A New Approach to Energy Security in Africa

Recent geopolitical instability has underscored a critical vulnerability for many African nations: dependence on volatile global fuel markets. While oil production often promises energy security, the reality can be quite different—particularly when downstream infrastructure lags behind.

Nigeria’s experience exemplifies this paradox. Despite being a major crude producer, the country spent record amounts on imported refined petroleum in 2024 alone, with import costs more than doubling year-over-year according to official data. This highlights how production capacity doesn’t automatically translate to market resilience.

Kenya’s Solution: A Government-to-Government Framework

Kenya has navigated recent volatility more effectively through a strategic procurement model introduced in April 2023. Recognizing that petroleum imports were straining foreign exchange reserves, the government shifted from a tender-based system to direct agreements with major Gulf suppliers (Aramco, ADNOC, and ENOC) on extended credit terms.

The framework’s design is particularly noteworthy: it combines sovereign de-risking with private sector execution. While governments provide guarantees and establish supply channels, actual procurement rests with trusted local companies—Gulf Energy, Galana Energies, and Oryx Energies—selected for their established relationships and operational track records.

Key Benefits of Kenya’s Approach:

• Enhanced resilience: Direct agreements provide greater stability than reactive spot buying
• Improved market consistency: More predictable supply reduces price fluctuations
• Foreign exchange relief: Deferring dollar payments eases pressure on reserves
• Strategic partnerships: Builds stronger ties with key global suppliers

This model demonstrates that energy security isn’t solely about production volume—it’s about building resilient systems that can withstand external shocks. As other African nations seek to strengthen their own energy positions, Kenya’s experience offers a promising case study in proactive procurement architecture.