Nigerian billionaire Aliko Dangote's $16 billion Kenya refinery deal faces mounting scrutiny

Pressure is building in Kenya for the government to publish the terms of Nigerian billionaire Aliko Dangote's planned $16 billion oil refinery in Lamu, less than two weeks after President William Ruto and Dangote broke ground on the project.

The Star, one of Kenya's biggest newspapers, said in an editorial on Oct. 11 that the deal "must be placed under the microscope." It asked what Kenya has agreed to, what risks the country has taken on and whether the public will get a fair return.

"Demanding to see the contract is not opposition to investment but responsible citizenship," the paper said.

The editorial joins a growing list of challenges from lawmakers, opposition leaders, activists and consumer groups who want to see the agreements behind the 700,000-barrel-a-day refinery, which is due to be completed in about 40 months.

Who is asking questions

Nairobi Senator Edwin Sifuna has asked the Senate's energy committee to obtain "all records" relating to the project, including how much Kenyan taxpayers will contribute, where the money will come from, what public participation took place and who the beneficial owners of the project company are.

The Consumers Federation of Kenya has petitioned a parliamentary committee over Kenya's proposed stake, asking whether the money has been budgeted, committed or already paid. Kenya has considered taking 10% of the refinery for about $500 million, or roughly 65 billion shillings, as part of a combined 30% that Dangote has offered East African governments.

Ekuru Aukot, leader of the Thirdway Alliance party, has written to the attorney general demanding the full agreement, its side letters and the names of the project's shareholders and directors. Former Interior Minister Fred Matiang'i, who is running for president in 2027, said commercial or security concerns should not be used to shield the contracts from Parliament.

Opposition leader Kalonzo Musyoka welcomed the investment but said the opposition wanted "due process," pointing to the collapse of a plan to lease Nairobi's main airport to India's Adani Group in 2024.

The court cases

The project is also facing two court cases. On Oct. 6, the High Court in Nairobi certified as urgent a petition by activist Francis Awino seeking disclosure of the public money, land, tax incentives and guarantees the government plans to commit. The case is due for mention on Nov. 12.

Separately, 133 residents are challenging the use of a parcel of land in the Hindi and Manda Magogoni area, which they claim as ancestral land. The Environment and Land Court in Malindi has ordered both sides to keep the status quo on the parcel. The case returns to court on Oct. 14.

Ruto has defended keeping the agreement private and told critics to seek it through Parliament. He has said the government will take its stake through the National Infrastructure Fund, using public assets including land. The government has identified about 9,000 acres for the project and is seeking another 3,000 acres for a special economic zone and a new city, according to the president.

Dangote's East African bet

The Lamu refinery is the centerpiece of Dangote's push beyond Nigeria. East Africa has had no working refinery since Kenya's Mombasa plant shut in 2013 and imports most of its fuel. The refinery is meant to supply Kenya, Uganda, Tanzania, Ethiopia, Rwanda, Burundi, South Sudan and Congo, and Dangote has said it will eventually list on the Nairobi Securities Exchange.

Back home, Dangote is selling shares in his 650,000-barrel-a-day Lagos refinery in an initial public offering that closes on Oct. 13. On Oct. 9, Nigeria's finance minister said the country does not have enough crude to fully supply that plant.