He reiterated Uganda’s commitment to constructing its own refinery to process crude oil for domestic consumption and supply markets in the interior of Africa.
President Yoweri Kaguta Museveni has welcomed plans to establish a 700,000-barrel-per-day oil refinery in Lamu, Kenya, saying more refineries are needed across East Africa to promote industrialisation, create jobs and ensure countries benefit from processing their natural resources.
Museveni made the remarks during the groundbreaking ceremony for the proposed Dangote East Africa Petroleum Refinery and Petrochemicals Special Economic Zone in Mokowe, Lamu County, where he joined Kenyan President William Ruto, Nigerian industrialist Aliko Dangote and other African leaders.
The Ugandan president said the Lamu refinery should complement planned refining projects in Uganda and Tanzania, stressing the importance of regional cooperation and value addition.
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“I am very happy about this refinery. In Uganda, we have got some petroleum. I discussed this with Mr Dangote, His Excellency Ruto and Samia,” Museveni said.
He reiterated Uganda’s commitment to constructing its own refinery to process crude oil for domestic consumption and supply markets in the interior of Africa.
“We are going to build a small refinery in Uganda. We had planned this long ago. We can’t change that. The refinery will produce for Uganda and for the interior parts of Africa,” he said.
Museveni also said he would reopen discussions with Tanzanian President Samia Suluhu Hassan over a proposed refinery in Tanga to establish what had stalled the project.
“I want to discuss with Samia and His Excellency Ruto to find out what happened to that refinery in Tanga. What was the problem?” he said.
He argued that having several refineries in East Africa would not be a problem if countries coordinated their plans and pursued shared economic interests.
“The refinery here in Lamu can be there. The one in Tanga can be there. The one in Uganda will be there. The one in Nigeria can also be there. But I’m really happy with this one at Lamu too,” Museveni said.
Museveni stresses value addition
Museveni said African countries had lost significant economic opportunities by exporting raw materials and importing finished products.
He cited coffee, cotton and gold as examples of commodities whose value increases substantially through processing, saying the additional income and employment should benefit African economies.
“When we sell a bean of coffee, after the husking, removing the skin, you get $2 a kilo. When it is roasted, ground and packed, the one who did it gets $40,” he said.
He said the gap between the value of raw materials and finished products represented lost income, industrial opportunities and jobs for African countries.
Museveni said Uganda’s decision to prioritise domestic oil refining before exporting crude was intended to ensure the country captured more economic benefits from its petroleum resources.
He recalled that when Uganda’s oil deposits were discovered, some people questioned whether establishing a refinery would be economically viable. However, he said his engagements with other oil-producing countries reinforced his view that African countries needed domestic refining capacity.
He also cited gold and cotton, saying their processing could create additional industries and employment beyond the production of raw materials.
Calls for regional integration
Museveni renewed his call for deeper political and economic integration among East African countries, saying greater integration would enable the region to share jobs, revenue and industrial opportunities more effectively.
He said the Lamu refinery demonstrated the importance of regional integration, particularly because East African countries share markets, infrastructure and natural resources.
Museveni compared the situation with Nigeria, where crude oil produced in one part of the country can be transported to another for refining without the complications associated with international borders.
He said greater regional integration would allow Ugandans to access employment opportunities in industries established in neighbouring countries while participating in the wider regional economy.
He cited discussions with President Ruto about a proposed iron ore processing factory in Mombasa, questioning how Uganda would benefit if its raw materials were processed in Kenya but Ugandans had limited access to jobs and other economic opportunities.
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“Although the refinery is here, they will also get profit. But it does not answer the issue of jobs,” Museveni said.
He said political integration would help address such concerns by facilitating the movement of people, sharing of revenue and access to employment across the region.
Museveni congratulated Dangote on the investment and thanked Ruto for attracting the project to Kenya.
Ruto outlines expected benefits
President Ruto described the groundbreaking as a major step towards transforming Kenya and the wider African economy through industrialisation, energy security and value addition.
He said the project would turn the region’s ambition of processing its own resources into a major industrial undertaking.
“Today we break ground in Lamu. We turn a proposal into an industry. We transform a long-held ambition into real opportunity for Kenya, for East Africa and for our continent, Africa,” Ruto said.
He said the refinery would be designed to process up to 700,000 barrels of crude oil per day and serve markets across East Africa and beyond.
Ruto also emphasised the need for communities in Lamu and other parts of Kenya to benefit through employment, skills development and opportunities for local businesses.
He said technical and vocational institutions and universities should prepare welders, technicians, engineers and managers to meet the project’s labour requirements.
Local enterprises, he added, should be positioned to supply transport, food, accommodation, construction materials, maintenance, logistics and professional services.
Dangote promises jobs and skills training
Dangote, Chairman and Chief Executive Officer of Dangote Industries Limited, said the project was intended to strengthen Africa’s industrial capacity by reducing dependence on imported refined petroleum products and retaining more value within the continent.
He said Africa needed to move beyond exporting crude oil, minerals and agricultural commodities while importing finished products.
“Africa cannot build lasting prosperity by exporting what it has and importing what it needs. We must produce more of what we consume; we must process more of what we produce,” Dangote said.
He said the project would create opportunities in the energy, petrochemical, logistics, engineering and manufacturing sectors.
Dangote said the company planned to establish a training school to equip 1,000 local residents with technical and engineering skills.
He also said the project could support approximately 60,000 jobs during construction, while local businesses would be encouraged to participate in its supply chains.
The industrialist said the refinery would form part of a wider industrial ecosystem, generating demand for skilled workers, suppliers, entrepreneurs and service providers.
He pledged to return to Kenya to commission the facility within 40 months of the groundbreaking.
According to Dangote, the refinery will have a processing capacity of approximately 700,000 barrels of crude oil per day and include petrochemical production and power-generation facilities.
He said up to 30% of the refinery’s equity had been earmarked for East African countries, allowing participating states to share in the investment’s returns.
Lamu positioned as regional energy hub
The refinery is planned for Lamu Port along the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor, a regional infrastructure initiative linking Kenya with Ethiopia, South Sudan and other markets.
Project details presented at the ceremony indicate that the facility is expected to process crude from Kenya’s Lokichar oil fields in Turkana and other sources in East Africa.
Its intended markets include Kenya, Uganda, Tanzania, Ethiopia, South Sudan, the Democratic Republic of Congo and other countries in the region.
The investment is estimated at $16 billion and is expected to support downstream industries, including petrochemicals, fertiliser manufacturing, packaging and other petroleum-related businesses.
The project is also expected to complement existing and planned regional infrastructure, including the East African Crude Oil Pipeline linking Uganda’s oil fields in Hoima to the Tanzanian port of Tanga.
Dangote said the investment was part of a broader plan to expand the group’s investments in infrastructure, minerals, ports, power and chemicals.
The groundbreaking ceremony was attended by several African leaders and representatives, including Togolese President Jean-Lucien Savi de Tové, Benin’s President, Ethiopian Prime Minister Abiy Ahmed Ali and former Nigerian President Olusegun Obasanjo.
Delegations from Burundi, Rwanda, South Sudan, Tanzania and other countries also attended.
Lamu County Governor Issa Timami welcomed the investment, saying it offered prospects for employment, business growth and infrastructure development in the region.
The refinery is expected to support regional energy security and contribute to efforts to expand local processing of African raw materials and retain more value within the continent.