By Brian Hungwe
Africa’s richest man, Aliko Dangote, has earned a reputation as someone who can transform a country’s economic fortunes. After launching Nigeria’s only oil refinery in 2024, the country’s annual GDP growth jumped from 2.74% in 2023 to 3.4% in 2024,and is projected to hit 4.3% in 2026. Analysts estimate the refinery could boost Nigeria’s economy some $400 billion by 2030, driven by a revival of the country’s manufacturing sector.
Perhaps most importantly, the refinery has proved that Africa can build and operate world-class industrial infrastructure. After the war in Iran strangled oil exports from the Gulf, Dangote’s refinery upped its output to over 90% capacity. By the end of March, the refinery reported it was receiving orders from beyond the continent, particularly for jet fuel, which is in globally short supply. The 650 000-barrel-per-day refinery is ending Nigeria’s decades-long reliance on imported fuel, with plans to double capacity through further investment. As reliance on imports decline, many Nigerians are hoping this will translate into cheaper petrol prices at home in the near future.
The buzz followed Dangote into his meeting with Tanzanian President Samia Suluhu Hassan this month, where the pair discussed a proposed refinery servicing East Africa out of the Tanzanian port of Tanga. Despite reportedly favouring a rival site in Mombasa, Dangote emerged from the meeting full of praise for Tanzania’s President.
"Once she promises, she delivers,” he said.
The refinery is projected to cost $17 billion, making it one of the largest private infrastructure investments ever contemplated in East Africa. Designed to process oil from Uganda and Kenya, as well as imported crude from the Gulf, the facility is seen as key to reducing the region’s dependence on imports from the Middle East. There is currently no refining capacity at all in East Africa and a Dangote plant could fundamentally reshape the region's economic future.
Recent analysis by the IMF shows how African countries are restricted in their spending by a combination of surging oil prices and high interest payments for sovereign debt. Governments in sub-Saharan Africa are mostly oil importers and spend on average 17% of total revenue on servicing their debts, compared to a global median of 5.5%. When crises occur, like the war in Iran, oil-importing African countries have very little headroom to protect citizens.
In May, Kenya’s Petroleum Regulatory Authority raised fuel prices by 23.5%. The decision triggered violent protests which left four people dead and a further 30 injured. Similar unrest has been reported in Mozambique and Comoros. Exposure to volatile global markets is extracting a heavy toll on African citizens and governments desperately need to build regional resilience.
Against this backdrop, Kenya and Tanzania are both being eyed up as potentially strategic locations for an East African refinery. However, in an unexpected turn, Kenyan President William Ruto has publicly endorsed Tanga over his own home port of Mombasa. The case for Tanzania rests on more than just President Samia’s personal track record for delivery.
Tanzania and neighbouring Uganda are working together to finish the East African Crude Oil Pipeline, connecting oil fields in Uganda’s Hoima region to the Chongoleani export terminal near Tanga. Already at 84% completion, this vital artery could with time provide most if not all the crude oil needed to make a potential Dangote refinery viable.
Meanwhile, Tanzania is upgrading some 2,809km of Standard Guage Railway, improving links to Burundi, the DRC, Rwanda and Uganda. Earlier this month, President Samia and Rwandan President Kagame agreed to deepen cooperation on the railway, with Samia emphasising Tanzania’s responsibility “to ensure efficient and reliable services to landlocked neighbours.”
In the last quarter of 2025, East Africa’s trade with the rest of the continent grew by more than 40%, the fastest pace in three years. Upgraded rail connections will accelerate that momentum further, cementing Tanzania’s position as a logistics hub that can deliver refined petroleum products across Africa.
Some analysts have pointed to the difference in size between Tanzania and Kenya’s domestic markets as a mark against a Tanga refinery, with Kenya consuming some 32 500 barrels per day more than its southern neighbour. However, the East African Community operates as a customs union, meaning a Tanzanian refinery could serve Kenya, Uganda, Rwanda, Burundi, the DRC, and South Sudan with minimal tariff friction and no need to build extra miles of pipeline to Mombasa.
That arithmetic changes the picture considerably. Kenya's apparent market advantage largely dissolves when the full EAC catchment area is factored in, a combined population of over 300 million people, almost none of whom have access to locally refined petroleum.
The broader economic case is harder to ignore. Tanzania imports 100% of its refined petroleum products, as do most of its neighbours. A refinery at Tanga would not eliminate that exposure overnight, but it would fundamentally alter the region's negotiating position in global energy markets and provide a domestic supply buffer that no East African country currently possesses.
Wherever Dangote decides to park his refinery the effects are sure to be transformative, and Tanzania, with its rapidly accelerating infrastructure and reputation for getting things done, is certain to play a vital role.