As protests disrupted transport systems across Kenya over rising fuel prices, President William Ruto was in Baku, Azerbaijan pursuing long-term productive capital, an attribute rarely prioritized in Africa with the right ambition and urgency. Ruto looked to court officials from SOCAR, a state oil company many Kenyans can hardly locate on a map. The discussion centered around cooperation in oil, gas, renewable energy, and the possible investment on the proposed East African Oil Refinery.

There is nothing inherently wrong with what Ruto is doing, which, admittedly, appears like another diplomatic photo-op. However, beneath the big talk lies a question that is more consequential for Kenya and Africa on whether and when we can finally start financing and industrializing ourselves using own domestic capital and strategic resources. This is particularly a glaring paradox in a continent that is overflowing with natural wealth, world’s youngest and fastest-growing workforce, unexplored arable land, critical minerals, and renewable energy potential. Yet, the question is how we perpetually depend on someone else’s money.

African Economic Outlook 2025

The African Economic outlook report by the African Development Bank for 2025 resoundingly illustrates that Africa is not poor. However, the continent is busy hemorrhaging capital through inefficiency, corruption, illicit financial flows, distorted risk assessments, and weak domestic value addition. It is estimated that the continent losses $90 billion annually through illicit financial flows, $275 billion through distorted risk perceptions and high borrowing costs, $148 billion through corruption, and another $74 billion through multinational profit shifting. The continent collectively bleeds capital estimated at $587 billion every year illustrating the extend of the financing open wound.

Whatever one thinks about billionaire industrialists, Aliko Dangote demonstrated a lesson African government have struggled to internalize.

The stark contract is that the continent possesses enormous untapped domestic financial, natural, human, and business capital waiting to be mobilized. The conversation between Kenya and SOCAR must therefore be understood beyond fuel prices as it is a part of a much larger battle over who captures value from African resources. Africa continues to export raw materials and import finished products at premium prices. Nigeria for instance has been exporting crude oil and importing refined petroleum while Democratic Republic of Congo exports cobalt instead of manufacturing batteries. Ghana exports cocoa while Europe sells chocolate back home while Kenya exports coffee and tea capturing a minute fraction of the global customer value. This model has therefore created dependency, weak currencies, trade deficits, unemployment, and chronic external borrowing.

*Developing a viable confectionery industry is essential for Africa’s cocoa giants. Photo by Lisa from Pexels*

There is a staggering opportunity against this hemorrhage if Africa were to systematically mobilize its domestic resources. This is through better tax administration, fiscal discipline, formalization of the vast informal economy, integration of capital into national accounts, deepening of local financial markets, and capitalization of African development finance institutions. The reforms can help unlock over $469.9 billion in additional annual resources, not as aid or concessional loans but the continents own money working for her people.

This represents a deceptively simple yet philosophically radical approach where global capital gets to follow African Capital. For too long, the continent’s development model has been built on the assumption that investment must be attracted from outside before anything can happen inside. This has resulted in a permanent supplicant posture with presidents in Baku, finance ministers begging in Beijing, and heads of states queuing for bilateral meetings in Davos hoping that someone takes a chance on Africa.

… the truth is that a trip to Baku and a memorandum of understanding for a refinery development cannot be declared as victory.

The Dangote Refinery in Lagos has for instance started to turn this model on its head, with the wealthiest man in Africa having bet $20 billion consisting of largely African-sourced capital on the single largest petroleum refinery in Africa. This gesture matters beyond Nigeria itself representing an African attempt at retaining value chains locally instead of exporting raw materials and importing expensive refined products. Whatever one thinks about billionaire industrialists, Aliko Dangote demonstrated a lesson African government have struggled to internalize. It is now evident that the discussion in who will do it next.

The Answer may well be East Africa

East Africa consumes significant volumes of refined petroleum yet lacks sufficient regional refining infrastructure. East African countries in addition to regional economies remain exposed to volatile international refining markets, shipping disruptions, currency depreciation, and geopolitical shocks. The proposed East African Refinery discussed in Baku could well be an answer to this.

