a major constraint. Limited storage capacity reduces the ability of countries to build strategic reserves, while ageing and inefficient pipeline networks contribute to product losses and distribution bottlenecks. Key regional ports in East Africa are already experiencing congestion and delays in handling fuel imports.
Petrochemicals and Energy Transition
Kragha also pointed to the importance of developing a vibrant petrochemicals industry as part of Africa's industrialisation strategy. Petrochemicals, he said, are used in the vast majority of manufactured goods and present an opportunity for value addition, import substitution, and job creation. Countries such as Nigeria and Egypt, with large populations and natural gas resources, are well-positioned to become regional hubs for petrochemical production.
At the same time, Africa must balance its economic development goals with the global energy transition. While renewable energy sources such as solar, wind, and hydro are expanding, fossil fuels, particularly oil and natural gas, will remain central to the continent's energy mix in the near term. Natural gas, in particular, is seen as a transition fuel, supporting power generation and industrial processes such as fertiliser, steel, and cement production.
Kragha added that emerging global climate policies in aviation and shipping could create new opportunities for Africa, including the development of sustainable aviation fuels and cleaner marine fuels, leveraging existing refining infrastructure. He cited regional infrastructure projects such as the Lobito Corridor as examples of how integrated investments in transport, logistics, and energy can unlock economic value and boost intra-African trade, which currently remains significantly lower than in other regions.
Call for Coordinated Action
Kragha emphasised that achieving energy security would require coordinated action by governments, regulators, and private sector players. "Africa must strengthen, diversify, and continuously monitor its supply chains across all energy sources," he asserted. He added that substantial near-term investments in refining, storage, and distribution would be essential to close energy gaps and support the continent's long-term industrialisation agenda.
The ARDA Week 2026 conference in Cape Town serves as a critical platform for stakeholders to discuss these pressing issues and forge partnerships aimed at building a more resilient energy future for Africa.
