Africa's richest man, Dangote, proposes $17B refinery in Kenya despite Ruto's hopes for a regional joint project

Aliko Dangote, Africa’s wealthiest businessman, is moving forward with plans to build a $17 billion oil refinery in Kenya, marking a significant step in addressing East Africa’s energy challenges.

• The refinery would have a production capacity of 650,000 barrels per day and reduce reliance on imported petroleum products.
• Aliko Dangote plans to build a $17 billion oil refinery in Mombasa, Kenya to address East Africa’s energy needs.
• Mombasa is favored for its superior port infrastructure and Kenya's larger economy and higher refined product consumption.
• Dangote's move shifts regional strategy away from a joint Tanzanian project, aiming to strengthen energy security and expand his business empire.

The refinery, with a projected capacity of 650,000 barrels per day, aims to reduce the region's dependence on imported refined petroleum products, especially as ongoing geopolitical tensions expose vulnerabilities in the supply chain that currently accounts for most of its energy needs.

In an exclusive interview with The Financial Times, Dangote expressed his preference for Mombasa, Kenya’s coastal city, as the location for the facility, highlighting the port’s superior infrastructure. “I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port,” Dangote said.

He also pointed out Kenya’s larger economy and higher consumption of refined products, further strengthening the case for Mombasa as a strategic location. “Kenyans consume more. It’s a bigger economy,” he added.

A Crucial Investment for East Africa

The proposed refinery, estimated at $15 billion to $17 billion according to The Financial Times, would be one of the largest industrial investments in East Africa.

It would outshine Uganda's partnership with UAE-based Alpha MBM Investments, which is developing a $4 billion, 60,000-barrel-per-day refinery in Kabaale, Hoima District, aiming for operations between late 2029 and early 2030.

Currently, East and Central Africa has only one operational refinery, a stark contrast to regions such as South Africa, which has seven refineries, North Africa with 21, and West Africa with 14.

While the proposed refinery will not match Dangote’s 650,000-barrel-per-day facility in Lagos, Nigeria, which is expanding to 1.4 million barrels per day, surpassing India’s Jamnagar Refinery; it would still make a significant contribution to addressing the region’s escalating energy needs.

Regional Context: Tanga Proposal and Geopolitical Pressures

The refinery proposal comes amidst ongoing discussions about a potential joint refinery in Tanga, Tanzania.

Previously, Dangote had committed to supporting the construction of an oil refinery in Tanzania, pledging that his group would take the lead and complete it within four to five years.

This regional refinery would process oil from neighboring countries, including Kenya, South Sudan, and Uganda.

President William Ruto of Kenya confirmed these talks at the Africa We Build Summit in Nairobi in April.

“That refinery will process oil from the DRC, Kenya, South Sudan, and Uganda. We will then build a pipeline from Tanga to Mombasa, allowing finished products to move through infrastructure we jointly own with Uganda,” Ruto said.

However, Tanzania's President Samia Suluhu expressed surprise at the announcement, revealing that she had not been consulted about the project before President Ruto made it public.

Ironically, while Ruto had initially hoped for a collaborative, regional project, Dangote’s decision to focus solely on Kenya marks a significant shift in the regional energy strategy.

“The ball is in the hands of President Ruto,” Dangote said. “Whatever President Ruto says is what I’ll do,” he added.

Should the Dangote refinery move forward, it would bolster East Africa’s energy security by reducing the region’s dependency on external fuel imports.

Furthermore, the refinery fits into Dangote’s broader strategy of expanding his conglomerate into a $100 billion enterprise by 2030, with plans to double the production capacity of his refineries.