Aliko Dangote, Nigeria’s leading industrialist, has indicated a preference for Kenya as the location for his planned $15 to $17 billion oil refinery, which is expected to process up to 650,000 barrels of oil per day. This decision comes in the wake of a diplomatic dispute with Tanzania, where an earlier proposal aimed to establish the plant in the coastal city of Tanga. In an interview with the Financial Times, Dangote highlighted the logistical advantages of Mombasa’s deep-water port compared to Tanga, noting that it would facilitate direct shipping of crude oil to the refinery without the need for a lengthy 1,500-kilometer pipeline from Uganda’s oil fields. He also pointed out that Kenya’s larger economy and higher fuel consumption make it an appealing site for the refinery, although he mentioned that the final decision would depend on Kenyan President William Ruto.
The situation has been further complicated by Tanzanian President Samia Suluhu Hassan’s recent dissatisfaction with the initial plans for the refinery. She conveyed her concerns to her Kenyan counterpart, indicating that she had not been consulted about the project, particularly during an infrastructure summit held last month in her absence. Dangote stated that the project’s advancement hinges on Kenya providing suitable land, securing financing from regional partners, and ensuring protection against what he referred to as the “dumping” of cheap fuel from countries like Russia and India. He warned that “no refinery can survive without that protection,” suggesting that if these conditions are met, construction could commence within the year. However, he also left the door open for a Tanzanian location if the country can resolve its internal disagreements.
The proposed refinery is poised to become the world’s largest single-train facility, rivaling the capacities of major global players. Dangote’s existing Lagos refinery, completed in 2015 after a decade of construction, operates at full capacity and has become a crucial supplier of petrol, diesel, jet fuel, and urea fertilizer across Africa. Its output has helped Nigeria avoid the fuel shortages that have affected other nations on the continent and has attracted premium sales of jet fuel to European airlines facing reduced supplies from the Strait of Hormuz.
Kenyan officials have welcomed the potential project, with President Ruto praising Dangote’s ambition as a testament to the capabilities of African entrepreneurs in delivering large-scale projects. He remarked, “When you look at Nigeria, there were long queues at the pumps until an African stepped forward and built a refinery,” referring to Dangote’s success. The industrialist, who has built his wealth through commodities such as salt, sugar, and cement, plans to double the capacity of the Lagos refinery to 1.4 million barrels per day, aligning it with India’s Reliance Industries. He estimates that within 30 months, the combined capacity of his African operations could account for about 10 percent of U.S. refining capability, positioning his group as a price-setter in regional markets.
The refinery proposal reflects a broader trend toward African-led energy infrastructure development at a time when global fuel markets are experiencing volatility and many countries are grappling with supply disruptions. If Kenya grants the necessary concessions, the project could significantly transform the East African oil landscape, create thousands of jobs, and reduce the region’s reliance on imported refined products. The next steps will depend on negotiations between the Dangote Group and the Kenyan government, with President Ruto’s decision poised to determine the ultimate location of the venture.
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