Ghana has officially commenced the construction of a state-of-the-art oil refinery with a capacity of 300,000 barrels per day (bpd), aiming to establish itself as the petroleum hub of West Africa. The announcement was made by Ghanaian President Nana Akufo-Addo on Monday, August 19, 2024.
Since becoming an oil producer in 2010, Ghana, the world’s second-largest cocoa producer, has steadily increased its oil output, which currently stands at approximately 132,000 bpd of crude oil and 325 million standard cubic feet per day of natural gas.
“This project promises to be a cornerstone of our nation’s development,” President Akufo-Addo stated during a ceremony at the project site in Jomoro, a southwestern city. In addition to the refinery, the site will also house petrochemical plants, further boosting the country’s industrial capabilities.
The first phase of this ambitious project, which carries a price tag of $12 billion, will be financed and constructed by a consortium comprising Touchstone Capital Group Holdings, UIC Energy Ghana, China Wuhan Engineering Company, and China Construction Third Engineering Bureau Company, according to the president.
West Africa currently consumes about 800,000 bpd, nearly 90% of which is imported, according to the African Refiners and Distributors Association. The new refinery is intended to supply sufficient refined products and by-products to meet the region’s needs by 2036, as outlined in an agreement signed in June 2018.
However, the project has met with skepticism and opposition. Bright Simons, Vice President at the Accra-based think tank IMANI Africa, expressed doubts about the consortium’s capacity to deliver. “The consortium behind the project is not primed for investment, and the project lacks a bankable business plan,” Simons said. “Our position is that this is a speculative attempt to grab a landbank for cheap.”
In addition, some residents of the proposed 20,000-acre project site have protested, demanding that the refinery’s footprint be reduced to 5,000 acres. Oliver Barker-Vormawor, a senior partner at a law firm representing affected farmer cooperatives, stated that his clients remain firm in their opposition. “The abrasive manner in which the government is proceeding discounts valid concerns around the social and environmental impact of the project, the livelihoods at risk due to the displacement of farmers, and the unresolved questions of ownership and community land rights,” Barker-Vormawor emphasized.
The government, however, has dismissed these concerns, pointing to petitions from other residents who support the project.
