East African countries, including Kenya, Uganda, and Tanzania are exploring the possibility of establishing a common oil refinery in a bid to reduce mounting reliance on imported fuel. A joint refinery would be established at Tanga port in northeastern Tanzania, Kenyan President William Ruto revealed during a summit on infrastructure development in the Kenyan capital Nairobi on Thursday. “We are going to develop a joint oil refinery in Tanga to benefit all of us,” President Ruto said during The Africa We Want Summit in Nairobi, adding that the refinery will process crude from countries including the Democratic Republic of Congo and South Sudan. Nigeria’s billionaire industrialist Aliko Dangote committed to investing in the proposed refinery, suggesting if countries are serious about this venture the refinery would be developed in the next four to five years. “I can give commitment to the two presidents that are here, if they will support the refinery, we will build an identical one to what we have in Nigeria,” he said. Dangote currently operates the largest oil refinery in Africa which started production in February 2024. At a cost of $20 billion, the refinery will produce 650,000 barrels per day (bpd). Africa currently produces 10 million barrels of oil per day, which is 10 per cent of the global output. Yet, the continent remains a net importer of petroleum products with its fuel import bill well above $90 billion annually. At an average export price of $75 per barrel, Africa’s crude production is valued at roughly $270 billion each year. However, Ruto said, if this same production were refined domestically and exported as finished products at an average price of $800 per tonne, it would generate over $500 billion. “This represents a forgone income of about $230 billion, which is nearly 7.5% of our GDP from just one resource,” he noted. According to the Africa Finance Corporation (AFC), the continent continues to import over 70 per cent of its refined fuel and faces an estimated $230 billion annual import bill across essential goods, including fuel, food, plastics, steel, and fertiliser. A case for oil refinery President Yoweli Kaguta Museveni of Uganda made the case for a regional refinery, saying it makes more sense and has a proven return on investment. “When we discovered oil in Uganda, the major oil companies kept telling us refineries do not make money. But when I checked, a refinery in Uganda is actually very profitable,” he said. Uganda hopes to start commercial crude oil production this year. In 2024, it announced a deal with United Arab Emirates‑based Alpha MBM Investments to develop a 60,000‑barrel‑per‑day refinery. Museveni said the region is endowed with financial resources to undertake world-class infrastructure projects. If we constrain consumption, we have enough local capital locked away in our pension funds to finance these projects, he said. The East African region is endowed with renewable energy and minerals that are key to driving the global energy transition, including copper, cobalt, nickel, manganese, graphite, lithium, and rare earth elements. For instance, the Democratic Republic of the Congo is the world’s leading producer of mined cobalt, and it has recently accounted for a little over 70 per cent of global mine output.
