Every time a Ugandan motorist fills a fuel tank, pays a taxi fare or buys food at the market, the cost of fuel quietly reaches into their pocket. Now, Africa’s richest man, Aliko Dangote, is making a multibillion-dollar move that could reshape those costs, and potentially determine who holds the greatest influence over East Africa’s fuel supply. Dangote is offering investors, including wealthy Ugandans, a stake in his Nigerian oil refinery through a share sale expected to raise $1.6 billion. At the same time, his business empire is expanding into East Africa, with a planned 700,000-barrel-a-day refinery in Kenya’s coastal town of Lamu and a reported 25 per cent stake in the Kenya Pipeline Company, a critical link in Uganda’s fuel supply chain. The investments promise a more reliable regional fuel supply, potentially lower costs and new opportunities for investors. But they also raise uncomfortable questions about the growing concentration of economic power in the hands of one businessman, the future competitiveness of Uganda’s planned 60,000-barrel-a-day refinery and the ability of smaller fuel companies to compete. On October 6, the Capital Markets Authority (CMA) Uganda publicly announced Africa’s biggest IPO to Ugandan investors. Aliko Dangote launched the initial public offering (IPO). Dangote holds more than 87 per cent of the shares in Africa’s biggest refinery, which has a capacity of 700,000 barrels a day. The IPO offered 4.1 billion shares at 525 Naira (Shs 1,674 and KES 50) per share, equivalent to about 3.3 per cent of the refinery’s enlarged share capital on the base offer. Kenyan investors can also access the offer through Global Depositary Receipts (GDRs), which are to be listed on the Nairobi Securities Exchange (NSE) and traded in Kenyan shillings, subject to approvals. While this gives investors, including eligible Ugandans, a small stake in the energy project, it raises questions about market concentration in East Africa. On September 30, Dangote broke ground for a 700,000-barrel-per-day refinery in Lamu, Kenya. On October 19, while the IPO was being marketed, he acquired a 25 per cent stake in the Kenya Pipeline Company (KPC). By becoming the second-largest shareholder of KPC, behind the Kenyan government, and the majority shareholder (70 per cent) of the Lamu refinery, the Dangote Group is positioned to gain influence not only over East Africa’s energy sector but also over its infrastructure. This concentration of power could have far-reaching consequences for prospective oil-producing nations like Uganda, as it could shape regional fuel prices. Dangote’s history of market dominance and alleged anti-competitive practices can be traced back to his business practices in Nigeria’s sugar and cement sectors two decades ago. These tendencies continue today. As recently as 2026, he supplied all domestically priced Premium Motor Spirit (PMS), commonly known as petrol or gasoline, in Nigeria. In leaked diplomatic cables sent by then-US Consul General to Nigeria Brian Browne to the US State Department, in what became known as the WikiLeaks embassy cables, Browne described Dangote, noting that “he has had success blocking trade and investment that might compete with his enterprises.” He observed that it was no coincidence that many products on Nigeria’s import ban lists were items in which Dangote had major interests. FINANCIAL PERFORMANCE OF THE DANGOTE REFINERYThe refinery became commercially operational in January 2024, with total assets valued at $21 billion as of June 2026. Despite initial losses, the company achieved a dramatic turnaround in the first half of 2026 following the outbreak of the US–Iran war. The refinery recorded a net loss of $1.51 billion in 2024. In 2025, net losses narrowed to $476 million, with $282 million of that total occurring in the first half of the year. In the first half of 2026, it recorded a net profit of $1.82 billion. This windfall largely stems from a global shortage of refined fuels relative to demand, driven by supply disruptions linked to the war. Simply put, the refinery lacks a track record of operating at full capacity, the very projection driving its IPO pitch. Worse still, as supply routes and facilities normalize, these recent, exceptional profit splits will decline. STATUS OF THE IPO IN UGANDA In Uganda, the CMA approved the IPO and restricted it to high-net-worth individuals and professional investors. The prospectus that Ugandan investors received is the exact same one issued in Nigeria by the Securities and Exchange Commission (SEC). When asked why a local prospectus was not issued for domestic investors, Dennis Kizito, the CMA’s