Billionaire Aliko Dangote, fresh from successfully launching Nigeria’s sole operational oil refinery in 2024, is now reportedly targeting East Africa for his next major refinery venture. This move comes at a time when African nations are actively pursuing greater energy security, particularly in the wake of significant global disruptions caused by the conflict involving the US and Israel with Iran, and Tehran’s subsequent closure of the Strait of Hormuz – a vital waterway through which approximately 20 percent of the world’s oil and natural gas transits.
Dangote, recognized as Africa’s wealthiest individual, emerged as a beneficiary of these developments. His newly operational refinery in Nigeria’s commercial Lagos State began supplying substantial volumes of crude oil across the continent as the situation with Iran intensified in March, leading to a surge in global oil prices. Currently, regions like West, South, and East Africa heavily depend on importing refined petroleum products from the Middle East, making them highly susceptible to supply chain disruptions in that area. Countries neighboring Nigeria, including Cameroon, Togo, Ghana, and even Tanzania further east, have increasingly turned to Nigeria for supplies as Middle Eastern sources faced constraints.
By late March, the refinery, boasting a capacity of 650,000 barrels per day (bpd), reported receiving international orders, particularly for critically scarce jet fuel, amidst widespread flight cancellations. Analysts suggest that the output from Dangote’s refinery has helped mitigate the impact of the conflict on fuel supplies for Nigeria and its neighbors. Nigeria, Africa’s largest oil producer, hosts the $19 billion Dangote refinery in Lagos, currently the world’s largest single-train refinery (utilizing a single processing line). It reached full production capacity in February 2026, coinciding with the start of the conflict involving Iran. With no functional state-owned refineries, Dangote’s facility is now poised to transform Nigeria into a net exporter of jet fuel and diesel.
Why Increased Refining Capacity in Africa is Crucial
Dangote’s Vision for an East African Refinery
In April, Kenyan President William Ruto revealed discussions among East African nations to construct a joint oil refinery at Tanzania’s Tanga port, projected to match the capacity of Dangote’s Lagos facility. “We do not want to be held hostage any more by the Strait of Hormuz,” Ruto stated at a Nairobi business event in April, attended by Dangote. He added, “We do not want to be held hostage by conflicts initiated by others. We possess our own resources here, and we are committed to utilizing African resources to industrialize our region.”
However, in a Sunday interview with the Financial Times, Dangote expressed a preference for establishing the new operation in Kenya over Tanzania. The billionaire explained to the UK newspaper, “I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port.” He further noted, “Kenyans consume more. It’s a bigger economy,” concluding that “the ball is in the hands of President Ruto… Whatever President Ruto says is what I’ll do.” Projected construction costs for this venture are estimated between $15 billion and $17 billion.
Dumebi Oluwole, an analyst with Lagos-based intelligence firm Stears, told Al Jazeera that venturing into East Africa, with its distinct commercial landscape compared to West Africa, could present significant challenges. “Dangote has proven its capacity to build at scale,” Oluwole stated. “The East African test will be whether it can also navigate the political and logistical landscape of a fragmented, multi-country market.”
Why Africa Under-Refines Its Own Oil
Despite possessing substantial crude reserves, African nations only refine approximately 44 percent of their total oil consumption, with the remainder being imported, as per a 2022 African Union report. Algeria, Egypt, and South Africa lead in refined oil production. North Africa alone accounts for about 21 refineries. Southern Africa has seven refineries, and West Africa has 14. However, a majority of these facilities in both regions are either non-operational or producing below their designed capacity.
East Africa’s sole existing refinery, located in Mombasa, ceased operations in 2013, a consequence of sluggish government policies and investors withdrawing due to perceived commercial unviability. Currently, East Africa possesses no refining capacity, despite the region holding an estimated 4.7 billion barrels of crude reserves, primarily in Uganda, South Sudan, Kenya, and the Democratic Republic of Congo. Kenya imported 40 million barrels of petroleum in 2025. It frequently sources oil from the UAE, Saudi Arabia, India, and Oman, all of whom have faced disruptions due to Iran’s closure of the Strait of Hormuz. Nigeria, Africa’s biggest net crude producer, boasts a 1.5 million to 1.6 million bpd capacity but has not engaged in significant refining since 2019.
Impact of Local Refineries on African Nations
Analyst Oluwole highlighted that exporting most of its crude only to import refined products is an expensive practice that disadvantages Africa. Theoretically, increased oil refining within the continent would lead to lower petrol prices, reduced transport costs, and greater energy availability for both individuals and businesses. It would also provide enhanced access to crucial by-products such as fertilizers for farmers or petrochemicals for manufacturers.
“Dangote has demonstrated that a viable, scalable, intra-African energy supply option is possible – that proof of concept matters enormously,” Oluwole emphasized. She added, “It reflects a growing continental conviction that Africa can provide for itself, and that this is no longer wishful thinking.”
In Nigeria, however, Dangote’s refinery has yet to fully alleviate pressures. Local airlines, for instance, have voiced concerns over high jet fuel prices despite improved domestic supplies. Analysts attribute this partly to the Nigerian government’s removal of fuel subsidies in 2023. Additionally, bureaucratic hurdles within the state oil company compelled Dangote’s refinery to import crude. Nevertheless, Oluwole noted that the refinery is contributing to “a more transparent and competitive market,” with results expected to materialize over time.
Other African nations are also advancing. Last week, Angola’s $470 million Cabinda refinery commenced supplying both domestic and international markets. Primarily owned by the UK’s Gemcorp Capital, the project has a capacity of 30,000 bpd, with plans to double this by the end of 2026. Dangote’s proposed refinery in Kenya, if realized, could significantly reduce East Africa’s dependence on Middle Eastern refined products.
Furthermore, a separate government-funded refinery project is underway in Uganda’s Hoima region. Authorities anticipate this project will refine 60,000 bpd upon commencing operations in 2029. It will be supplied by the joint Uganda-Tanzania East African Crude Oil Pipeline (EACOP), an ongoing initiative designed to transport crude from Uganda’s Lake Albert to Tanzania’s Tanga Port. Uganda also intends to produce diesel, jet fuel, kerosene, and Liquefied Petroleum Gas (LPG).
With these ambitious plans in motion, Oluwole emphasizes that the onus is now on African governments to foster conducive business environments for the private sector. “Dangote has opened the door,” she concluded. “The question now is whether African institutions and governments will walk through it.”
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