A KSh324.8bn Fuel Bet: Dangote Builds a Southern African Supply NetworkA KSh324.8bn Fuel Bet: Dangote Builds a Southern African Supply Network

Dangote launched the project at Walvis Bay on 4 November, with Namibian President Netumbo Nandi-Ndaitwah attending the ceremony. According to Reuters the proposed tank farm will have storage capacity of about 600 million litres, equivalent to roughly four million barrels.

The facility is expected to take 18 to 20 months to complete. Its planned capacity is about eight times that of Namibia's existing national oil storage facility.

The project is not yet an operating fuel hub. Its proposed pipeline network, which could extend about 1,700 kilometres, is also a plan rather than completed infrastructure.

A new route into landlocked markets

The proposed pipeline could connect Walvis Bay with Botswana, Zimbabwe and Zambia, with a possible extension into the Democratic Republic of Congo. The aim is to make the Namibian port a distribution point for fuel moving into neighbouring markets.

Landlocked countries often depend on fuel arriving through ports in neighbouring states, then travelling long distances by road or rail. A large storage facility linked to a pipeline could give importers another route and reduce reliance on existing corridors.

At the launch, Dangote said the project could strengthen energy security in six African countries. Reuters quoted an Oxford Economics Africa economist who said the network could give Dangote more markets for refined fuel exports as demand patterns change in Europe and East Asia.

The commercial case will depend on more than storage capacity. Pipeline routes need approvals, funding and agreements with the countries they cross. The project will also need customers willing to commit to using the new system.

How it fits into Dangote's wider energy strategy

Dangote already operates a 700,000-barrel-a-day refinery in Nigeria and has announced plans for another refinery of similar capacity in Kenya. The Namibia project adds a different part of the supply chain: storing fuel and moving it across borders.

That combination could give the group more control over how its refined products reach customers. Refining creates the fuel; storage allows it to be held closer to buyers; pipelines can move large volumes overland.

But the projects are at different stages. The Nigerian refinery is operating, while the proposed Kenyan refinery and Namibia pipeline plans should not be presented as completed assets. Mwenendo has previously examined Dangote's proposed 500MW power offer from the planned Lamu refinery and his stake in Kenya Pipeline.

The KSh324.8 billion figure is the announced project value. The available launch reports do not provide a detailed financing breakdown, a full ownership structure for every project component or binding customer commitments. Those details will be central to assessing the investment's commercial risk.

The test is execution

Namibia stands to gain a larger fuel storage facility and the possibility of becoming a regional distribution point. Neighbouring countries could benefit from an additional supply route if the pipeline is built and its costs are competitive.

There are also questions about competition with existing ports, depots and transport corridors. A pipeline is expensive to build and only makes commercial sense if enough fuel moves through it over time.

The next milestones to watch are financing, environmental and construction approvals, the final pipeline route, agreements with transit countries and the start of work at Walvis Bay.

For Dangote, the project is another attempt to build a connected African energy business. Its eventual value will depend not on the size of the launch announcement, but on whether the storage tanks and cross-border links are completed and used at scale.