Why Dangote is betting on Kenya over Tanzania for East Africa oil refinery

Africa’s richest businessman, Aliko Dangote, is once again positioning himself at the centre of Africa’s energy transformation, this time with plans that could reshape fuel supply across East Africa.

The Nigerian billionaire, whose $20 billion refinery in Lagos became the largest single-train refinery in the world, has indicated that Kenya’s port city of Mombasa is emerging as his preferred location for a proposed 650,000-barrel-per-day refinery intended to serve the wider East African market.

The proposal comes at a time when East African economies are under growing pressure from volatile global fuel prices and supply chain disruptions linked to geopolitical tensions in the Middle East. 

Countries in the region currently depend entirely on imported refined petroleum products, making them highly vulnerable whenever global oil markets are disrupted.

A few weeks earlier, regional leaders had discussed establishing a shared refinery at Tanzania’s port of Tanga, with President William Ruto publicly supporting the idea during an infrastructure summit in Nairobi. 

The project was envisioned as a strategic hub capable of processing crude oil from Uganda, South Sudan, the Democratic Republic of Congo and Kenya itself.

Dangote’s latest remarks, however, suggest momentum may now be shifting toward Kenya. He reportedly believes Mombasa offers stronger commercial advantages because of its deeper port infrastructure, larger consumer market and stronger regional economy.

The businessman’s growing influence in Africa’s energy sector stems largely from the success of the Dangote Refinery in Nigeria, which officially began operations in 2024 after years of delays and massive investment. 

The refinery has since expanded fuel exports across several African countries and is viewed by many policymakers as a model for reducing Africa’s long-standing dependence on imported fuel.

A refinery in East Africa could significantly lower transportation costs, improve fuel security and strengthen regional trade integration. 

The project could also revive Kenya’s position as an energy gateway for neighbouring countries after the decline of the old Changamwe refinery in Mombasa, which was shut down years ago due to economic challenges.

Still, the proposal faces political and financial hurdles. Dangote has made clear that government backing will be essential before construction can begin, with estimates suggesting the project could require between $15 billion and $17 billion in investment.

Online reactions across East Africa have been mixed. While many see the project as a potential driver of industrial growth and cheaper fuel prices, others remain cautious about political interference, regional competition and the long-term economics of large oil investments in a world increasingly focused on renewable energy.