After successfully launching Nigeria’s only operational oil refinery in 2024, billionaire businessman Aliko Dangote has set his sights on East Africa as the next location for another mega refinery project, according to recent reports. This comes as African countries are actively seeking ways to enhance energy security, following significant global disruptions amidst the US and Israel’s war on Iran and Tehran’s subsequent closure of the Strait of Hormuz, through which approximately 20 percent of the world’s oil and natural gas is transported. Dangote, Africa’s richest man, appeared to be one of the beneficiaries of this fallout when his newly operational refinery, located in Nigeria’s commercial Lagos State, began selling large volumes of crude oil across the continent as the conflict with Iran escalated in March and global oil prices soared. Currently, West, South, and East Africa primarily rely on importing refined petroleum products from the Middle East, making them highly vulnerable to disruptions in that region. Nigeria’s neighbors – Cameroon, Togo, Ghana, and even Tanzania, further to the east – are among the countries that have turned to Nigeria as supplies from the Middle East diminish. By the end of March, the refinery, with a capacity to produce 650,000 barrels per day (bpd), reported it was also receiving orders from beyond the continent, particularly for severely scarce jet fuel as hundreds of flights were canceled across various regions. Supply from Dangote’s refinery has cushioned the impact of the conflict in terms of fuel supply for Nigeria and neighboring countries, according to analysts. Nigeria is Africa’s largest oil producer, and the $19 billion project in Lagos is currently the world’s largest single-train refinery, meaning it employs a single processing line rather than multiple units. It reached full production capacity in February 2026, the same month the conflict with Iran began. Nigeria has no functional state-owned refinery, so Dangote’s refinery is now positioning the country to be a net exporter of jet fuel and diesel.
Here’s why increased refining capacity in Africa is crucial for the continent:
What is Dangote’s plan for an East Africa refinery?
In April, Kenya’s President William Ruto announced that East African countries were in talks to build a joint oil refinery at Tanzania’s Tanga port, which would have a similar capacity to Dangote’s Lagos operation. “We do not want to be held hostage anymore by the Strait of Hormuz,” Ruto stated at a Nairobi business event in April, where Dangote was also present. “We do not want to be held hostage by wars started by other people. We have our resources here, and we are committed to using our African resources to industrialize our region.” In an interview with the Financial Times on Sunday, however, Dangote expressed a preference to build the new operation in Kenya rather than Tanzania. “I’m leaning more towards Mombasa because Mombasa has a much larger, deeper port,” the billionaire told the UK newspaper. “Kenyans consume more. It’s a bigger economy,” he said, adding that “the ball is in the hands of President Ruto… Whatever President Ruto says is what I’ll do.” He has projected construction costs of between $15 billion and $17 billion. However, venturing into East Africa, which has a very different commercial landscape from West Africa, could prove challenging, analyst Dumebi Oluwole of Lagos-based intelligence firm Stears told Al Jazeera. “Dangote has proven his operation can build at scale,” she said. “The East African test will be whether it can also navigate the political and logistical landscape of a fragmented, multi-country market.”
Why aren’t African countries already producing more oil?
Despite having sizeable crude reserves, African countries only refine about 44 percent of the total oil they consume, with imports making up the rest, according to a 2022 African Union report. The top producers of refined oil are Algeria, Egypt, and South Africa. There are about 21 refineries in North Africa. Southern Africa has another seven, while West Africa has 14. However, most refineries in these two regions are either not operating or are producing below their equipped capacity. East Africa’s only existing refinery is in Mombasa, but it stopped operating in 2013 due to a combination of slow government policies and exiting investors, who deemed it commercially unviable. There is currently no refining capacity at all in East Africa, despite the region having about 4.7 billion barrels of crude reserves, according to the African Union, mainly in Uganda, South Sudan, Kenya, and the Democratic Republic of the Congo. Kenya imported 40 million barrels of petroleum in 2025. It regularly buys oil from the UAE, Saudi Arabia, India, and Oman, all of which have been hampered by Iran’s closure of the Strait of Hormuz. Nigeria itself is Africa’s biggest net crude producer with a 1.5 million to 1.6 million bpd capacity. The country has not refined meaningfully since 2019.
What difference will local refineries make for African countries?
Exporting most of its crude to then import refined products is expensive and puts Africa at a disadvantage, analyst Oluwole said. More oil refined on the continent would theoretically mean lower petrol pump prices, lower transport costs, and more energy available for people and businesses. It would also mean greater access to by-products like fertilizers for farmers, for example, or petrochemicals for manufacturers. “Dangote has demonstrated that a viable, scalable, intra-African energy supply option is possible – that proof of concept matters enormously,” said Oluwole. “It reflects a growing continental conviction that Africa can provide for itself, and that this is no longer wishful thinking,” she added. In Nigeria’s case, Dangote’s refinery is yet to fully ease pressures. Local airlines, for example, have complained about having to pay high prices for jet fuel even with improved local supplies. Analysts suggest this could be due to Nigeria’s government removing fuel subsidies in 2023. Bureaucracy within the state oil company also forced Dangote’s refinery to import crude. Still, the refinery is contributing to “a more transparent and competitive market,” Oluwole said, adding that results should eventually become evident. Other countries are stepping up. Last week, Angola’s $470 million Cabinda refinery began supplying domestic as well as foreign markets. The project is owned primarily by the United Kingdom’s Gemcorp Capital and has a capacity of 30,000 bpd, with plans to double by the end of 2026. Dangote’s planned refinery in Kenya, if completed, could also help reduce East Africa’s reliance on the Middle East. A separate, government-funded refinery project in Uganda’s Hoima region is also in the works. Authorities expect the project to be able to refine 60,000 bpd when it starts operations in 2029. It will be fed by the joint Uganda-Tanzania East African Crude Oil Pipeline (EACOP), an ongoing project that will transport crude from Uganda’s Lake Albert to Tanzania’s Tanga Port. Uganda also plans to produce diesel, jet fuel, kerosene, and Liquefied Petroleum Gas (LPG). With significant plans in place, Oluwole says it’s now up to African governments to create enabling business environments for the private sector. “Dangote has opened the door,” she said. “The question now is whether African institutions and governments will walk through it.”
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