East Africa has spent decades exporting one commodity and importing another. The region holds roughly 4.7 billion barrels of crude oil reserves and more than 70 trillion cubic feet of natural gas across Uganda, South Sudan, Kenya and the DRC, according to the African Energy Commission (AFREC). Yet it imports 100% of its refined fuel after Kenya Petroleum Refineries Limited (KPRL), the region's last operating refinery, shut down in 2013. Nigerian billionaire Aliko Dangote now says he intends to reverse that equation with a $17 billion (KSh2.2 trillion), 700,000-barrel-per-day refinery on Kenya's Lamu Island that would process crude for Kenya, Uganda, South Sudan, Rwanda, Burundi and the DRC.
The refinery's planned capacity of 700,000 barrels per day exceeds East Africa's current refined fuel demand of roughly 450,000 bpd by about 250,000 bpd, leaving room to supply markets elsewhere on the continent. Lamu's natural harbor, with drafts reaching 18 meters, can accommodate fully laden Post-Panamax crude tankers carrying up to 2 million barrels, vessels too large to call at Mombasa.
That gives the refinery direct access to long-haul crude imports while providing an export outlet for surplus gasoline, diesel and jet fuel. Construction and operation are projected to create more than 60,000 jobs, making the project one of the largest industrial employers ever proposed for Kenya's coast.
Situated along the strategic LAPSSET Corridor, the project is already sparking major cross-border private sector partnerships.
Tanzanian billionaire Mohammed Dewji has expressed intent to inject $100 million into the development.
The giant refinery will also test the feasibility of intra-African industrial integration under the African Continental Free Trade Area (AfCFTA). The refinery would be able to process crude from East African producers such as Uganda, South Sudan and Kenya as regional production expands, while also accepting cargoes from larger exporters including Nigeria and Angola. Refined fuels and petrochemical feedstocks could then be sold across the African Continental Free Trade Area (AfCFTA), a 55-country market with 1.4 billion people and a combined GDP of roughly $3.4 trillion that is gradually removing tariffs and other trade barriers on intra-African commerce.
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Kenya's new mega-project will be encouraged by the success story of Nigeria's Dangote refinery. The Dangote Refinery has transformed Nigeria from an import-dependent nation into an energy-secure hub by eliminating the need to import refined fuel. Commissioned in 2023, the 650,000 bpd refinery meets 100% of Nigeria's total domestic requirements for gasoline, diesel, and jet fuel, stabilizing structural supply shocks with local marketers now able to buy and sell directly. By slashing refined product import bills, the refinery has significantly improved Nigeria's balance of payments. This improved external financial position directly led to Nigeria receiving its first sovereign credit rating upgrade to B in 14 years, helping the country secure loans on more attractive terms. Local refining retains wealth domestically, alleviating massive demand for foreign exchange and helping stabilize local currency fluctuations.
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