New cooperation on refining, storage, distribution and financing comes as industry leaders call for faster downstream expansion across the continent.
Africa’s downstream sector is moving higher up the strategic agenda following the signing of a memorandum of understanding between the African Petroleum Producers Organization (APPO) and the African Refiners and Distributors Association (ARDA) in Cape Town. Framed around regional downstream integration, the agreement comes as industry leaders warn that supply disruptions and import dependence are exposing structural weaknesses across African fuel markets.
A Framework for Regional Integration
The MoU sets out a framework for collaboration across infrastructure development, technical and financial coordination, and capacity building. In practical terms, the partnership is focused on regional refining, storage and distribution networks, as well as more integrated hydrocarbon markets across the continent. It also aligns with a broader strategy to establish five regional refining and distribution hubs and scale Africa’s refining capacity to three million barrels per day by 2035.
Infrastructure Moves to the Center
A key message from the agreement is that fragmented national systems will need to give way to larger regional platforms. “We need regional infrastructure to move from fragmented markets to markets at scale. We need a robust intra-African infrastructure market,” said Anibor Kragha, Executive Secretary of ARDA. He added: “By the 30th June, we will ensure that we have come up with a plan of action. By next year, we will demonstrate progress.”
The technical and financial side of the partnership includes APPO’s African Crude Oil and Petroleum Products Market study and ARDA-led work to harmonize cleaner fuel standards across regional economic communities. The agreement also reinforces the role of African-led financing, with the Africa Energy Bank positioned as a central enabler of downstream infrastructure investment.
Refining Capacity Becomes the Central Argument
Downstream expansion was presented not simply as an energy issue, but as an industrial and economic one. The African Energy Chamber argued that stronger refining capacity is essential to reducing reliance on imported fuels, stabilizing supply and retaining more value within African markets. With African oil demand projected to reach 4.5 million barrels per day by 2050, the pressure to expand refining capacity is becoming more urgent.
“A big question for Africa is whether we will embrace innovation, growth and prosperity or slide back to a time where we will deny facts and demand. We need to produce more energy. That is why we keep saying “drill baby drill.” We should never hold back on that,” NJ Ayuk, Executive Chairman of the African Energy Chamber said.
Sovereignty, Trade and Resilience
The case for downstream expansion has also sharpened because of external shocks. The MoU was signed against a backdrop of global supply and price disruptions linked to the ongoing war in the Middle East, with the conflict putting pressure on crude prices, fertilizer imports and pump prices in parts of Africa. Within that context, the agreement is being positioned as part of a broader effort to strengthen intra-African trade and regional value chains.
Farid Ghezali, Secretary General of APPO, said: “A new chapter begins today between ARDA and APPO. Our wish is to work together as Africans, moving from reflection in silos to a reflection on a regional and continental level. This will enable us to move forward to economic and energy sovereignty.”
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