More than 130 residents of Lamu County have moved to court seeking to halt the planned construction of Nigerian billionaire Aliko Dangote’s Sh2.2 trillion oil refinery, days before the government and Dangote Industries are scheduled to break ground on the project.
The 133 residents from Chandavai and surrounding areas have asked the Environment and Land Court in Malindi to intervene, arguing that construction and preparatory works are taking place on land they have occupied and cultivated for generations without adequate notice, recognition of their land interests or compensation.
The legal challenge comes just two days before the planned September 30 groundbreaking ceremony for the proposed refinery, adding a significant new complication to a project the government has presented as a major industrial investment for Kenya and the wider East African region.
Residents challenge land acquisition
The residents, led by Salim Tima Swaleh and 132 others, have sued several government institutions, including the Office of the President, the Ministry of Defence, the State Department for Lands and Physical Planning, the Attorney General, the National Land Commission and the LAPSSET Corridor Development Authority.
Dangote Industries and two contractors have also been named as respondents, alongside the Lamu County Government.
The plaintiffs claim they have occupied, cultivated and developed identifiable portions of land forming part of LR No. 13061 in Chandavai for generations.
They allege that preparatory activities for the refinery have already resulted in the destruction of crops, trees, structures and other property.
According to the court documents reported by Citizen Digital, the residents are concerned that continued construction and excavation could permanently change the character of the disputed land and make it more difficult for the court to resolve the ownership and compensation questions.
The residents are asking the court to stop further activity pending determination of their claims.
Dispute over who should receive compensation
At the centre of the dispute is the question of who legally owns or has a compensable interest in the land earmarked for the project.
The residents allege that they are the genuine occupants and beneficiaries of the land but fear that compensation could instead be paid to people they describe as absentee owners or holders of titles they believe were obtained irregularly.
They argue that the absence of registered title deeds should not automatically eliminate the interests of communities that have historically occupied and used the land.
The plaintiffs are relying, among other provisions, on Article 40(4) of the Constitution, which provides for compensation to persons whose rights or interests in property are affected by compulsory acquisition, as well as provisions of the Land Act governing compulsory acquisition.
One of the plaintiffs, Tima Swaleh, told the court that the acquisition of land without prior notice or compensation amounted to a violation of their constitutional rights.
The residents are also challenging what they say is the destruction of commercial crops before proper valuation.
Groundbreaking ceremony still planned
The court case comes as preparations for the refinery’s groundbreaking are already under way.
The government has announced September 30, 2026 as the date for the ceremony. Kenya News Agency reported that officials in Lamu were preparing for a major event expected to attract senior government officials and international guests.
The proposed refinery is expected to have a processing capacity of 700,000 barrels of crude oil per day.
At that capacity, it would be the largest refinery in East Africa and would be comparable in scale to Dangote’s flagship refinery in Lagos, Nigeria. The Nigerian facility has a nameplate capacity of 650,000 barrels per day.
Dangote announced the September 30 groundbreaking date earlier this month, with the project estimated at between $15 billion and $16 billion, equivalent to roughly Sh2.2 trillion at prevailing exchange rates.
Government sees refinery as regional industrial hub
The Kenyan government has portrayed the refinery as a major investment that could transform Lamu into an important petroleum-processing and industrial centre.
The proposed plant is expected to supply refined petroleum products to Kenya and neighbouring countries, potentially reducing East Africa’s dependence on imported petroleum products.
Kenyan officials have also linked the refinery to the broader development of the Lamu Port-South Sudan-Ethiopia Transport corridor, commonly known as LAPSSET.
The refinery would form part of a wider industrial development strategy around Lamu, with government officials projecting substantial employment and investment opportunities.
The Star reported that the government expects the wider development to create more than 60,000 jobs, including skilled employment, although those figures relate to the broader industrial development rather than necessarily to direct refinery employment alone.
For the government, therefore, the project represents not only an energy investment but also a potential catalyst for industrialisation and infrastructure development along the Kenyan coast.
