BusinessDaily
President William Ruto and his Ugandan counterpart are in talks with Africa’s richest man, Aliko Dangote, to set up a refinery in Tanzania to purify crude oil from the five East African countries. Mr Dangote, who is in Nairobi for a two-day summit convened by the Africa Finance Corporation (AFC) to champion cross-border infrastructure, said he stands ready to back the East Africa refinery to match the scale of the one he has delivered in Nigeria. President Ruto, while in a panel discussion with Mr Dangote, Uganda’s President Yoweri Museveni and AFC Chief Executive Samaila Zubairu, confirmed the talks will see the joint facility refine oil from Kenya, Uganda, Tanzania, the Democratic Republic of Congo and South Sudan, among other countries. “We are discussing a refinery in Tanzania. We are discussing that we have a joint refinery in Tanga to benefit all of us because that refinery is going to take on board oil from DRC, Kenya, South Sudan, and Uganda,” said President Ruto. “We will just need to build a short pipeline from Tanga to Mombasa and for the finished product, we will use the pipeline we jointly own with Uganda...Industrialists like Dangote and institutions like AFC appreciate that it is their responsibility to invest in this infrastructure.” Mr Dangote said if three to four governments agree on the project, his firm will deliver the refinery within five years. The refinery could help cut East African countries’ exposure to price shocks and supply chain disruptions akin to the present crisis, where the ongoing US-Israel conflict with Iran has triggered a surge in prices in the wake of reduced supplies. The value of the planned refinery was not disclosed. Still, Mr Dangote, whose company, Dangote Petroleum Refinery, is planning a landmark pan-African Initial Public Offering (IPO) in May-July 2026, said he stands ready to back the project for as long as the region agrees. Read: Implications of Uganda refinery deal for Kenya oil infrastructure "Even now, I can give commitment to the two Presidents that are here, if they will support the refinery, we will build the identical one that we have in Nigeria," said Mr Dangote. “My commitment here today is that if we agree with three or four governments about the refinery, we will leave and make sure that the refinery is built within the next four to five years." The Nigerian refinery has a capacity of 650,000 barrels per day and was built at a cost of about $20 billion. It took about seven years to construct. The facility has increased exports of refined oil and urea to African countries hit by supply disruptions caused by the Iran war, helping cushion the full impact of the crisis in Nigeria and across the continent. Mr Dangoteplans to increase the refinery's capacity. In East Africa, prices of fuel have risen in line with disruptions in the supply chain following the closure of Strait of Hormuz, a narrow waterway in the Middle East country through which the oil and gas of its Gulf neighbours has to pass. The waterway handles an estimated 21 million barrels of oil daily from countries such as Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates. The Dangote Group plans to list Dangote Petroleum Refinery & Petrochemicals in what could become Africa’s largest IPO. The plan is to sell up to 10 percent stake on the Nigerian Exchange Group with possible cross-border placements across African stock exchanges to deepen regional capital markets and attract global investors. The initial bourses targeted by Dangote include the Johannesburg Stock Exchange, the Ghana Stock Exchange, the Ethiopian Securities Exchange, the Bourse Régionale des Valeurs Mobilières, and the Nairobi Securities Exchange. “It will work. There is nothing that can stop it. We have done the one in Nigeria and that is why we are taking the bold move, which we have started already," he said. Even as the plans for a joint refinery for EAC countries take shape, President Museveni said he will still push forward with a smaller oil refinery project in Uganda. The Ugandan refinery is designed to process 60,000 barrels of crude oil per day (bpd) in the Hoima District, which is significantly smaller than earlier, abandoned, higher-capacity proposals. President Museveni said the refinery will serve Uganda and parts of Tanzania and, but excess oil will be channelled to the joint refinery. “We will build the small refinery which he had planned for the Ugandan market and parts of Tanzania and Kenya, which are near Uganda, because of transport costs. But we will supply the surplus oil to the East African refinery,” said Museveni. The planned joint project for East African countries resonates with the Summit’s rallying call that the continent must now start pursuing cross-border planning and execution to position infrastructure as the engine of industrialisation. AFC Chief Executive Samaila Zubairu said across the continent, domestic financial resources have expanded significantly, within banks, pension funds, insurance pools, and sovereign institutions now holding in excess of $4 trillion. However, Mr Zubairu lamented that this growing capital base has not translated into the level of industrialisation, infrastructure, or employment required to support sustained economic transformation. “There is potential in Africa but we have to harness it. The summit is a profound opportunity to turn potential into action by forging partnerships, unlocking finance and building continental strategy,” said Mr Zubairu. → palushula@ke.nationmedia.com → emwenda@ke.nationmedia.com Follow our WhatsApp channel for the latest business and markets updates.
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