The Independent Uganda: You get the Truth we Pay the Price
Nairobi, Kenya | URN | President Yoweri Museveni has hinted at the possibility of using Uganda’s crude oil as a contribution to putting up a mega crude oil refinery in East Africa to be located in Tanga, Tanzania. The move is part of broader efforts to boost local refining capacity and reduce Africa’s dependence on imported petroleum products.
The plans for a refinery got a major boost today, as Aliko Dangote, Africa’s richest man, pledged to help East Africa build the new oil refinery in Tanzania.
“I can give commitment to the two presidents. If they will support the refinery, we’ll build the identical one that we have in Nigeria – 650,000 barrels here,” Dangote said.
Earlier, President Museveni revealed that President William Ruto recently sent him a message about the possibility of putting up a refinery in Tanga so that the crude oil from Kenya, South Sudan, and DRC can be used as feedstock.
“So, therefore, when His Excellency Ruto recently sent me a message, I supposed that the surplus oil, which we had given to Total to take through Tanga, to I don’t know where, would be our contribution to the refinery in Tanga. Number one. Then later on, we can add the petroleum from the other area, Congo, from South Sudan.”
He said part of the oil to be transported through the East Africa Crude Oil Pipeline (EACOP) could be refined in Tanga instead of being sent to refineries far off the continent.
The president was speaking at the opening of the Africa Infrastructure Summit hosted by the Africa Finance Corporation in Nairobi, Kenya.
Museveni said that Uganda will retain its existing plan to build a 60,000-barrel-per-day refinery for domestic consumption and to supply neighbouring countries.
“You know, I’m also tactical because Total was insisting that they should take all the oil. Why do you take all the oil when the users are here? Sorry. There is no money in the refinery. I said you are lying,” said Museveni, revealing details of their boardroom negotiations.
The government of Uganda plans to develop a 60,000-barrel-of-oil-per-day refinery at Kabaale, Buseruka Sub-County in Hoima District.
Alpha MBM Investments, an investment firm from the United Arab Emirates (UAE), is now the lead partner in the oil refinery project.
The entity, which is led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of the Dubai Royal Family, will partner with the Uganda National Oil Company (UNOC) to develop the refinery.
The summit has attracted infrastructure financiers, fund managers, investors, and industry leaders, with a mandate to unlock domestic capital and turn the continent’s industrial ambitions into a tangible, job-creating reality.
Held under the theme “Infrastructure as the Engine of Industrialisation”, the summit convened decision-makers to originate and advance bankable projects, strengthen regional integration, and accelerate Africa’s industrial development.
President Ruto noted that the summit is being held in the backdrop of global economic shocks and disruptions arising from the war in the Gulf, from the war in Ukraine a few years ago to the war in the Gulf in a few weeks.
“Africa today produces approximately 10 million barrels of oil per day, which is about 10% of global output. Yet, paradoxically, we remain net importers of petroleum products to the tune of 120 million metric tonnes annually at a cost of about $90 billion.”
He said that at an average export price of $75 per barrel, Africa’s crude production is valued at roughly $270 billion each year.
“However, if this same production were refined domestically and exported as finished products at an average price of U.S. dollars 800 per ton, it would generate over $500 billion,” said Ruto.
According to Ruto, Africa foregoes an income of about $230 billion, which is nearly 7.5% of its GDP, from just oil alone.
“This does not even account for the additional gains from downstream industries such as plastics and fertilizers, which we currently import and which could add another 2 to 3% of our GDP.”
He confirmed having initiated talks with Alhaji Aliko Dangote, chairman and CEO of Dangote Group, about the negotiations for the refinery not in “Nairobi but Tanga.”
“We are discussing that we are going to have a joint refinery in Tanga to benefit all of us,” Dangote said at the forum.
“My commitment today here is that we will lead the refinery. We’ll make sure that that refinery is built within the next four to five years.”
Participating in a panel discussion with the two Presidents, Dangote, pledged to help East Africa build a new oil refinery in Tanzania. Asked why Africa has not constructed refineries in the past, Dangote blames the anomaly on global financial institutions.
“Normally, when you go to those financial institutions, their interest is not to develop Africa. Their interest is to develop themselves,” he said.
Africa, which accounts for about 7% of the world’s crude output, had seen refining capacity shrink by about a third in the past two decades before Dangote started his facility in Nigeria.
The continent’s biggest refinery reached full capacity weeks before the conflict in Iran and has helped Nigeria become self-sufficient in fuel.
Dangote is planning a $40-billion expansion of his industrial empire, aimed at more than doubling capacity at his 650,000 barrel-a-day plant in Lagos.
The fallout from the conflict in the Persian Gulf has strained fuel and fertilizer supply chains, sharpening the vulnerability of import-dependent African economies and driving more countries to source supplies from Dangote’s refinery, which is shipping products as far as Tanzania and sending record volumes of jet fuel to Europe.