But crude supply remains a major question
Even without the court dispute, the refinery faces significant commercial and logistical challenges.
A major question is where the plant will obtain sufficient crude oil.
Kenya does not currently produce enough commercial crude to supply a 700,000-barrel-per-day refinery. Potential sources could include crude from Kenya, South Sudan and Uganda, but transporting sufficient volumes to Lamu would require substantial infrastructure and regional cooperation.
Reuters reported earlier this month that the project faces challenges over crude supply, financing and infrastructure, including the absence of some key facilities around the Lamu special economic zone.
The proposed Lokichar-Lamu crude oil pipeline could eventually provide a route for Kenyan crude to the coast. President William Ruto has said Kenya is negotiating with Dangote over construction of the pipeline alongside the refinery project.
However, the pipeline’s development has itself been subject to delays and questions over the timing of Kenya’s crude production.
This means the refinery’s ultimate business model could depend significantly on imported crude transported by sea until sufficient regional supplies and infrastructure become available.
Dangote’s funding model
The scale of the proposed investment also makes financing a central issue.
Dangote Industries has indicated that the project would be financed through a combination of internal cash resources, bonds and a planned initial public offering.
Reuters reported in July that Dangote intended to use internal cash, bond financing and an IPO to fund the proposed Kenyan refinery, which would represent the group’s largest refining investment outside Nigeria.
The proposed Lamu facility builds on Dangote’s experience with its Lagos refinery, which began operations in 2024 and has a 650,000-barrel-per-day nameplate capacity.
That Nigerian project itself required more than $20 billion after construction encountered a series of challenges, highlighting the enormous financial and logistical demands involved in building a refinery of this scale.
Environmental and community concerns
Land ownership is not the only issue generating concern in Lamu.
Civil society organisations and community groups have called for greater public participation and scrutiny of the environmental and social consequences of the proposed development.
Muslims for Human Rights (Muhuri), for example, has said it is not opposed to investment in Lamu but wants guarantees concerning residents’ safety, livelihoods, freedom of movement and constitutional rights.
Other community representatives have demanded greater disclosure about the exact project site and called for outstanding land-compensation disputes linked to previous developments in the area to be addressed.
Mohamed Rajab of the Kililana Farmers Association told the Daily Nation that communities wanted public participation and compensation issues dealt with before further development proceeded.
Environmental considerations are also important because Lamu is home to environmentally sensitive coastal ecosystems and the historic Lamu Old Town, a UNESCO World Heritage site.
Reuters has identified environmental concerns and the refinery’s proximity to the historic site among the challenges requiring careful management.
Residents say they support development but want their rights protected
The legal challenge does not necessarily represent blanket opposition to the refinery.
Some residents and community organisations have explicitly said they support investment in Lamu but want the government to resolve land, compensation, environmental and consultation questions before construction proceeds.
Residents of Magogoni and Kwa Sasi, for example, have demanded compensation while saying they support the project in principle. They argue that families who have occupied the affected land should be properly identified and compensated before the development begins.
That distinction is important because the dispute is increasingly about how the project is being implemented, rather than simply whether Lamu should receive major investment.
What happens next?
The immediate question is whether the Environment and Land Court will issue orders capable of affecting the September 30 groundbreaking ceremony.
The residents have asked for intervention before construction and excavation cause further damage to the disputed land. Their case puts the government, the National Land Commission and Dangote Industries under pressure to address the competing claims over land ownership and compensation.
For the government, delaying the project could complicate a development that has already been publicly announced and presented as a major component of Kenya’s future energy and industrial strategy.
For the affected residents, however, the court case is an attempt to ensure that the economic ambitions surrounding the refinery do not override their constitutional and property rights.
The dispute therefore places two competing priorities directly before the court: Kenya’s ambition to attract one of Africa’s largest private industrial investments, and the demand from communities in Lamu that development should proceed only after their land and compensation rights have been addressed.
With the groundbreaking ceremony scheduled for September 30, the court’s intervention could become the first major test of whether the ambitious Lamu refinery project can move forward on the government’s timetable.
