Now greater than ever, Africa must discover its choices to cut back its vitality expenditure as vitality prices tremendously affect the expansion or decline of any given financial system.
Vitality prices are a key determinant of inflation, together with fundamental facilities comparable to meals, water and different commodities which are totally different and important for various areas.
For an financial system to thrive, vitality have to be as low-cost as potential. Sadly, this has hardly been the case in Africa up to now yr.
The next battle between Russia and Ukraine has led to a major enhance in vitality prices globally.
For sure, for a creating continent like Africa, the brunt of this disaster is being broadly felt, as quite a few nations on the continent have skilled a point of inflation up to now yr.
Inflation, though fueled partly by meals will increase and different nuanced components, remains to be largely a results of the rising vitality prices which have plagued the whole planet.
Africa, hardly refines its personal oil regardless of its enormous oil reserves, which on reflection has induced a big deficit on its oil backside line.
Briefly, most oil-producing African nations, particularly sub-Saharan African nations, promote their crude oil to nations exterior the continent for a specific amount after which purchase the oil again in a refined state for the same quantity.
This in itself is as economically counterproductive because it will get, however what makes issues considerably worse is when exterior components like warfare make the price of oil imports rather more costly. A misery that the majority African states suffered within the earlier yr.
It’s also worrying that this downside will persist for the following two years, as a number of international economists have hinted at the potential of a recession this yr.
With this in thoughts, the obvious answer to treatment this downside is just to construct refineries in Africa. Fortuitously, this concept has been floating round Africa for a while now.
As not too long ago as this week, Angola and Zambia established a commerce relationship the place Zambia would import oil from Angola as soon as Angola completes the development of its refinery. Learn the story right here.
In Nigeria, this dialog has a hanging similarity as Africa’s richest man, Dangote, has expressed curiosity in constructing a refinery within the nation.
He has been touting this concept for some time, however dedicated to launching the challenge by the tip of 2023.
Under are 5 issues it is advisable to find out about Dangote’s new oil refinery.
Timeline: The refinery was supposed to begin in 2022, however a couple of glitches put the plans on maintain. Nevertheless, the challenge is ready to start this yr because the President of Nigeria, Muhammadu Buahri, has dedicated to commissioning the Dangote Oil Refinery on January 24. The challenge is anticipated to be accomplished in 2026.
Location: The architected challenge has already been heralded as an African milestone, ought to it come to fruition. It’s anticipated to be the biggest vertically built-in petrochemical advanced on the earth. The refinery will probably be situated in Lagos Nigeria, particularly the Lekki Free Zone, protecting a land space of roughly 2,635 hectares, which based on the location is about six occasions the dimensions of Victoria Island.
Capability: The refinery could be able to producing 650,000 barrels of oil per day, subsequently with an preliminary rollout of 540,000 barrels per day. As well as, the plant will produce 3 billion customary cubic ft of fuel, 65 million liters of premium motor spirit (gasoline), 15 million liters of diesel and 4 million tonnes of jet gas day by day. Roughly 8 million tons of oil merchandise yearly.
Goal: With the anticipated capability of the refinery, Dangote has famous that it will be answerable for Nigeria’s whole oil provide, successfully eliminating the necessity for oil imports. Nevertheless, the corporate additionally revealed plans to provide an oil surplus meant on the market throughout different African nations and maybe different areas exterior the continent, which might result in $11 billion in oil merchandise from Nigeria yearly.
Value: For an formidable challenge like this, the prices are anticipated to be excessive, and the stated expectation isn’t far off. The Dangote oil refinery would price a complete of $19 billion to construct.