KENYA: The stage is set for the groundbreaking ceremony of the proposed $16 billion Dangote East Africa Petroleum Refinery and Petrochemicals Special Economic Zone in Mokowe, Lamu County, Kenya, on Wednesday.
The proposed refinery is expected to have a processing capacity of 700,000 barrels per day and is targeted for completion by 2030.
The facility is planned to process crude from Kenya’s Turkana oilfields, alongside supplies from other parts of Africa, and is expected to help reduce East Africa’s dependence on imported petroleum products.
Speaking to reporters in Nairobi on Tuesday, Africa’s richest man, Aliko Dangote, said the project was part of efforts to move Africa away from exporting raw materials and towards processing and selling finished products within the continent.
“By 2030, the majority of African countries will be self-sufficient. It does not matter where it is refined, but it should be in the African continent, on the soil of Africa,” Dangote said in response to a question on when Africa would no longer need to import fuel from outside the continent.
The industrialist also dismissed concerns surrounding the Kenyan project, which is planned for Lamu’s Indian Ocean coast and has faced opposition from environmental groups, including Greenpeace, as well as a land-rights court case.
“There’s actually no problem with these sort of cases,” Dangote said. “There are people who don’t want the development of Africa.”
The Lamu project forms part of a broader expansion plan by the Dangote Group across Africa. Dangote disclosed that the group plans to invest an additional $50 billion across the continent after committing more than $25 billion to its existing businesses.
He said the next phase of the group’s expansion would combine large-scale industrial investments with efforts to broaden African ownership of its businesses through the capital markets.
Speaking during a fireside chat with the Chief Executive Officer of the Nairobi Securities Exchange, Frank Mwiti, at the “Dangote Petroleum Refinery IPO High Level Investor Engagement” organised by the NSE, Dangote said Africa could not compete globally by taking incremental steps.
“We have already invested more than $25 billion, but right now, we’re going ahead to invest an additional $50 billion,” he said.
“We want to create and generate wealth for Africans, to make sure that we defend our markets. And the only way to defend the market is not to do baby steps. It’s better we do big scale.”
President William Ruto’s Chief Economic Adviser, David Ndii, said the Lamu refinery emerged from discussions among African policymakers, financiers and business leaders on how to use the continent’s natural resources to drive industrialisation rather than simply exporting raw materials.
According to Ndii, the discussions identified petroleum refining as a strategic opportunity for East Africa and subsequently led to engagements involving Dangote, Ruto, Ugandan President Yoweri Museveni and other regional leaders.
He said a closed-door meeting in April examined an addressable East African market for finished petroleum products estimated at 20 million metric tonnes annually, with the potential to rise to 30 million tonnes.
Ndii traced the thinking behind the project to an earlier Nairobi meeting convened by Ruto and the President and Chief Executive Officer of the Africa Finance Corporation, Samaila Zubairu.
He said the meeting challenged the economic model under which international financing is more readily available for infrastructure designed to evacuate raw materials, while locally focused processing projects often struggle to attract capital.
Quoting Zubairu, Ndii said: “We export our minerals FOB and import inflation CIF.”
He said the Lamu refinery represented an attempt to reverse that pattern by increasing local processing and value addition.
The East African expansion is also linked to Dangote’s broader plan to increase African participation in the ownership of major businesses within the group.
Dangote told investors that the ongoing public offer of Dangote Petroleum Refinery was not primarily aimed at raising capital but at widening ownership of the company and allowing ordinary Africans to participate in the wealth created by industrialisation.
“It’s not because we need the money. No. It’s because we want to share this prosperity with everybody,” he said.
“The real purpose is for us to democratise wealth-making.”
Dangote said the group was prepared to progressively release more equity in its businesses as investor demand grows, adding that all the group’s operating companies would eventually be opened increasingly to public ownership.
“I’ve said that all the companies that we operate from today, eventually all of them will be owned by the people,” he said.
He disclosed that a new shipping business being developed by the group would eventually be listed on the capital market, while its expanding fertiliser operations would also be opened to public participation.
“Let people own it,” he said.
Dangote said the group’s ambition was to create millions of African shareholders who would benefit from dividends and potential capital appreciation as the underlying businesses expand.
He also indicated that the proposed Lamu refinery, when eventually opened to public ownership, should be listed in Kenya rather than automatically being taken to the Nigerian market.
“If tomorrow we are going to have the refinery here in Lamu to be listed, we don’t have to list it in Nigeria. We shouldn’t list it in Nigeria. We should list it here,” he said.
