Ruto says $16bn Lamu refinery could lift Kenya's GDP by 12%, double annual FDI

President William Ruto has said the $16 billion Dangote oil refinery planned for Lamu could increase Kenya's gross domestic product by 12 per cent and more than double annual foreign direct investment, as he positioned the project as a centrepiece of the country's industrial transformation.

Speaking during the groundbreaking ceremony on Wednesday, Ruto said the scale of the investment would have consequences far beyond petroleum production, potentially transforming Lamu into a major industrial and logistics hub.

“This investment is going to change the economy of Kenya,” Ruto said.

He projected that the refinery would raise annual foreign direct investment by about $4 billion over the next four years, taking FDI from about $3.2 billion to more than $7 billion annually.

The $3.2 billion figure corresponds with the government's previously stated estimate for FDI in 2025.

The President's projections are government estimates and will depend on the refinery securing financing, completing construction and beginning commercial operations. Independent estimates of the project's eventual GDP impact may differ.

Ruto: Africa must stop exporting raw materials and importing finished goods

Ruto used much of his address to argue that Africa's economic model must shift from exporting raw materials towards processing and manufacturing products on the continent.

He cited crude oil, cotton and cocoa as examples of commodities exported from Africa before returning as higher-value products.

“We sell crude oil, we buy refined petroleum. We sell cotton, we buy clothes. We sell cocoa, we buy chocolate,” Ruto said.

He argued that processing resources locally would allow African countries to retain more jobs, skills, businesses and income.

“Africa does not lack resources. We do not lack talent. We do not lack enterprise. We do not lack markets,” he said.

Ruto described building the continent's industrial capacity as the “unfinished economic work” of African independence.

Lamu refinery positioned as regional project

The President also sought to portray the refinery as an East African rather than purely Kenyan project.

He said he had discussed it with several regional leaders, including Rwanda's Paul Kagame, Tanzania's president, Burundi's president and Mozambique's president.

Rwanda has previously confirmed preliminary discussions over acquiring a stake in the refinery, although Kagame said details had yet to be settled.

Ugandan President Yoweri Museveni and Ethiopian Prime Minister Abiy Ahmed attended Wednesday's groundbreaking ceremony alongside Ruto and Dangote.

Dangote has offered regional governments a combined 30 per cent stake in the refinery. The company says crude could eventually be sourced from regional producers as well as suppliers in the Middle East and United States.

'Success must be measured beyond barrels and dollars'

Ruto said the refinery's impact should ultimately be assessed on more than its production capacity and financial value.

He said success should include skills acquired by Kenyans, businesses established around the project, livelihoods supported and public confidence in the development.

The President also promised residents that Lamu would benefit from the investment and associated infrastructure.

The refinery is expected to become an anchor industry for Lamu Port and the wider LAPSSET transport corridor, potentially stimulating petrochemicals, transport, engineering and other industries.

Construction of the 700,000-barrel-per-day refinery was formally launched on Wednesday. Dangote has selected Honeywell Technologies to provide engineering services, equipment and licensing, while Engineers India Limited has secured a $450 million engineering contract.

The project nevertheless faces outstanding challenges, including financing, crude supply, infrastructure requirements and legal and environmental disputes in Lamu.

Ruto himself acknowledged that the groundbreaking was only the beginning, telling those attending the ceremony that the project's targets were not guaranteed.

“A groundbreaking is a promise. A refinery is a promise kept,” he said.