Evans Muata is the Vice President of the African Refiners and Distributors Association (ARDA) and Chief Executive Officer of INDENI Petroleum Refinery Ltd in Zambia. In this interview with KINGSLEY JEREMIAH, Muata speaks on many issues, including the underperforming refineries in Africa, production of dirty fuel and the ambition to scale refining capacity by 3.9 million barrels per day.

Some stakeholders argue that Africa’s problem is not necessarily a lack of refineries, but the underperformance of existing ones. For example, Nigeria has about 445,000 barrels per day of state-owned facilities that remain underutilised. Similar situations exist in other African countries. Do we really need more refineries, or do we need to simply fix what existing ones?
That is a very important question. On paper, Africa does have refining capacity. However, capacity alone is not the issue; functionality is. Many of these refineries are either partially operational or completely idle due to maintenance challenges, outdated technology and lack of investment.

Furthermore, refining is not static. The industry evolves, particularly in response to environmental standards. Producing cleaner fuels, such as low-sulphur products, requires significant upgrades. These upgrades involve advanced equipment, high-pressure systems, specialised catalysts and substantial hydrogen inputs. All of this comes at considerable cost.

For many state-owned refineries, such investments are simply not viable. The return on investment may take decades, sometimes 40 to 50 years, which is not attractive to either governments or private investors. As a result, these facilities gradually become obsolete.

So yes, Africa needs refining capacity, but it must be modern, efficient, and commercially viable. In some cases, it may be more practical to build new refineries rather than retrofit ageing ones.

Most refineries in Africa produce high-sulphur or dirty fuel. Upgrading refineries to produce low-sulphur fuels is extremely expensive. How does this impact the economics of refining in Africa?
The cost implications are substantial. Moving from high-sulphur to low-sulphur fuel production requires advanced processing units, higher-grade materials, and significant energy input. For example, equipment must withstand high pressure and temperature, catalysts must be highly active, and hydrogen production often occurs through steam methane reformers, which adds further expense.

These factors dramatically increase capital expenditure. For many older refineries, the economics simply do not work. As I mentioned earlier, the payback period can be several decades, which discourages investment.

This is one reason why many African refineries have continued to produce higher-sulphur fuels. However, this creates another problem: such products are increasingly non-compliant with global standards and cannot compete with cleaner imports.

What are the implications for consumers?
Unfortunately, consumers often bear the consequences. Cleaner fuels are more expensive to produce, and those costs are typically passed on to end users. In markets where low-sulphur fuel is required such as regions with intensive mining operations, the demand for cleaner products can drive up prices.

In some cases, governments may attempt to cushion the impact through subsidies or tax adjustments, but these measures are not always sustainable. Ultimately, there is a trade-off between environmental standards and affordability.

The African Refiners and Distributors Association (ARDA) said Africa may require six refineries on the scale of Dangote’s facility beyond what already exists. The estimated cost of such an undertaking could be as high as $120 billion. Considering what Dangote sacrificed in building his refinery, how realistic is it to replicate the model across the continent?
It is certainly ambitious, but not unrealistic. If you examine the journey of Dangote, particularly in the early stages of the project, there was widespread scepticism. Many people doubted whether a refinery of that scale could ever be successfully delivered in Africa. The prevailing sentiment at the time was that such a complex and capital-intensive project was simply beyond the continent’s capacity.

However, what Dangote demonstrated was a combination of vision, persistence, and a deep alignment between market need and strategic execution. That convergence between identifying a clear demand gap and having the determination to address it is what ultimately made the project viable. It is not merely about capital; it is about conviction and long-term thinking.

I believe Dangote has proven that such projects are possible, and there is every likelihood that he could scale further, potentially positioning himself as a central refining hub for Africa, or even establishing additional refining centres across the continent. The timing has also been significant. With increasing global supply risks—particularly given geopolitical tensions in regions such as the Middle East, the Dangote refinery has emerged at a critical moment. It offers a glimpse into how Africa might insulate itself from external shocks.

So yes, while the scale of investment required is enormous, I do not doubt that such an ambition can be realised. The demand for refined petroleum products across Africa is substantial and growing. The challenge lies not in the absence of opportunity, but in structuring bankable projects.

