Suluhu questions Ruto over plans to construct oil refinery in Tanga

President William Ruto has defended his recent announcement that Kenya and Uganda planned to build a crude oil refinery in Tanzania after being taken to task by President Samia Suluhu.  

President Suluhu, who hosted Ruto for a two-day state visit, had on Monday appeared to reprimand the Kenyan President, who, alongside his Ugandan counterpart, had in April announced plans to build a refinery in Tanga. 

The refinery would process oil from Uganda’s oil fields in Hoima, Kenya’s Lokichar basin as well as other oil producers in the region.

It was seen as complementing the Tanzania-Uganda crude oil pipeline that starts in Western Uganda where the country is readying to start oil production later this and terminates at the port town of Tanga.  

The plan had received backing from Nigeria’s business magnate Aliko Dangote, who committed to replicate the refinery he built in his home country but also said such a move would need the backing by all the regional presidents. 

While she did not explicitly say she was against the project, President Suluhu protested at being kept in the dark, saying she was not aware, but also urged Ruto to "explain himself as to why he made that announcement”.  

The President explained himself during the Kenya-Tanzania Business Forum at the Julius Nyerere International Convention Centre in Dar es Salaam on Monday, where business leaders from the two countries pledged to continue making cross border investments. 

In defending what now seems to have been a roadside declaration, Ruto said the project would create opportunities for the region, enabling it to make use of its oil resources to industrialise.  

“The building of a refinery is a big opportunity for business, for industrialisation, for petrochemical, fertiliser, plastics industries.

"When I had a discussion with President (Yoweri) Museveni it was about how to industrialise our region using our resources. Our oil,mineral or agricultural resources should be used to industrialize our region,” he said. 

“It is my belief and that of the leaders in our region that whatever raw materials we have should be used for the industrialisation of the region so that we can create wealth, jobs and expand opportunities here. The people of Tanzania should be happy that we are discussing building a refinery in Tanga.” 

Uganda is also pressing ahead with a smaller refinery that will be located at Hoima, which President Museveni had said would serve Uganda as well as parts of Tanzania and Kenya that are currently exposed to high fuel costs due to the logistics of moving petroleum products over land from either Mombasa or Dar es Salaam.

Museveni, however, noted that Uganda backed the Tanga refinery and that it would still receive huge amounts of crude oil produced in Uganda. 

“It is an investment that the governments of Kenya and Uganda are willing to invest in. You have heard that Paul Kagame, I am told, said yesterday they are willing to invest.. I hope Tanzania is willing to invest,” Ruto said of the planned refinery, again dropping the Rwanda President’s name, who was not in the room. 

Kenya and Tanzania have had complex relations in the past in that while they were, alongside Uganda, the founding members of EAC, they have over the years been hostile towards each other.

They have at times issued reciprocating bans on products from either side of the border which has suppressed trade in both goods and services through the years. 

A statement by Kenya’s government issued following the forum said businesses from the two countries had set sight on Sh130 billion in new trade and Sh65 billion in fresh cross-border investments over the next three years. 

President Ruto appeared to acknowledge the past hostilities, noting that the ambitious targets set at the Monday forum would only be attained by bringing down non-tariff barriers that have persistently impeded trade and investment between the two nations.  

“Our governments will establish a joint technical mechanism to eliminate all outstanding barriers, publish a time-bound resolution plan, and implement a continuous monitoring system to ensure new barriers are addressed swiftly and conclusively,” the President told more than 300 business leaders at the forum.  

President Samia Suluhu Hassan too acknowledged the tensions but committed that Tanzania would undertake far-reaching reforms to boost trade ties with Kenya.  

“The challenges between us can be easily resolved when there is the requisite goodwill from both sides,” she said, noting that cordial relations provide a firm foundation to advance mutual interests beneficial to the people of both countries. 

Earlier Kenya and Tanzania had signed eight key agreements at State House Dar es Salaam. 

Bilateral trade between Kenya and Tanzania stood at $860.3 million (Sh111.13 billion) in 2025, a slight reduction from $950 million (Sh122.72 billion) in 2024 but with near-balanced flows on both sides. 

Kenyan investments in Tanzania now exceed $1.7 billion (Sh219.61 billion) across financial services, manufacturing, telecommunications, and retail, while also positioning Kenya as a dependable source of industrial inputs for Tanzania.

Tanzanian investments in Kenya are now over $336 million (Sh43.41 billion), rising in tourism, manufacturing, energy, and agriculture.  

At the forum, President Ruto announced institutional reforms to stimulate growth and expansion. Beyond the Joint Business Council as the central platform for structured collaboration, Ruto said, the Tanzania-Kenya Business Forum will be institutionalised as an annual event to review progress, track implementation, and unlock new opportunities. 

Kenya will host the next Tanzania-Kenya Business Forum in Nairobi in 2027.