Seoul Gazette - Africa faces 86 mn tonne fuel shortfall by 2040: AFC

Africa imports over 70 percent of its refined fuel and some $230 billion worth of essential goods, including fuel, food, plastics, steel, and fertiliser each year, the AFC said in a report released in Nairobi.

Its dependence on fuel imports will continue to rise from 74 million tonnes in 2023 to 86 million tonnes in 2040, said the report by the pan-African finance institution.

That is equivalent to almost three of the giant refineries run in Nigeria by the Dangote group -- by far the biggest 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 the AFC's chief economist Rita Babihuga-Nsanze at the report's launch.

The Strait of Hormuz, which accounts for a fifth of global fuel transport, has been effectively shut down by the war in the Middle East, leaving import-dependent countries in east Africa facing critical shortages.

Kenyan President William Ruto, speaking at the AFC summit, said the war showed the need for Africa to stop relying on outsiders.

"Our ambitions will remain unrealised if we continue to depend on external capital whose primary interest is securing raw materials for their own industries," said Ruto.

"We cannot continue to export raw materials and import finished products made from them," he added.

- Infrastructure -

Kenya last year announced an infrastructure splurge, including 50 new hydroelectric dams and 10,000 megawatts of additional power generation within seven years, as well as plans to revamp roads, rail 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."

Fixing Africa's energy shortfall requires new hubs and better performance from existing assets, the AFC report said.

Babihuga-Nsanze highlighted the example of Zambian dams that were not designed to cope with new drought conditions, and two gigawatts of Angolan hydropower that was not connected to the regional grid and therefore went to waste.

She also highlighted the shortages of fertiliser due to the Mideast war, since a high proportion comes from the Gulf.

Such vulnerabilities are "strange", said Babihuga-Nsanze, given that Africa has 80 percent of the world's phosphate reserves -- a key fertiliser source -- yet only produces 20 percent of the global stock.

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

G.Seong--SG