Dangote predicts Africa could achieve refined-fuel self-sufficiency by 2030

Aliko Dangote has predicted that most African countries could become self-sufficient in refined fuel by 2030, as his company prepares to break ground on a planned refinery on Kenya’s coast.

The proposed $16 billion facility in Lamu is designed to process 700,000 barrels of crude oil per day. The company is scheduled to begin construction on Wednesday, and the project is expected to take around 30 months to build.

Expanding refining capacity

Dangote said the refinery would support a broader effort to process more of Africa’s resources within the continent rather than exporting raw materials and purchasing finished products from abroad.

“By 2030, the majority of African countries will be self-sufficient,” Dangote said, arguing that oil should be refined on African soil even if the exact location of processing differs.

He said Africa currently exports almost five million barrels of oil per day but refines relatively little of that output. In his view, increasing local processing would help retain more economic value and employment on the continent.

“The biggest problem is that we export raw materials at maybe 5 to 10 percent of its value, and then we end up buying at 100 percent of its value,” Dangote said.

He also described the planned facility as relatively small compared with the demand Africa could generate as its economies grow, although he said it would be a major refinery and investment for the region.

Crude supplies and future development

According to Dangote, the Lamu refinery would obtain crude from several sources, including the Middle East and the United States. He said it could later use increased production from Kenya, Tanzania and Mozambique as those countries produce more oil.

Dangote said the refinery would be the first stage of wider development at the site, with additional industries expected to emerge around it.

He has also argued that Africa should expand its refining capacity before its population grows further. “Are we going to wait until (Africa has) one quarter of the world’s population before we start thinking of what to do?” he said. “We have to start addressing that issue today.”

Legal and environmental opposition

The Lamu project faces a land-rights court case and opposition from Greenpeace and others over its potential environmental impact. The available information does not establish whether those challenges will delay or prevent construction.

Responding to the opposition, Dangote said, “There’s actually no problem with these sort of cases,” and added that some people did not want Africa’s development.

The planned refinery is expected to serve as a significant addition to East Africa’s industrial capacity, but its final crude-supply arrangements and completion date have not been specified.