Sahara Group Calls for Increased Refining and Storage Capacities in Africa’s Downstream Oil Industry.
Addressing a distinguished audience of industry stakeholders at ARDA Week 2024, Wale Ajibade emphasized the urgent need to overcome significant hurdles hindering the progress of Africa’s downstream oil industry. Ajibade pinpointed three main challenges: inadequate refining capacity, lack of storage infrastructure, and logistical barriers.
“Inadequate refining capacity, coupled with a lack of storage infrastructure and logistical challenges, are hampering the growth and efficiency of Africa’s downstream oil sector,” stated Ajibade during his presentation titled “Africa Downstream Market Developments and Forecast.”
Ajibade underscored the risks associated with overreliance on imports due to insufficient domestic refining capacity, leaving African markets vulnerable to supply disruptions. He emphasized the necessity of bolstering refining capacity across the continent through fresh investments and collaborative efforts.
Furthermore, Ajibade highlighted the impact of deficient storage infrastructure on maintaining strategic reserves and ensuring reliable supply during periods of high demand or disruptions in the supply chain. He called for cooperative solutions involving regulators, operators, investors, financial institutions, and state-owned oil entities to address this challenge effectively.
In addition to addressing technical hurdles and underutilization of existing refineries, Ajibade stressed the importance of investing in refinery upgrades, modernizing pipelines, and constructing new storage facilities to enhance energy security and stimulate economic development.
Despite these challenges, Ajibade pointed out positive trends such as rapid growth driven by increasing energy demand, population expansion, industrialization, and urbanization across Africa. He projected significant increases in demand for refined petroleum products, petrochemicals, and related downstream services by 2040.
Ajibade also acknowledged initiatives like the African Continental Free Trade Area for promoting regional integration and facilitating cross-border trade in downstream commodities, thereby encouraging investments in integrated downstream assets and logistical infrastructure.
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In conclusion, Ajibade emphasized the necessity of fostering collaboration among industry leaders, governments, and agencies to address challenges through regulation and technology adoption while promoting sustainable growth and economic development across Africa.
Wale Ajibade’s insightful presentation at ARDA Week 2024 shed light on the critical challenges facing Africa’s downstream oil industry and called for concerted efforts to overcome these obstacles and unlock the sector’s full potential for the continent’s economic advancement.
