Dangote Says He Is Ready for Legal Challenges as Kenya Refinery Project Faces Court Dispute

Africa’s richest man and President of Dangote Industries Limited, Aliko Dangote, has said he is prepared to defend his businesses against legal challenges as his group moves ahead with plans for a $15bn–$16bn oil refinery in Lamu, Kenya. Dangote made the remarks during a fireside discussion at the Nairobi Securities Exchange as his company prepared to break ground on the planned 700,000-barrel-per-day refinery. His comments came days after a Kenyan court issued an order requiring the existing status quo to be maintained at the proposed project site pending a further hearing over a land dispute. The court action has raised questions about activities at the site, although Dangote Group has maintained that the legal proceedings will not stop the planned groundbreaking ceremony. The Malindi Environment and Land Court issued the order on September 25, with the case scheduled for further hearing on October 14. According to reports, the suit was filed by 133 residents of Chandavai in Lamu County who claim that the land earmarked for the refinery forms part of their ancestral land. Dangote said such legal challenges were not unusual in the course of doing business in Africa and expressed confidence that his group could deal with them. He referred to previous difficulties encountered by his businesses on the continent, including a dispute in Senegal that, according to him, resulted in one of the group’s factories being stopped for about a year before the matter was taken through the courts. The businessman said his group was therefore prepared to respond to anyone seeking to challenge its projects through legal means. The Dangote Group has separately said the Kenyan court order does not prevent the scheduled groundbreaking ceremony but could affect activities at the project site because the parties are required to maintain the existing situation until the case is heard. Reuters also reported that Dangote intended to proceed with the launch despite the court action. $16bn refinery planned for Lamu The proposed Lamu refinery is designed to have a processing capacity of about 700,000 barrels of crude oil per day and is expected to serve the East African market. Dangote has put the estimated cost of the project at between $15bn and $16bn, with the facility expected to become one of the largest refining projects in the region. The company has said the refinery is intended to replicate aspects of the Nigerian Dangote Refinery while supplying petroleum products to markets across East Africa and beyond. Kenyan media reported that the project is expected to directly employ about 60,000 people during its development and operation-related activities, according to Dangote. The refinery is also expected to create opportunities for businesses and suppliers around the project. Reuters reported that regional governments have been offered a combined 30 per cent stake in the Kenyan project, with Kenya and Rwanda among those showing interest. The proposed ownership structure is part of Dangote’s broader push to increase African participation in his businesses. Dangote willing to reduce refinery stake Beyond the Kenyan project, Dangote used the Nairobi event to discuss the future ownership of his businesses. He said he was willing to reduce his personal ownership of the Dangote Petroleum Refinery to as low as 20 to 25 per cent if demand from African investors justified additional share sales. The comments come as the Nigerian refinery is conducting a $1.6bn initial public offering, with the offer running through October 13. The IPO is intended to widen public participation in the refinery and support its expansion plans. Dangote said the group could approach regulators for approval to sell additional shares if demand remained strong. The proposed approach would allow more African investors to acquire stakes in major industrial assets while giving shareholders a greater role in corporate governance. He also indicated that the planned Lamu refinery could eventually be listed on the Nairobi Securities Exchange rather than being listed only in Nigeria. The proposal would allow investors in Kenya and other African markets to participate directly in the ownership of the project. Kenyan officials have also indicated interest in taking an equity position in the refinery, with Kenya initially allocated a 10 per cent stake and the possibility of acquiring more if other regional governments do not take up their allocations. Court dispute remains unresolved Despite Dangote’s confidence in moving forward, the land dispute surrounding the Lamu project remains unresolved. The court order does not amount to a final determination of the residents’ claims to the land. The substantive issues are expected to be considered at subsequent proceedings, with the next hearing scheduled for October 14. As a result, the planned groundbreaking and the eventual construction of the refinery should be distinguished from the outcome of the court case. Dangote Group has said the ceremony can proceed while acknowledging that some activities at the site may be affected by the court’s directive. The Lamu project comes as Dangote continues to expand his refining interests beyond Nigeria. His Lagos refinery is also undergoing a major capital-raising exercise aimed at expanding its capacity, while the group seeks greater participation from African investors. For now, the Kenyan refinery project is moving forward amid the legal challenge, with the court dispute expected to determine what activities can take place on the contested land while the case proceeds.