Nigerian billionaire Aliko Dangote and Kenya's President William Ruto have broken ground on a USD 16 billion oil refinery in Lamu, on Kenya's northern coast, in a project expected to process 700,000 barrels of crude oil a day upon completion, making it East Africa's largest industrial project by capacity.

The leaders of Uganda, Ethiopia, Togo, and Benin also attended the groundbreaking ceremony.

"This Is Africa Coming Together to Build Africa"

Speaking at the launch, Dangote, Africa's richest man, framed the project as a milestone for the continent's industrial development. "This is Africa coming together to build Africa. Today we are not simply breaking ground for a refinery; we're breaking ground for a new chapter in Africa's industrial journey to a brighter future," Dangote said.

He referenced his existing refinery in Nigeria, saying, "Lekki proved that it can be done; Lamu must prove that it can be repeated." President Ruto echoed the sentiment, describing the project as "a declaration that Africa has entered a new age in which we will increasingly finance, build, process, and add value here at home."

The refinery is set to become the only one in East Africa and represents Kenya's largest infrastructure project since independence, surpassing the USD 5.1 billion Standard Gauge Railway.

Dangote Dismisses Compensation Protests

In an interview, Dangote dismissed the protests as games played by local marketers and international players, insisting the refinery would go ahead and would be ready by 2030 as planned.

He disputed the compensation claims, saying the company took only the portion of land it needed from what the government made available. "To come and say some people are demonstrating, demonstrating about what? Have you ever seen people demonstrating against themselves in terms of development?" he asked, indicating he was not fazed by the protests.

Walid Ali, co-founder of the Save Lamu campaign group, said that residents are concerned about the environmental impact the project could have on the local community. "We are asking for the findings from the environmental impact assessment so that we can see what mitigation measures are being proposed," Ali said. "This is not the first project where we have seen environmental concerns being overlooked," he added.

60,000 Jobs and a 1,000-Megawatt Power Plant

At the height of construction, Dangote said the refinery would create 60,000 jobs, with benefits extending beyond those employed directly by the project. "Are we going to bring robots? Of course, the people will benefit," he said.

The refinery will also include a 1,000-megawatt power plant. In Lamu, the new power plant is designed to support Dangote's operations as well as other industries expected to set up in the area. "The power is there, and what you do is what we call plug and play," Dangote said.

Dangote views reliable electricity as a critical constraint on industrialisation across Africa, particularly in mineral-rich countries that still export raw materials rather than processing them locally. He has about USD 50 billion worth of projects in the pipeline, including plans to develop 10,000 megawatts of power generation capacity across Africa by 2030, with the potential to double that depending on demand.

Why Build a Refinery in a Non-Oil-Producing Country?

Critics have questioned the decision to build the refinery in Kenya, which is not an oil-producing country. Others have suggested Tanzania or Uganda, both of which are moving towards oil exports through the East African Crude Oil Pipeline.

Kenya's Energy and Petroleum Minister Opiyo Wandayi said that the refinery's location did not mean it would rely on oil from the region. "Refineries get crude oil from the market. And the market is open," Wandayi said. Dangote made a similar point, citing Singapore as an example. "Singapore doesn't produce a single drop of oil, yet they have a lot of refineries," he said.

Kenya has relatively high fuel prices, raising expectations that greater refining capacity could eventually help bring down pump prices. However, the price of crude oil, the main raw material for fuel, is set by international markets and remains a major factor in what consumers pay at the pump.

Dangote's Largest Investment Outside Nigeria

The Lamu refinery is Dangote's largest proposed investment outside Nigeria. His refinery in Nigeria also has a processing capacity of 700,000 barrels a day, and he plans to double that capacity after floating 4.1 million ordinary shares to raise up to USD 2.1 billion earlier this month.

Dangote made his fortune in cement before branching into oil. Dangote also spoke to the broadcaster last month about the new oil refinery in Kenya.

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