Africa’s richest man, Aliko Dangote, has sealed $2.5bn agreement with the Ethiopian government to build a fertilizer plant that could reshape the country’s agriculture-driven economy.
Under the agreement signed in Addis Ababa on Thursday, Dangote will own 60per cent of the facility, while the remaining 40per cent will be held by the state-owned Ethiopian Investment Holdings (EIH). The project will be located in Ethiopia’s eastern Somali region.
Prime Minister Abiy Ahmed described the deal as a landmark for Ethiopia’s food security ambitions. “This project will create jobs locally, ensure a reliable fertilizer supply for our farmers who have long faced challenges, and mark a decisive step in our path to food sovereignty,” he said in a statement.
Agriculture accounts for more than one-third of Ethiopia’s GDP, according to World Bank data, yet the country spends about $1 billion annually importing fertilizers.
The new plant, which will take about 40 months to complete, is expected to produce 3 million tons of fertilizer annually and will be linked by pipeline to the Calub and Hilala natural gas fields in the southeast.
EIH noted that the project will significantly cut Ethiopia’s dependence on fertilizer imports, providing a reliable local supply and reducing foreign exchange pressures.
For Dangote, the deal strengthens his pan-African expansion strategy. He already operates cement businesses in 10 African countries and runs a 3 million-ton fertilizer hub in Nigeria that began operations three years ago.
“This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialize Africa and achieve food security across the continent,” Dangote said.
Dangote has been active in Ethiopia for over a decade, starting with a cement plant investment. Earlier this year, Dangote announced a $400 million plan to push a second production line at the Mugher cement plant in Ethiopia, a move expected to double the facility’s annual output to 5 million tons.
The Mugher plant, which began operations in 2015 with an initial capacity of 2.5 million tons per year, has faced major challenges.
Despite some initial setbacks, Dangote Cement, which operates in 10 African countries, remains committed to expanding its footprint in Ethiopia.
The Mugher plant is a key part of the company’s strategy to increase its annual cement production capacity across the continent to 55 million tons.
In 2015, the Dangote Group invested $19 million to add a bagging plant at the Mugher facility, enabling it to produce 120 million bags of cement annually.
Related