Tanzania Poised to Host Landmark Oil Refinery Project in Tanga, Boosting East Africa’s Energy Security
Tanzania has officially expressed its readiness to host a major oil refinery project in Tanga, a move that could significantly enhance energy security and regional integration across East Africa. The announcement comes in response to a proposal floated by Kenya, Uganda, and Africa’s richest businessman, Aliko Dangote, during a recent infrastructure financing conference in Nairobi.
Speaking exclusively to the Daily News, Tanzania’s Minister for Foreign Affairs and East African Cooperation, Ambassador Mahmoud Thabit Kombo, emphasized the country’s commitment to welcoming investments that align with national laws and regulations. “Our stance on the refinery project proposal is clear. We welcome all investors, provided they adhere to Tanzania’s legal investment requirements,” Kombo stated.
The refinery, expected to process crude oil transported via the East African Crude Oil Pipeline (EACOP), is seen as a game-changer for the region. The pipeline, stretching 1,443 kilometres from Uganda’s Kabaale-Hoima to Tanzania’s Chongoleani Peninsula near Tanga, will carry up to 246,000 barrels of crude oil per day.
Aliko Dangote, whose Dangote Group operates a 650,000-barrel-per-day refinery in Nigeria, has pledged to spearhead the Tanga project if regional governments reach a consensus. “If we agree with the governments involved, we will lead and ensure the refinery is built within four to five years,” Dangote said during the Nairobi conference.
Economic and Strategic Benefits
The project is expected to address longstanding challenges in East Africa’s fuel supply chain, which currently relies heavily on imports. Tanzania, for instance, imports 100% of its petrol and diesel, mainly from the Middle East. Economists argue that the refinery could reduce reliance on foreign fuel, lower costs for consumers, and boost regional self-sufficiency.
Dr. Sylvester Jotta, a business and entrepreneurship expert from Saint Augustine University of Tanzania, highlighted the potential for local value addition. “This proposal comes at a crucial time. Instead of exporting crude oil overseas for refining, we can now process it locally, reducing costs and creating economic opportunities,” he said.
The refinery is also expected to stimulate petroleum exploration in Tanzania, particularly in regions like Mtwara and Lindi, which are already rich in natural gas and show potential for oil reserves. Tanga, meanwhile, is poised to emerge as an industrial hub, attracting manufacturing industries due to improved fuel availability and affordability.
Job Creation and Revenue Generation
Beyond energy security, the project is anticipated to generate significant employment opportunities, particularly for Tanzania’s youth. It will also boost government revenue through taxes and levies, further strengthening the country’s economy.
Economic analyst Kelvin Msangi described the Tanga refinery as a strategic hedge against imported inflation and foreign exchange losses. “This project isn’t just about prestige; it’s about reducing our dependence on foreign refiners and traders,” he said. According to Bank of Tanzania data, oil imports cost the country $2.11 billion in the year ending February 2026, accounting for 13.8% of its total import bill.
Regional Collaboration and Future Prospects
The refinery project underscores the potential for regional collaboration in addressing shared energy challenges. Dr. Hildebrand Shayo, an economist and investment banker, noted that the initiative could transform East Africa’s fuel supply dynamics. “This refinery will enable the region to move from near-total dependence on imported refined petroleum to a more self-sufficient and integrated energy system,” he said.
By linking upstream producers like Uganda with regional markets, the project could also boost intra-African trade and reduce reliance on Middle Eastern fuel imports.
As Tanzania prepares to host this landmark project, all eyes are on the region’s ability to turn its energy challenges into opportunities for growth and integration.
— Reported by Nexio News
