Africa's richest man to launch Kenya oil refinery despite land protests

Africa’s richest man set to launch Kenya oil refinery despite land protests

Aliko Dangote built his wealth in cement before moving into oil

Nigerian billionaire Aliko Dangote and Kenya’s President William Ruto are due to break ground on a $16bn (£12bn) oil refinery in Lamu, on Kenya’s northern coast.

When finished, the refinery is projected to handle 700,000 barrels of crude oil a day, which would make it East Africa’s biggest industrial project by capacity.

Before the launch, some local residents went onto the streets to call for more compensation for land being used for the refinery.

In comments to the BBC, Dangote brushed aside the protests as tactics used by local marketers and international players, saying the refinery would proceed and would be completed by 2030 as planned.

The Lamu refinery is Kenya’s biggest infrastructure project since independence, overtaking the $5.1bn (£3.9bn) Standard Gauge Railway. East Africa currently has no oil refineries.

In his interview with the BBC’s Focus on Africa programme, Dangote rejected the compensation complaints and said the company had taken only the part of the land it needed from what the government had provided.

“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, suggesting the protests did not concern him.

At the peak of construction, Dangote, Africa’s richest man, said the refinery would generate 60,000 jobs, with benefits reaching beyond those employed directly on the project.

“Are we going to bring robots? Of course, the people will benefit,” he said.

Some critics have questioned why the refinery is being built in Kenya, a country that does not produce oil. Others have pointed to Tanzania or Uganda, both of which are moving toward oil exports through the East African Crude Oil Pipeline.

But Kenya’s Energy and Petroleum Minister Opiyo Wandayi told the BBC that the refinery’s location did not mean it would depend on oil from the region.

“Refineries get crude oil from the market. And the market is open,” he said.

Dangote made the same argument, using Singapore as an example.

“Singapore doesn’t produce a single drop of oil, yet they have a lot of refineries,” Dangote said.

The refinery will also feature a 1,000-megawatt power plant.

Dangote views dependable electricity as a major barrier to industrialisation across Africa, especially in mineral-rich countries that still export raw materials instead of processing them locally.

He has about $50bn (£38bn) worth of projects in the pipeline, including plans to build 10,000 megawatts of power generation capacity across Africa by 2030, with the possibility of doubling that if demand requires it.

In Lamu, the new power plant is intended to support Dangote’s operations as well as other industries expected to establish themselves in the area.

“The power is there and what you do is what we call plug and play,” he said.

Kenya has relatively high fuel prices, which has raised hopes that more refining capacity could eventually reduce pump prices. However, the price of crude oil, the main raw material for fuel and set by international markets, remains a key factor in what consumers pay at the pump.

The Lamu refinery is Dangote’s biggest proposed investment outside Nigeria, with construction set to start on 1 November. His refinery in Nigeria also has a processing capacity of 700,000 barrels a day.

Dangote plans to double that capacity after floating 4.1 million ordinary shares to raise up to $2.1b earlier this month.