Africa loses an estimated US$15 billion each year by exporting most of its crude oil without local refining, energy leaders said during the ninth Nigerian International Energy Summit, highlighting the continent’s urgent need to boost processing capacity.
Speaking at the summit, Farid Ghezali, secretary general of the African Petroleum Producers’ Organization (APPO), said about 70 percent of Africa’s crude oil and 45 percent of its natural gas are shipped abroad in raw form. This reliance on unprocessed exports, he noted, limits job creation and economic opportunities for a rapidly growing population.
“The challenge is not only to extract, but to transform these resources into shared wealth,” Ghezali said.
Africa currently spends over US$120 billion annually importing refined petroleum products and hydrocarbon-related services, underscoring the imbalance between raw material exports and domestic value addition. Heineken Lokpobiri, Nigeria’s minister of state for petroleum, said retaining even part of this spending through local refining would have transformative economic effects.
Ghezali said financing remains the main barrier to developing energy infrastructure on the continent. More than 150 critical projects, including refineries, pipelines, and gas processing facilities, remain stalled due to high project costs and fragmented financial markets. Project financing in Africa ranges between 15% and 20%, far higher than the 4 percent to 6 percent typical in Asia, reducing the economic feasibility of large-scale energy investments.
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Fragmentation across the continent also hampers progress. The 18 national oil companies affiliated with APPO operate independently without a shared financial platform, limiting regional synergies and the ability to attract large-scale capital.
Gambian President Adama Barrow, speaking at the summit, emphasized that Africa’s hydrocarbon development must align with renewable energy expansion and climate justice. He called for financing mechanisms that are accessible to African nations to support both traditional and green energy infrastructure.
In response to these challenges, APPO is backing the creation of the African Energy Bank, expected to launch in Abuja in the first half of 2026. The institution aims to serve as a pan-African platform for financing and managing energy projects, with plans to mobilize US$200 billion by 2030 for hydrocarbon transport and processing projects. The bank also targets raising US$15 billion over three years through listings of national oil companies.
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Nigerian authorities warned that failure to mobilize financing would exacerbate energy and social poverty across the continent. Nigeria, the summit host, holds Africa’s largest oil reserves at 37 billion barrels and gas reserves of 209 trillion cubic feet, positioning it to play a leading role in the sector’s transformation.
Experts said Africa’s reliance on raw commodity exports underscores the continent’s vulnerability in global energy markets and the opportunity cost of underdeveloped industrial infrastructure. Building refineries and associated processing facilities would allow countries to retain more value domestically, create employment, and drive industrialization.
“Unless Africa develops the infrastructure to process hydrocarbons locally, the continent will continue to export potential wealth and import finished products at high costs,” Ghezali said.
The annual $15 billion loss highlights the economic cost of maintaining a raw commodity export model. Summit participants called for coordinated action to improve financing, strengthen regional energy governance, and develop strategic infrastructure to transform Africa’s oil and gas sector into a driver of shared prosperity.
With global energy transitions accelerating, African nations face pressure to modernize their hydrocarbon industries while investing in renewables. Summit leaders stressed that securing financing, fostering regional collaboration, and building refineries are critical to unlocking the continent’s full economic potential.
