Finance body says Africa faces an 86 million tonne fuel shortfall by 2040

The Africa Finance Corporation said the continent is heading towards an 86 million tonne fuel shortfall by 2040.

In a report published on Thursday, the AFC said the Iran war has exposed the continent’s vulnerability to global shipping chokepoints.

It noted that Africa imports over 70 per cent of its refined fuel and some $230 billion worth of essential goods annually, including food, plastics, steel, and fertiliser.

Its dependence on fuel imports is projected to rise steadily from 74 million tonnes in 2023 to 86 million tonnes by 2040.

That, the AFC said, is equivalent to almost three of the giant refineries run by the Dangote group in Nigeria, which are by far Africa’s biggest.

Speaking at the report’s launch in Nairobi, the AFC’s chief economist Rita Babihuga-Nsanze said the crisis in the Middle East had made the consequences of this dependence impossible to ignore.

She noted that the effective shutdown of the Strait of Hormuz, which accounts for a fifth of global fuel transport, has left import-dependent countries in East Africa facing critical fuel shortages.

But the AFC said the passage was not the only chokepoint posing a threat to the continent’s supply lines.

Speaking at the summit, Kenyan President William Ruto, 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," he said.

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

The pan-African finance institution said that fixing Africa's energy shortfall requires new hubs and better performance from existing assets.