African businessman, Mr Aliko Dangote, has announced plans to build a new oil refinery in Tanzania, as the war in Iran exposes the continent’s over-reliance on fuel imports from the Middle East.
The project will include a pipeline that links the Kenyan port city of Mombasa to the northeastern Tanzanian harbour of Tanga, where the facility will be situated, Kenyan President William Ruto said at an Africa Finance Corp summit in Nairobi on Thursday.
The refinery will process crude from countries, including the Democratic Republic of Congo and South Sudan, he said at the forum.
“We are discussing that we are going to have a joint refinery in Tanga to benefit all of us,” Mr Dangote said at the forum on Thursday. “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.”
The plans to build the facility in Tanzania coincide with Mr Dangote’s $40-billion expansion of his industrial empire, aimed at more than doubling capacity at his 650,000 barrel-a-day plant in Lagos.
“I can give commitment to the two presidents that were here, if they will support the refinery, we’ll build the identical one that we have in Nigeria,” Mr Dangote said on a panel discussion that included President Ruto and Ugandan President Yoweri Museveni.
Kenyan President confirmed the ongoing discussions with the Nigerian billionaire, saying the proposed project.
“Aliko is telling us that the private sector and the government can discuss a refinery in Tanzania, a joint refinery to benefit all of us. The oil will take on board the oil from Kenya, DRC, and even Uganda. We just need to construct a pipeline from Tanga to Mombasa, and the finished product will come by the already built pipeline we have in Uganda,” he said.
He said countries should avoid pursuing individual gains and instead collaborate in shaping policies that benefit the East African market.
The announcement on the oil refinery in Tanzania comes after the Nairobi Securities Exchange (NSE) Chief Executive Officer, Mr Frank Mwiti, said on April 12 that discussions had been held on how the NSE and other African exchanges could support what may become Africa’s largest initial public offering (IPO).
Dangote’s IPO is aimed at expanding Mr Dangote’s refinery business and is estimated at about $22 billion.
The planned offering is expected to float between 5 per cent and 10 per cent of the refinery’s equity. Analysts estimate the refinery’s valuation at between $40 billion and $50 billion.
The share sale targets up to $5 billion, which will make it the largest IPO ever conducted on an African stock exchange.