Why Dangote is expanding petroleum network across Africa

Aliko Dangote, president of Dangote Industries Limited, is expanding the group’s petroleum products distribution network across East and Central Africa, with investments in pipeline infrastructure and storage facilities aimed at connecting its Nigerian refinery to more regional markets.

The expansion follows the recent acquisition of a 25 percent stake in Kenya’s petroleum products pipeline network, the development of a distribution corridor linking Djibouti to Ethiopia’s capital, Addis Ababa, and a project in Cameroon that is nearing completion.

At a recent interview with the Financial Times, Dangote said the investments would help address longstanding supply challenges, reduce logistical bottlenecks and improve the movement of refined petroleum products across the continent.

“With the support from the President of Kenya, we bought 25 per cent of the pipeline network for the distribution of petroleum products,” he said, citing the $327 million investment in the Eastern African country.

In Ethiopia, the group is developing a corridor from Djibouti to Addis Ababa, supported by tank farms for storing and distributing petroleum products. The infrastructure is expected to support deliveries into the landlocked country through Djibouti, a key maritime gateway for Ethiopian trade.

In Cameroon, Dangote said a project was nearing completion, although he did not provide further details of the facility in the remarks available.

The group is also positioning Namibia as a gateway into Southern Africa, with plans to ship refined petroleum products from its refinery in Lagos to the country before distributing them to neighbouring markets, including Botswana and South Africa.

“From our refinery to Namibia is just about four days of steaming,” Dangote said.

He also outlined plans for distribution routes through Zimbabwe and Zambia to extend the group’s reach across multiple Southern African markets.

The expansion would connect Dangote’s 650,000-barrel-per-day refinery in Lagos to markets that have historically relied on imported petroleum products and fragmented distribution networks.

Beyond distribution infrastructure, Dangote disclosed plans to establish a refinery with a proposed capacity of about 700,000 barrels per day in Lamu, Kenya, to serve East Africa’s industrial and mining sectors.

He said the proposed facility would source crude oil from different markets rather than depend exclusively on production from Uganda or Kenya. Access to deep water, marine facilities and adequate water resources informed the choice of Lamu following technical assessments of potential locations.

The proposed refinery would extend Dangote’s refining operations beyond Nigeria and position the group to supply a wider regional market.

The expansion forms part of a wider investment programme under which Dangote Industries has budgeted approximately $50 billion between 2026 and 2030.

Dangote said African countries needed to strengthen domestic manufacturing rather than depend heavily on imported goods, arguing that unrestricted foreign competition could undermine local industries and employment.

“If America is now saying, ‘we are going to protect our industries’, who are we in Africa not to protect our own industries?” he said.

He said Africa’s industrialisation would depend on effective industrial policies, stronger financial institutions and improvements in infrastructure, particularly electricity supply.

Unreliable power, he argued, remains a major constraint on manufacturing, mining and mineral processing, preventing many countries from adding value to their natural resources before export.

Dangote estimated that about 650 million Africans lack access to electricity, saying that expanding supply would create opportunities for manufacturing, employment and economic diversification.

“The legacy we are trying to set up is: how do we industrialise our continent?” he said.