Nigerian manufacturing titan Aliko Dangote says plans for a proposed 700,000-barrel-per-day refinery in East Africa have advanced significantly, with groundbreaking expected by October.
Dangote said construction of the refinery, which is planned for Kenya, would begin shortly after the groundbreaking and take less than four years to complete.
He said the project is intended to help African countries become more self-sufficient in meeting their energy needs while reducing reliance on imported refined petroleum products.
“The plans have actually gone very far with Kenya, because what we are trying to do really is to try and make sure that most African countries, we make them self-sufficient in their own energy needs, fertiliser and coal. We've gone very far, and I think by the latest, by October, we'll be doing ground-breaking,” he said during an interview with the BBC.
“Once we break ground, we'll start the construction very soon. We're really planning something very big within the African continent.”
The proposed facility will not serve Kenya alone but is expected to supply the wider East African region and potentially markets extending as far as Egypt.
“That’s why we’re calling it East African Refinery, you know, so that it can serve a lot of countries up to even Egypt,” Dangote said.
The refinery was initially estimated to cost about $17 billion, but Dangote said the projected cost has since been revised downwards to between $15.5 billion and $16 billion.
He attributed the lower cost partly to reduced financing costs and experience gained from constructing the Dangote refinery in Lagos.
“This one will be faster, so in terms of financing costs, it will be less,” he said.
Dangote said the company expects to finance the project through a combination of equity and debt, with equity accounting for 30 per cent and debt making up the remaining 70 per cent.
He said the company does not anticipate difficulties in raising the required funds.
The refinery is expected to have a significant impact on energy security in the region by ensuring countries have access to locally refined petroleum products.
“It’s going to have a massive impact, really, and also it guarantees the countries getting their own products,” Dangote said.
The planned investment comes as African countries continue to grapple with the cost and supply challenges associated with importing refined petroleum products despite having significant crude oil resources.
Dangote said Africa must focus on turning its economic potential into tangible opportunities for its growing population.
He said African countries must take greater responsibility for driving economic development rather than waiting for external players.
“We Africans, we must make sure that we lead the prospects that you have, the opportunities that you have. Nobody, and I repeat, nobody will come and drive it for us,” he said.
He also called for stronger implementation of the African Continental Free Trade Area, saying greater intra-African trade would support economic growth and self-sufficiency.
Dangote said Africa must increase production and create jobs to provide opportunities for its predominantly young population.
“You have one quarter of the world’s population, and you are not producing anything. If you are not productive, how do you create prosperity?” he said.
