LAMU, Kenya — Nigerian industrialist Aliko Dangote on Wednesday broke ground on a $16 billion oil refinery in Lamu, Kenya, a project designed to process 700,000 barrels of crude oil per day and supply refined petroleum products to markets across East Africa.
The groundbreaking was attended by President Yoweri Kaguta Museveni of Uganda, Kenyan President William Ruto, Ethiopian Prime Minister Abiy Ahmed and other African leaders.
The refinery is expected to be completed by 2030 and is intended to reduce East Africa’s dependence on imported refined petroleum products while supporting regional industrialisation. Dangote has offered regional governments a combined 30% equity stake in the project.
Speaking at the ceremony, Museveni backed the development of a regional refinery, saying Uganda had long opposed the export of raw materials without value addition.
“I informed him that from the very beginning, we have always opposed the export of raw materials without value addition,” Museveni said, referring to discussions with Dangote.
“That is why Uganda delayed oil production because we insisted on first having a refinery. Without refining our oil, it would not make economic or strategic sense to simply export crude oil while others benefit from the finished products.”
Museveni said Uganda welcomed a larger regional refinery alongside its own planned refinery in Hoima, arguing that regional cooperation would make such investments more viable.
“I therefore welcomed the idea of a bigger regional refinery because our objective is African integration and shared prosperity,” he said.
Ruto, who has supported the Lamu investment, credited Museveni with helping advance the project.
“I want to thank our father, President Museveni,” Ruto said, describing him as a key figure in bringing the project to where it is.
Dangote said the project was intended to help Africa move away from exporting crude and other raw materials while importing finished products.
The refinery is expected to supply markets including Kenya, Uganda, Rwanda, Ethiopia, Tanzania, South Sudan and the Democratic Republic of Congo. The project is also projected to generate tens of thousands of jobs during construction. Reuters reported that the project is expected to create more than 50,000 jobs, while Dangote has cited a figure of about 60,000.
Dangote said the refinery would be built with technology and engineering support from international partners. Engineers India Limited has secured a $450 million engineering contract for the project, according to Reuters.
The project, however, faces a legal challenge over land.
A Kenyan court has issued orders requiring the status quo to be maintained following a petition by local residents challenging aspects of the project, including land ownership and compensation. The legal action has not stopped the groundbreaking ceremony, although Dangote Group acknowledged that the court proceedings could affect some site activities.
The refinery is expected to replicate the 700,000-barrel-per-day capacity of Dangote’s refinery in Nigeria. The company says the Lamu facility will help increase regional energy security by producing petroleum products closer to their markets.
The Lamu project comes as Uganda, Kenya and other East African countries pursue greater control over crude oil processing, fuel supply and regional petroleum infrastructure.
For Uganda, the project will exist alongside the planned 60,000-barrel-per-day refinery at Kabaale in Hoima, as the country moves towards commercial oil production and domestic refining.