Many banks were reluctant to support the Dangote refinery at its inception. Do you think similar projects would attract investment today or will they still face the same scepticism?
The scepticism was very real. At the early stages of the Dangote project, many financial institutions declined involvement. From a traditional banking perspective, it did not meet the usual thresholds for risk assessment or compliance. Yet, the project went ahead and ultimately proved its viability.

That experience offers an important lesson. What appears unbankable at first glance can become viable with the right structure, leadership, and long-term vision. For future projects, I think there is now greater awareness and perhaps more willingness to engage, but financing will still require innovation.

It is unlikely that a single investor would shoulder such a burden alone. The risks are simply too high. Instead, we need aggregated capital, combinations of private equity, institutional investors, public offerings, and potentially strategic partnerships. For example, initial public offerings (IPOs) could play a role in pooling resources from multiple investors.

The key is to diversify funding sources. While pension funds may be considered too risk-averse for such ventures, there are other pools of capital that can be mobilised. Ultimately, the market fundamentals are strong: Africa’s population is young, growing, and increasingly urbanised, and the energy demand will only continue to rise.

Do you see private industrialists leading this transformation? Or is there still a role for governments in developing refining capacity?
In practical terms, it will be very difficult for governments to lead such initiatives successfully, particularly given competing fiscal priorities. Across Africa, including Nigeria, we have seen government-owned refineries struggle, despite significant investment. Many of these facilities were originally conceived as strategic national assets rather than profit-driven enterprises.

Over time, however, the lack of commercial discipline, insufficient maintenance, and limited reinvestment have led to underperformance. Governments often face difficult choices: whether to allocate scarce resources to healthcare, education, or infrastructure, or to invest in upgrading refinery equipment. In many cases, social needs understandably take precedence.

Private capital, on the other hand, operates with a clear focus on returns. Investors require defined revenue models and operational efficiency. Therefore, I believe the future of refining in Africa will be driven primarily by private sector participation, supported, but not dominated, by government policy frameworks.

Another concern is crude oil supply. Much of Africa’s oil infrastructure was designed for export rather than domestic refining. If the continent expands its refining capacity, can it secure sufficient crude supply internally?
The current infrastructure reflects historical realities. At the time these systems were developed, domestic demand was relatively low, so exporting crude oil made economic sense. However, the situation is changing. Population growth, industrialisation, and urbanisation are driving higher energy consumption within Africa.

This creates a strong case for reconfiguring infrastructure. Pipelines and supply chains can be redesigned to prioritise domestic refining. It is ultimately a market-driven decision. If local demand becomes sufficiently strong, and all indications suggest it will, then investment will naturally shift towards serving that market.

Pipeline vandalism, political instability and regional conflicts have all disrupted energy infrastructure in parts of Africa. How significant is this risk?
Security is indeed a critical factor, but it is not insurmountable. Infrastructure anywhere in the world carries risk. The difference lies in how that risk is managed.

In some African countries, pipelines are well protected by specialised security forces, and incidents of vandalism are minimal. In others, the lack of adequate security measures has led to frequent disruptions. This is not a structural limitation; it is a governance and enforcement issue.

If appropriate security frameworks are put in place, these risks can be significantly reduced. It ultimately comes down to political will and institutional capacity.

What are your key takeaways from ARDA Week?
Several important points stand out. First, the discussions have highlighted Africa’s vulnerability to external supply disruptions. The reliance on imported refined products is a significant risk, particularly in times of global uncertainty.

Second, the issue of under-refining has become more evident. For many years, the prevailing view was that Africa should rely on large, centralised refineries outside the continent. That perspective is now being reconsidered.

Third, there is growing recognition of the need for regional solutions. Supporting projects like the Dangote refinery, as well as developing refining clusters across different parts of Africa, will be crucial.

Finally, there is a noticeable shift in mindset. African stakeholders are increasingly confident in defining their own strategies, rather than relying solely on external advice.

There is a stronger emphasis on mobilising domestic resources to meet domestic demand.

In essence, Africa is beginning to listen to its own voice. That, perhaps, is the most
significant takeaway of all.