Dangote to Proceed with $16bn Kenya Refinery Amid Land Protests

Nigerian billionaire Aliko Dangote and Kenyan President William Ruto are preparing to break ground on a $16 billion oil refinery in Lamu, Kenya’s northern coast, despite ongoing demonstrations by local residents demanding higher land compensation.

Upon its completion, the facility is projected to process 700,000 barrels of crude oil daily, establishing it as the largest industrial project in East Africa by capacity. Construction officially begins on November 1, with operations expected to start by 2030.

The Lamu refinery represents Kenya’s most significant infrastructure undertaking since independence, exceeding the cost of the $5.1 billion Standard Gauge Railway. Currently, the East African region lacks any operational oil refineries.

During an interview with BBC Focus on Africa, Dangote downplayed the protests, characterizing them as efforts by external marketers and international actors to disrupt the project. He argued that residents should support the development rather than oppose it, stating, “Have you ever seen people demonstrating against themselves in terms of development?”

Dangote also addressed concerns regarding employment, noting that the project will generate 60,000 jobs at peak construction. He rejected the notion of using automated systems for labor, emphasizing that local communities will benefit from the workforce opportunities.

Critics have questioned the strategic location of the refinery in Kenya, which is not an oil-producing nation. Suggestions have been made to locate the facility in Tanzania or Uganda, both of which are preparing to export oil via the East African Crude Oil Pipeline.

However, Kenyan Energy and Petroleum Minister Opiyo Wandayi clarified that the refinery would not rely on regional crude. “Refineries get crude oil from the market. And the market is open,” he told the BBC.

Dangote supported this view by pointing to Singapore, a country that produces no oil yet hosts numerous refineries, as a precedent for importing crude for processing.

The project also includes a 1,000-megawatt power plant, addressing what Dangote identifies as a critical bottleneck to industrialization across the continent. He outlined broader ambitions to develop 10,000 megawatts of power generation capacity across Africa by 2030, with plans to potentially double that figure based on demand.

While Kenya currently faces high fuel prices, analysts note that international crude oil markets remain the primary determinant of pump prices. The Lamu facility is Dangote’s largest proposed investment outside his home country of Nigeria, where his existing refinery also handles 700,000 barrels per day. Dangote recently raised up to $2.1 billion through the flotation of 4.1 million shares, with plans to double the capacity of his Nigerian operation.