Museveni backs Lamu refinery but says Uganda will not invest yet as Tanga questions remain

Ugandan President Yoweri Museveni has backed the $16 billion Dangote oil refinery in Lamu but said Uganda is not yet ready to invest in the project, citing unresolved questions over an earlier regional refinery proposal in Tanga, Tanzania.

Speaking during the groundbreaking ceremony in Lamu on Wednesday, Museveni said he supports the refinery and Africa's broader push to process its raw materials locally, but wants discussions with Presidents William Ruto and Samia Suluhu Hassan before Uganda makes an investment decision.

“This one I support, but I will not invest yet,” Museveni said. “I want to discuss with Samia and His Excellency Ruto to find out what happened to that refinery of Tanga.”

The remarks introduce an important qualification to Uganda's previous position. In May, Uganda's State House said Museveni was ready to support Dangote's proposed regional refinery and buy shares in it, when Lamu, Mombasa and Tanga were still being assessed as possible locations.

Since then, the regional energy landscape has changed. Uganda and Tanzania have signed an agreement to develop a regional energy hub in Tanga, while Uganda is also pursuing its own smaller refinery at Hoima.

Museveni: Africa has been betrayed by exporting raw materials

Despite his caution over investment, Museveni strongly endorsed the economic argument behind the Lamu project.

He said Africa had lost jobs and income for decades by exporting raw materials and importing higher-value finished products.

“I'm very happy to be alive and see the betrayal of Africa, which has been going on for the last 70 years, coming to an end,” Museveni said.

Using coffee as an example, he argued that African producers earn only a fraction of the final value because roasting, grinding, packaging and other processing takes place elsewhere.

He made a similar argument about cotton and minerals, saying every stage of processing that happens outside Africa represents jobs and income lost by the continent.

Museveni said cotton illustrates the problem particularly clearly because employment can be created across farming, ginning, spinning, weaving, textile printing and garment manufacturing.

In many African economies, he said, only the first stages take place locally.

Museveni praises Dangote's shift from importer to manufacturer

Museveni also praised Aliko Dangote's evolution from an importer into one of Africa's largest industrial manufacturers.

Drawing on terminology associated with Chinese revolutionary leader Mao Zedong, Museveni described Dangote's earlier importing business as “comprador bourgeoisie” before characterising his current manufacturing investments as national capitalism.

He said investments such as Dangote's cement factories and oil refineries demonstrate the kind of African-owned industrial capacity the continent needs.

The Lamu refinery formally broke ground on Wednesday and is designed to process 700,000 barrels of crude oil per day. Dangote says construction should take about 40 months, while regional governments have been offered a combined 30 per cent equity stake.

Uganda still pursuing Hoima refinery

Museveni made clear that Uganda's own refinery plans would continue regardless of the Lamu development.

“We are going to build a small refinery in Uganda. We had planned this long ago. We can't change that,” he said.

Uganda's planned Hoima refinery is designed to process about 60,000 barrels per day, primarily serving Uganda and nearby inland markets.

His comments highlight the increasingly complex energy picture emerging in East Africa, with Kenya backing the giant Lamu refinery, Uganda developing Hoima and Uganda and Tanzania simultaneously exploring the Tanga energy hub.

Museveni nevertheless argued that regional refining and local processing ultimately serve the same objective: keeping more of Africa's natural-resource value, industries and jobs within the continent.