Director of Market Supervision, said, “Our concern is investor protection. This is a cross-border offer, so investors must understand more than the company’s business. Restricting the offer to highnet-worth individuals and professional investors is intended to limit participation to investors who are better positioned to assess those complexities and obtain professional advice.” Kizito said CMA Uganda’s public notice identifies cross-border risks, but is not equivalent to a Uganda-specific prospectus or a comprehensive risk summary. Regarding the risks to a Ugandan investor, he replied, “The company’s performance and share price can fall, investors could lose money, and dividends are not guaranteed. Exchange-rate movements can also reduce the Uganda shilling value of their shares, dividends, or sale proceeds. “We have publicly warned investors about foreign-exchange, market, custody, and taxation risks, as well as the mechanisms for exercising their rights. Investors are required to read the offer documents, seek independent professional advice where necessary, and deal only with a licensed intermediary specifically authorised to distribute this offer.” Asked why the Dangote IPO was exempted from a lengthy local registration process and allowed to rely on the prospectus approved in Nigeria, Kizito said, “The statutory basis identified is Section 103 of the Capital Markets Authority Act, Cap. 64. That provision was the basis for granting the issuer a conditional exemption from the requirements of Part XII and the related regulations.”IMPACT ON THE LOCAL FUEL MARKET The Dangote Group expects to raise $1.6 billion from its IPO, which is likely to see Dangote’s net worth climb to $58 billion, according to Bloomberg Billionaires Index estimates. The IPO prospectus names the expansion of the Nigerian refinery as the use of the proceeds. However, Dangote Group Vice President for Oil and Gas Edwin Devakumar has separately said the proceeds will also support the financing of its proposed East African refinery projects, including the planned Lamu refinery in Kenya. This raises the question of how capital raised by the Nigerian issuer would support the group’s regional projects, and what that could mean for competition in East Africa’s energy market. Dangote’s fuel is scheduled to come online in 2030 and is expected to be cheaper than fuel refined from Uganda’s crude. First, Ugandan crude costs more to process because of its waxy nature. Additionally, transporting it is expensive because it requires heated vessels, and Uganda’s refinery has a limited capacity of 60,000 barrels per day. Conversely, Dangote’s Lamu refinery will supply fuel to East Africa at a lower cost due to reduced transportation expenses, an advantage Dangote can influence as a major shareholder in the pipeline. This competitive pricing will likely undercut fuel refined from Ugandan crude in the local market. Patrick Lubwama, Country Manager of Hass Petroleum Uganda, one of the leading downstream petroleum operators in Uganda, explains, “Dangote’s entry is significant, but its impact on Uganda depends on how it fits into a supply chain we have already built. “UNOC (Uganda National Oil Company) is the sole importer and Vitol its exclusive supplier, backed by a $2 billion facility that also financed UNOC’s 20.15 percent stake in Kenya Pipeline Company. While that contract runs, any Dangote product would most likely reach us through Vitol, and we only get a real choice of suppliers at renewal. “In the short term, oil marketing companies will see little change, since the Lamu refinery is not expected before about 2030 and we buy from UNOC, not from refiners. Over time, a regional refinery should improve supply security and put downward pressure on supply costs, but I would not promise cheaper fuel at the pump. “Product from Lamu could pass through Dangote, Vitol and UNOC before reaching us, each adding a margin, so Uganda risks paying more than its neighbours. At renewal, policymakers should structure procurement to cut intermediary margins, because every Shs 50 saved per litre is worth about Shs 146 billion a year. “On balance, it is a good thing, with the biggest benefit being stability rather than price. When supply comes from far away, any shock at sea or in the Gulf shows up quickly in our pump prices, then in transport fares, and ultimately in food prices, leading to inflation. “A large refinery improves energy security; Uganda should therefore treat Dangote as an opportunity rather than a threat.” kidambamark3@gmail.comThe post Dangote’s East Africa IPO: Opportunity or threat to Uganda? appeared first on The Observer Media Ltd.