May 26, 2023 [Business Insider]- Now more than ever, Africa needs to examine its options for reducing its energy expenses, as energy cost heavily influences the growth or decline of any given economy.
Energy cost is a key determinant of inflation, alongside basic amenities like food, water and other commodities distinct and essential to different regions.
For an economy to thrive, energy must be as cheap as possible. Unfortunately, this has hardly been the case in Africa for the past year.
The ensuing conflict between Russia and Ukraine has brought about a substantial spike in the cost of energy, globally.
Needless to say, for a developing continent like Africa, the brunt of this crisis is being felt to extensive degrees, as numerous countries on the continent for the past year have been dealing with some level of inflation.
The inflation, while spurred in parts by food hikes, and other nuanced factors, is still majorly a result of the rising cost of energy that has plagued the entire planet.
Africa hardly refines its own oil despite its tremendous oil reserves, which in hindsight has caused a gargantuan deficit in its oil bottomline.
Simply put, most oil-producing African countries, particularly Sub-Saharan African countries, sell their crude to countries outside the continent for a specific amount, and then buy back said oil in a refined state for a similar amount.
This in itself is as financially counter-productive as it gets, however, what makes things significantly worse is when external factors like war make the oil importation costs much more expensive. A plight which almost every African state suffered in the previous year.
It is also disturbing that this problem would persist for the next two years, as numerous global economists have hinted at the possibility of a recession this year.
With this in mind, the glaring solution to remedy this problem is to simply build refineries in Africa. Fortunately, this idea has not only been floating all across Africa for some time now, yesterday, it became a reality.
On Monday, May 22nd, 2023, Aliko Dangote triumphantly commsioned his massive oil refinery. The much awaited project represents an important turning point for the nation’s energy industry and Dangote’s ambitious endeavors.
Dangote’s dedication to meeting Nigeria’s domestic gasoline demand is demonstrated by the commissioning event, which was attended by Nigerian President Muhammadu Buhari.
With this new development, here are a few interesting facts to know about the Dangote oil refinery.
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