Ghana launches $12 billion oil refinery project to strengthen regional leadership

Ghanaian President Nana Akufo-Addo has inaugurated the construction of a new oil refinery with a capacity of 300,000 barrels per day, aiming to establish Ghana as a significant petroleum hub in West Africa.

Despite the ambitious plans, critics have expressed concerns about potential shortcomings of the project. Ghana, the world’s second-largest cocoa producer, began oil production in 2010 and currently produces around 132,000 barrels of crude oil per day, along with 325 million standard cubic feet of natural gas daily, according to Reuters.

“This project is poised to become a cornerstone of our nation’s economic development,” President Akufo-Addo stated last week, at the project site in Jomoro, a southwestern city where the refinery will also feature petrochemical plants.

The first phase of the project, estimated at US$12 billion, will be financed and constructed by a consortium that includes Touchstone Capital Group Holdings, UIC Energy Ghana, China Wuhan Engineering Co., and China Construction Third Engineering Bureau Co.

This petroleum hub has the potential to create up to 780,000 jobs and boost Ghana’s GDP by 1.5 percent annually. Collaborating with educational institutions to develop training programs could help prepare the local workforce. Additionally, supporting small and medium-sized enterprises (SMEs) within the supply chain could foster inclusive economic growth, inspired by successful models from countries like the UAE and Saudi Arabia.

Refining 300,000 barrels of oil daily could reduce Ghana’s dependence on imports and stabilize fuel prices. Integrating renewable energy sources such as solar and wind – similar to Brazil’s emphasis on biofuels – could promote a diversified energy mix in line with global trends.

The petroleum hub has the potential to position Ghana as a leading energy supplier in West Africa, enhancing regional cooperation. By investing in infrastructure and forming strategic partnerships with neighboring countries, Ghana could secure markets for its refined products. Emulating successful strategies from Singapore, such as competitive pricing and reliable supply chains, could further strengthen Ghana’s regional influence.

Currently, West Africa consumes approximately 800,000 barrels of oil daily, with nearly 90 percent of that being imported, according to the African Refiners and Distributors Association. Ghana’s petroleum hub project aims to meet the region’s demand for refined products and by-products by 2036, as specified in an agreement signed in June 2018.

Ghana is also a member of the African Continental Free Trade Area (AfCFTA).