Nigeria’s petrochemical import bill, which reached nearly $1.82 billion in 2024, has reignited calls for greater investment in domestic processing and value addition to reverse decades of dependence on foreign-manufactured products.
Despite having abundant natural gas reserves and a fast-growing population that should make the country a natural hub for petrochemical production, experts say Nigeria continues to lose billions of dollars yearly through the export of raw feedstock and the import of finished plastic products.
In a presentation made available to The Guardian, the Executive Secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, described Nigeria’s petrochemical landscape as “a paradox of potential and underutilisation.” He noted that while petrochemicals form a critical backbone of industrial economies, accounting for 95 per cent of all manufactured goods, Nigeria remained heavily import-dependent due to the absence of sufficient in-country upgrading facilities.
“Nigeria continues to flare or export feedstock that could otherwise support a thriving petrochemical industry. We export methane, propane and naphtha, which are then upgraded abroad and resold as finished products, even as local industries struggle,” Kragha said.
According to ARDA data, Nigeria exported between 300,000 and 400,000 tonnes of propane yearly, around half of which goes to China for conversion into polypropylene and hydrogen. Similarly, significant volumes of naphtha, used in the production of plastics and chemicals, are shipped abroad. The country’s refining system, historically inefficient and under-maintained, has exacerbated this cycle of value loss, making Nigeria one of Africa’s largest importers of plastic products despite its status as a major crude producer.
The economic implications of this imbalance are enormous. Data from Trading Economics showed that plastics rank among Nigeria’s top 10 import categories, reflecting a structural gap in domestic manufacturing. With foreign exchange scarcity and rising global freight costs, this dependency has placed further pressure on the naira and Nigeria’s trade balance.
Beyond the financial strain, ARDA warned that continued reliance on imported petrochemicals undermines industrialisation and energy transition goals.
“By flaring or exporting gas and natural gas liquids, Nigeria forfeits opportunities to create jobs, expand its manufacturing base, and reduce carbon-intensive global shipping,” Kragha stated.
He added that the emissions generated from transporting feedstock to Asia and importing finished goods back to Africa significantly increase Nigeria’s carbon footprint—an irony for a country seeking to meet global sustainability targets.
Despite these challenges, the ARDA chief acknowledged that the success of Indorama’s Eleme Petrochemical Company in Port Harcourt and the imminent operations of Dangote Petrochemical Plant in Lagos offer glimpses of what a reformed petrochemical sector could achieve.
Indorama, which acquired the moribund Eleme plant in 2006, has become the continent’s second-largest producer of polyethene and polypropylene. The firm’s exports now reach multiple African markets, proving that Nigerian gas and feedstock can support globally competitive petrochemical production.
Similarly, the Dangote Petrochemical complex, built alongside the 650,000 barrels-per-day refinery, is designed to produce polypropylene and polyethene to serve Nigeria’s plastics, textiles and packaging industries. Analysts believe the project could slash import dependence and reposition Nigeria as a key supplier within Africa’s petrochemical value chain.
However, industry experts stressed that without robust policy alignment, infrastructure investment and energy supply stability, the full potential of these plants may not be realised. Kragha urged Nigeria to promote harmonised energy policies and ensure alignment between upstream gas production and downstream industrial use, noting that “energy security and industrial development must move together.”
Beyond the refining and petrochemical complexes, Kragha identified inadequate infrastructure and regulatory uncertainty as persistent deterrents to investors. Many African nations, including Nigeria, lack sufficient refining and storage capacity, forcing them to rely on imports even for basic refined products.
“Older refineries, insufficient storage, and weak distribution networks leave African markets vulnerable to supply disruptions,” he said, citing congestion at ports like Mombasa and Dar es Salaam as examples of systemic inefficiencies.
He called for targeted investment in refinery rehabilitation, pipeline modernisation, and storage facilities to strengthen regional supply chains. According to ARDA, aligning standards across Africa’s 54 countries would also create economies of scale and attract private capital into downstream infrastructure.
With the African population projected to hit 2.5 billion by 2050, and Nigeria expected to become the world’s third-most populous nation, Kragha warned that demand for petrochemical-based goods, fuels and industrial materials would surge exponentially.
“If Nigeria does not expand local refining and petrochemical capacity, import bills will continue to rise, jobs will remain offshore, and the country’s energy transition will remain externally dictated,” he said.
ARDA’s broader strategy, as outlined at the summit, is to promote an intra-African oil and gas industry that emphasises cleaner transport fuels, local value addition, and energy security. This includes harmonising fuel specifications under the AFRI-6 standards and integrating sustainability initiatives like Sustainable Aviation Fuel (SAF) production using existing refinery infrastructure.
Ultimately, Kragha believed that Nigeria can transform from an import-dependent market to a regional industrial hub if the right incentives and policies are enacted. The combination of vast gas reserves, population growth and emerging local champions such as Dangote and Indorama provides a foundation for a diversified, resilient petrochemical sector.
“The opportunity before Nigeria is immense. By ending flaring, maximising domestic feedstock utilisation and expanding petrochemical capacity, the country can unlock new industries, reduce imports, and drive sustainable economic growth,” Kragha said.
