Sh2 trillion oil refinery a massive investment

The planned Sh2 trillion Dangote Group oil refinery is a massive foreign direct investment that will have a major economic impact on this country and the entire East and Central African region.

Its launch in Lamu tomorrow by President William Ruto will unveil an ambitious regional project that promises to reshape the energy sector and significantly boost economic growth.

It also promises hefty revenue for the country and the creation of jobs. It will boost the economy directly and through a multiplier effect by supporting industries.

Expected to produce 700,000 barrels of oil a day, the facility, whose construction is expected to be completed in 2030, is going to be the largest industrial investment in the region.

It will transform the petroleum sector by ensuring fuel supply reliability and security. It will also scale up industrialisation and create 60,000 direct jobs and spin-off industries for the production of fertilisers, chemicals and packaging.

The plant will source crude oil from South Sudan, Uganda and Kenya, with additional supplies coming from other countries and regions, including the Middle East, through the Lamu Port.

The East African Oil Refinery, spearheaded by Nigerian billionaire Aliko Dangote, is strategically located near Lamu Port along the Lapsset Corridor. It will be even larger than Dangote’s flagship refinery in Lagos.

It will process crude oil from regional sources and distribute refined fuel to Kenya, Uganda, South Sudan, Rwanda, Burundi, Tanzania, Ethiopia, and the Democratic Republic of Congo. It is expected to lower the region’s total dependence on expensive Middle East fuel imports and enable 1,000MW power generation.

The Dangote Group has offered a 30 per cent equity stake to East African nations, with Kenya planning to take a 10 per cent shareholding valued at $500 million.

However, there are some hurdles, including a land rights suit for more than 130 local people seeking compensation. Any sticking issues should be sorted out to clear the path for this massive, viable investment.

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