After efficiently launching Nigeria’s solely operational oil refinery in 2024, billionaire businessman Aliko Dangote has set his sights on East Africa as the subsequent location for an additional mega refinery mission, in response to current studies.
It comes as African nations are actively searching for methods to make power safer, following enormous international disruptions amid the US and Israel’s battle on Iran and Tehran’s subsequent closure of the Strait of Hormuz, by way of which about 20 p.c of the world’s oil and pure fuel is shipped.
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Dangote, Africa’s richest man, seemed to be one of many winners from this fallout when his newly operational refinery, positioned in Nigeria’s business Lagos State, started promoting giant volumes of crude oil throughout the continent because the battle on Iran escalated in March and international oil costs soared.
At current, West, South and East Africa rely totally on importing refined petroleum merchandise from the Center East, which means they’re extremely susceptible to disruptions there.
Neighbours of Nigeria – Cameroon, Togo, Ghana and even Tanzania, additional to the east – are among the many nations which have turned to Nigeria as provides from the Center East dry up.
By the top of March, the refinery, which has the capability to supply 650,000 barrels per day (bpd), reported it was additionally receiving orders from past the continent, particularly for severely scarce jet gasoline as a whole lot of flights had been cancelled throughout areas.
Provide from Dangote’s refinery has cushioned the impression of the battle when it comes to gasoline provide for Nigeria and neighbouring nations, analysts say.
Nigeria is Africa’s largest oil producer, and the $19bn mission in Lagos is at the moment the world’s largest single-train refinery, which means it employs a single processing line slightly than a number of models. But it surely hit full manufacturing capability in February 2026, the identical month the battle with Iran began.
Nigeria has no purposeful state-owned refinery, so Dangote’s refinery is now positioning the nation to be a internet exporter of jet gasoline and diesel.
Right here’s why extra refining capability in Africa issues for the continent:
What’s Dangote’s plan for an East Africa refinery?
In April, Kenya’s President William Ruto introduced that East African nations had been in talks to construct a joint oil refinery at Tanzania’s Tanga port, which might have an analogous capability to Dangote’s Lagos operation.
“We don’t wish to be held hostage any extra by the Strait of Hormuz,” Ruto mentioned at a Nairobi enterprise occasion in April, which Dangote was current at.
“We don’t wish to be held hostage by wars which might be began by different folks. We have now our sources right here, and we’re saying we’re going to use our African sources to industrialise our area.”
In an interview with the Monetary Occasions on Sunday, nonetheless, Dangote mentioned he would like to construct the brand new operation in Kenya slightly than Tanzania.
“I’m leaning extra in the direction of Mombasa as a result of Mombasa has a a lot bigger, deeper port,” the billionaire advised the UK newspaper.
“Kenyans devour extra. It’s an even bigger financial system,” he mentioned, including that “the ball is within the palms of President Ruto … No matter President Ruto says is what I’ll do.”
He has projected development prices of between $15bn and $17bn.
However venturing into East Africa, which has a really completely different business panorama from West Africa, might show a problem, analyst Dumebi Oluwole of Lagos-based intelligence agency Stears advised Al Jazeera.
“Dangote has confirmed it [his operation] can construct at scale,” she mentioned. “The East African take a look at will likely be whether or not it may well additionally navigate the political and logistical panorama of a fragmented, multi-country market.”
Why aren’t African nations already producing extra oil?
Regardless of having sizeable crude reserves, African nations solely refine about 44 p.c of the full oil consumed themselves, with imports making up the remainder, in response to a 2022 African Union report.
The highest producers of refined oil are Algeria, Egypt and South Africa. There are about 21 refineries in North Africa.
Southern Africa has one other seven, whereas West Africa has 14. Nonetheless, most refineries within the two areas are both not working or are producing beneath the capability they’re outfitted to.
East Africa’s solely present refinery is in Mombasa, nevertheless it stopped working in 2013 as a consequence of a mix of sluggish authorities insurance policies and exiting buyers, who deemed it commercially unviable consequently.
There may be at the moment no refining capability in any respect in East Africa, regardless of the area having about 4.7 billion barrels of crude reserves, in response to the African Union, primarily in Uganda, South Sudan, Kenya and the Democratic Republic of the Congo.
Kenya imported 40 million barrels of petroleum in 2025. It often buys oil from the UAE, Saudi Arabia, India and Oman, all of which have been hampered by Iran’s closure of the Strait of Hormuz.
Nigeria itself is Africa’s greatest internet crude producer with a 1.5 million to 1.6 million bpd capability. The nation has not refined meaningfully since 2019.
What distinction will native refineries make for African nations?
Exporting most of its crude to then import refined merchandise is dear and places Africa on the again foot, analyst Oluwole mentioned.
Extra oil refined on the continent would imply decrease petrol pump costs, decrease transport prices, and extra power obtainable for folks and companies, in concept. It might additionally imply better entry to by-products like fertilisers for farmers, for instance, or petrochemicals for producers.
“Dangote has demonstrated {that a} viable, scalable, intra-African power provide possibility is feasible – that proof of idea issues enormously,” mentioned Oluwole.
“It displays a rising continental conviction that Africa can present for itself, and that that is not wishful pondering,” she added.
In Nigeria’s case, Dangote’s refinery is but to ease pressures, although. Native airways, for instance, have complained about having to pay excessive costs for jet gasoline even with improved native provides. Analysts say that may very well be as a result of Nigeria’s authorities eliminated gasoline subsidies in 2023. Paperwork throughout the state oil firm additionally compelled Dangote’s refinery to import crude.
Nonetheless, the refinery is contributing to “a extra clear and aggressive market”, Oluwole mentioned, including that outcomes ought to finally present.
Different nations are stepping up. Final week, Angola’s $470m Cabinda refinery started supplying home in addition to international markets. The mission is owned primarily by the UK’s Gemcorp Capital and has a capability of 30,000bpd, with plans to double by the top of 2026.
Dangote’s deliberate refinery in Kenya, if accomplished, might additionally assist to cut back East Africa’s reliance on the Center East.
A separate, government-funded refinery mission in Uganda’s Hoima area can be within the works. Authorities anticipate the mission to have the ability to refine 60,000bpd when it begins operations in 2029. It will likely be fed by the joint Uganda-Tanzania East African Crude Oil Pipeline (EACOP), an ongoing mission which can transport crude from Uganda’s Lake Albert to Tanzania’s Tanga Port.
Uganda additionally plans to supply diesel, jet gasoline, kerosene and Liquefied Petroleum Gasoline (LPG).
With huge plans in place, Oluwole says it’s now left to African governments to create enabling enterprise environments for the personal sector.
“Dangote has opened the door,” she mentioned. “The query now could be whether or not African establishments and governments will stroll by way of it.”
