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As we argued last week, there is little doubt that the Dangote refinery will be a game changer in Kenya’s economy. At Sh2.5 trillion, the refinery will be more than half the total investment at the Nairobi Stock Exchange.
Listing just 30 per cent of Dangote refinery will significantly lift the NSE’s capitalisation, with capacity to democratise wealth and more than double retail investor participation.
One of its unstated impacts will be in foreign exchange retention and reducing costly refined petroleum import bills. Kenya’s annual petroleum import bill stands at approximately Sh628 billion, placing massive structural demand on our foreign exchange reserve.
In Nigeria, Dangote’s refinery reduced the fuel import bill by 30 per cent in 2025 and added an additional $5 billion in export earnings further buffering the country’s trade balance. The project needs to get off the ground in the shortest period possible, so the country harvests these benefits.
Naturally all genuine outstanding issues should be resolved with haste so that they do not cloud and over-politicise the project. The positive aspects of the refinery aside, maximising the benefits of the project will demand that government proactively and urgently acts on at least four key areas.
The first is people and services. Lamu County has a population of 150,000.
If even just half of the promised 60,000 jobs are sourced outside Lamu, the county’s population will increase by 50 per cent in under five years.
The infrastructure necessary to serve this population from water to schools to hospitals and other services ought to have been planned and funded by now. To avoid calamitous pressure for services, the National and County governments should urgently build a framework that facilitates the urgent funding of such services including additional conditional transfers from National government to accelerate capacity.
Government should also provide private actors with incentives and concessions to enable them invest in the support systems quickly, including housing. I imagine that PS Charles Hinga is already putting up affordable housing in Lamu with all the necessary infrastructure.
Lie idle for years
The second is the supporting infrastructure to actualise the refinery’s promise particularly in the energy sector. Dangote has indicated that the refinery will add 500MW to the national grid.
If the benefit of this power is to be maximised, KENGEN should ensure the off take for such a large quantity of power is in place in good time.
KETRACO should also invest as a matter of urgency in the transmission infrastructure. Like Turkana Wind Wiper, Dangote could complete its generation plant that will then lie idle for years before domestic readiness to buy.
The LAPSETT corridor pipeline to export the oil before the trucks pour in should also be a matter of priority. The third area that requires policy rethink is the refinery’s impact on green energy policy.
Last year, Kenya began duty free quota for the first 100,000 electric cars. The refinery puts brakes on our road to clean energy and complicates that policy roadmap.
The regulator should be considering how to balance the consequent policy contradictions.
The fourth area the government and its regulatory agencies need to focus on is disruption of industry. At 700,000 barrels a day, far beyond what Kenya needs, the refinery will be a monopoly much at the expense of oil marketing companies.
The refinery will challenge established supply networks and government-to-government import frameworks and compress wholesale margins.
Inevitably, some companies will go under. These realities demand that we operate proactively, quicky.
The Multi governmental committee under the leadership of the Deputy President is a good first step to unlocking barriers and entry of the Dangote refinery.
It enabled a mega project of that size to be conceived and commenced within a short period of just six months, pointing to the agility of the private sector when there is an enabling environment. But beyond the launch, there is need to think bigger.
This may be the time for government to create a multisectoral investment committee that brings together private sector, economists, county government, energy and social development actors.
Such a team would better predict and mitigate the disruptive impacts that the refinery will bring across all sectors, even as it transforms our economy. These however are good problems, with possible solutions. They only demand proactivity.
-The writer is an advocate of the High Court of Kenya
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As we argued last week, there is little doubt that the Dangote refinery will be a game changer in Kenya’s economy. At Sh2.5 trillion, the refinery will be more than half the total investment at the Nairobi Stock Exchange.
Listing just 30 per cent of Dangote refinery will significantly lift the NSE’s capitalisation, with capacity to democratise wealth and more than double retail investor participation.
One of its unstated impacts will be in foreign exchange retention and reducing costly refined petroleum import bills. Kenya’s annual petroleum import bill stands at approximately Sh628 billion, placing massive structural demand on our foreign exchange reserve.
In Nigeria, Dangote’s refinery reduced the fuel import bill by 30 per cent in 2025 and added an additional $5 billion in export earnings further buffering the country’s trade balance. The project needs to get off the ground in the shortest period possible, so the country harvests these benefits.
Naturally all genuine outstanding issues should be resolved with haste so that they do not cloud and over-politicise the project. The positive aspects of the refinery aside, maximising the benefits of the project will demand that government proactively and urgently acts on at least four key areas.
The first is people and services. Lamu County has a population of 150,000.
If even just half of the promised 60,000 jobs are sourced outside Lamu, the county’s population will increase by 50 per cent in under five years.
The infrastructure necessary to serve this population from water to schools to hospitals and other services ought to have been planned and funded by now. To avoid calamitous pressure for services, the National and County governments should urgently build a framework that facilitates the urgent funding of such services including additional conditional transfers from National government to accelerate capacity.
Government should also provide private actors with incentives and concessions to enable them invest in the support systems quickly, including housing. I imagine that PS Charles Hinga is already putting up affordable housing in Lamu with all the necessary infrastructure.
Lie idle for years
The second is the supporting infrastructure to actualise the refinery’s promise particularly in the energy sector. Dangote has indicated that the refinery will add 500MW to the national grid.
If the benefit of this power is to be maximised, KENGEN should ensure the off take for such a large quantity of power is in place in good time.
KETRACO should also invest as a matter of urgency in the transmission infrastructure. Like Turkana Wind Wiper, Dangote could complete its generation plant that will then lie idle for years before domestic readiness to buy.
The LAPSETT corridor pipeline to export the oil before the trucks pour in should also be a matter of priority. The third area that requires policy rethink is the refinery’s impact on green energy policy.
Last year, Kenya began duty free quota for the first 100,000 electric cars. The refinery puts brakes on our road to clean energy and complicates that policy roadmap.
The regulator should be considering how to balance the consequent policy contradictions.
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The fourth area the government and its regulatory agencies need to focus on is disruption of industry. At 700,000 barrels a day, far beyond what Kenya needs, the refinery will be a monopoly much at the expense of oil marketing companies.
The refinery will challenge established supply networks and government-to-government import frameworks and compress wholesale margins.
Inevitably, some companies will go under. These realities demand that we operate proactively, quicky.
The Multi governmental committee under the leadership of the Deputy President is a good first step to unlocking barriers and entry of the Dangote refinery.
It enabled a mega project of that size to be conceived and commenced within a short period of just six months, pointing to the agility of the private sector when there is an enabling environment. But beyond the launch, there is need to think bigger.
This may be the time for government to create a multisectoral investment committee that brings together private sector, economists, county government, energy and social development actors.
Such a team would better predict and mitigate the disruptive impacts that the refinery will bring across all sectors, even as it transforms our economy. These however are good problems, with possible solutions. They only demand proactivity.
-The writer is an advocate of the High Court of Kenya
By Kamotho Waiganjo