Cairo, Egypt — To tackle Africa’s ongoing dependence on imported refined petroleum products, which contributed to annual expenses of $30 billion in importing these goods because of insufficient refining capacity, African Export-Import Bank (Afreximbank) has initiated a $3 billion revolving intra-African oil trade financing program aimed at funding the acquisition of refined petroleum products for African and Caribbean purchasers.
As a rotating facility, our aim is to support between $10 billion and $14 billion worth of Intra-African petroleum imports. The program aims to utilize the increasing refining capabilities that Afreximbank has assisted in developing throughout Africa. At the same time, this initiative will be consistent with the goals set out under the African Continental Free Trade Area (AfCFTA) accord, focusing on enhancing intra-African commerce, fostering industrialization, and generating employment opportunities within the region.
Through the implementation of advanced trade financing and supply chain solutions customized for major stakeholder requirements regarding duration, pricing structure, and logistical demands, this program aids Afreximbank in achieving its strategic objectives. These include enhancing energy security, bolstering regional production networks, and promoting economic stability across both the African continent and the Caribbean region.
Afreximbank serves as the primary financial backer for the Dangote refinery, which began operations in January 2024. The bank is also aiding in funding the construction of the 200,000 barrels per day (bpd) Lobito Refinery, following up on its earlier assistance with the 60,000 bpd Cabinda Refinery project. Additionally, Afreximbank has provided funds for the renovation of the 210,000 bpd Port Harcourt Refinery and most recently endorsed finance for both the Bua Refinery and Azikel Refinery projects, all located within Nigeria.
These investments, along with ongoing trade financing for the Société Ivoirienne de Raffinage (SIR) in Côte d'Ivoire, have enabled Afreximbank to move towards establishing more than 1.3 million barrels per day of refining capacity. This initiative aims to transform the Gulf of Guinea region from being primarily an exporter of crude oil into a significant refining center not only for Africa but also for global markets.
The key items to be exchanged through this program include refined petroleum products such as, but not limited to, Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Heavy Fuel Oil (HFO), Jet Fuel, and Kerosene. Only refineries based in Africa qualify as eligible exporters.
The $3 billion Revolving Intra-African Oil Import Financing Program aims primarily to offer essential trade financing to oil dealers (including both African-based and global entities), financial institutions, and governments—represented through their Treasury Department or Ministry of Petroleum Resources/Energy—as well as state-run organizations tasked with importing processed petroleum goods. This program supports these entities in sourcing finished products from intracontinental refineries for distribution across Africa and exploring potential export possibilities when relevant.
Afreximbank, through its associated trading arm ATDC Minerals (ATMIN), will actively engage in trade and financial operations alongside prominent African oil trading firms. These companies have longstanding relationships with Afreximbank and are anticipated to back this initiative.
Once an application is approved, the individual can make requests using the Global Limit within specified sub-limits after receiving KYC approval and fulfilling all necessary preconditions.
- Issuing/Confirming Letters of Credit or any suitable trade instrument where African refineries are the beneficiaries
- Exclusion of Letters of Credit or any accepted trade instrument for the advantage of African refineries
– Advance payments and direct funds provided to qualifying refineries across Africa
Professor Benedict Oramah, President and Chairman of the Board of Directors at Afreximbank, commented on the launch stating that this initiative "will energize attempts to transform the Gulf of Guinea into a major refining center." He emphasized that apart from boosting the production and consumption of refined petroleum products in Africa, the program would significantly influence various aspects of the continent’s downstream petroleum industry. It aims to spur essential investments in maritime transportation and logistical services for both internal and external African commerce involving crude oil and processed fuels. This ripple effect will extend to areas such as marine cargo insurance and related industries within the field. The ultimate objective is to raise the percentage of approximately 4 million barrels per day of crude oil extracted in the Gulf of Guinea that undergoes refinement on the African continent.
In his remarks about the initiative, His Excellency Dr. Lazarus Chakwera, President of the Republic of Malawi, stated: "This program clearly shows Africa's commitment to taking control of its energy destiny. We appreciate Afreximbank for stepping in at just the right time; it promises significant benefits for nations such as Malawi by lessening reliance on imports, bolstering local supply networks, and retaining greater wealth within the region. Above all, it will make a tangible difference for our people through providing them with steadier and cheaper access to processed fuel supplies—vital components for both everyday living and economic activity in Malawi."