The concept of a regional refinery to serve the landlocked markets of Uganda, Rwanda, South Sudan, and the Democratic Republic of Congo has circulated for years. The economics are compelling. East Africa collectively imports refined petroleum products at enormous cost, surrendering value addition to refineries in the Middle East, India, and Europe. A regional refinery, sited strategically, could transform the bloc into a net exporter of refined products, create tens of thousands of jobs, and dramatically reduce the price volatility that currently makes every fuel price adjustment a political crisis.

However, the truth is that a trip to Baku and a memorandum of understanding for a refinery development cannot be declared as victory. Africa has a long list of projects in history that have never gone beyond MOUs to break ground due to issues in domestic environments. Africa lacks transparent fiscal management, credible regulatory frameworks, and no structured project financing frameworks. SOCAR, in building in East Africa will follow bankable capital, reliable legal structures, and a government that shows it can manage complex public-private partnerships without creating loopholes for elite extraction. A regional refinery would not magically eliminate these pressures, but it could substantially reduce vulnerability while creating strategic industrial capacity.

The Future of African Capital, and Financing

The future of African development cannot rely solely on Eurobonds, IMF programs, Chinese loans, or aid dependency. In addition to fixing tax administration challenges and natural resources must be valued to enhance domestic capital mobilization across Africa. The mobilization of domestic capital also means that pension funds financing infrastructure must be re-examined. It means sovereign wealth funds investing strategically in industrial projects. It means reducing corruption leakages. It means formalizing businesses and expanding productive tax bases instead of overtaxing already compliant citizens. It means improving local capital markets so African savings finance African industries instead of sitting idle or fleeing abroad.

Above all, corruption in Africa must be confronted as an economic emergency. The estimated $275 billion lost annually to corruption in Africa represents hospitals not built, roads not paved, and refineries not financed. A shilling getting lost into the pockets of the politically connected is a shilling that pension funds cannot lend to a refinery project at competitive market interest rates.

The Dangote model, whatever the criticism, represents something important for the continent. This is African private capital taking a long-term bet on African infrastructure which is needed not as isolated individual ambition but as a systematic pattern supported by sound policy. The adequate capitalization of African development and finance institutions to co-invest alongside private actors is also needed for absorbing the first-loss risk that makes projects bankable for commercial lenders. As the presidents’ court partners abroad, this is the architecture that should be built at home.

A financing model that starts with an East African pension capital, East African Development Banks, and East African regulatory credibility is thus needed for regional energy security in the region. This should precede the invitation of SOCAR, SHELL, and other external actors in the energy sector as the domestic incentive structures are more desirable. This model would also be more accountable to local shareholders, taxable in local jurisdictions, and less susceptible to the profit-shifting arrangements that drain $148 billion from the continent every year.

Pursuing Billion-Dollar Ambitions

If Kenya genuinely wants to pursue refinery development or broader industrialization, first, transparency must become non-negotiable. Financing structures, ownership models, procurement systems, and expected public benefits must be publicly scrutinized. Africans are tired of opaque mega-projects whose profits disappear while citizens inherit debt. Secondly, projects must be regionally integrated as refinery would for instance become economically viable if it is treated as a regional strategic asset as opposed to a pure Kenyan political trophy. Regional markets tend to create scale which attracts investment which lowers production costs.

Thirdly, meaningful participation of domestic investors should be a priority including pension funds, insurance firms, banks, and development finance institutions who should not watch from the periphery. Fourth, the continent needs to aggressively tackle distorted risk perceptions. African economies routinely borrow at significantly higher interest rates than many riskier economies elsewhere. The vicious cycle of expensive capital which limits industrialization leading to dependency, increased risks, and higher borrowing costs must be broken.

The fuel strike across Kenya but me viewed as a warning not just about prices but about the political loss of failing to build energy sovereignty creating decades of missed opportunities across the entire Africa. Across the continent, it is evident to all that something is broken in a system where a continent sits on oil and must beg to refine it. While it is true that global capital will follow, Africa must move first.