Aliko Dangote, Africa’s richest man and the mastermind behind the continent’s largest cement empire, is making another massive investment in Ethiopia. The Nigerian billionaire has announced a $400 million plan to revive a second production line at the Mugher cement plant, further cementing his industrial footprint in East Africa.
The expansion, expected to double the plant’s capacity, underscores Dangote’s unwavering commitment to Ethiopia’s industrial growth despite past setbacks, including violent unrest that led to tragic losses for the company.
The Mugher cement plant, located about 90 kilometers west of Addis Ababa, is one of Dangote Cement’s key operations in Africa. The company, which currently operates in 10 African countries, initially set up the Mugher plant in 2015 with a 2.5 million tons per annum (Mt/yr) capacity. That same year, Dangote invested $19 million in a bagging plant, capable of producing 120 million bags annually to support its cement operations.
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However, Ethiopia’s turbulent political landscape has presented significant obstacles. In 2018, violent protests erupted in the region, leading to vandalism of Dangote Cement’s vehicles and machinery. Tragically, the unrest escalated into the assassination of the company’s Ethiopian country manager and two staff members.
These incidents raised concerns about the security of foreign investments in Ethiopia and prompted Dangote Cement to reassess its operations in the country.
Yet, despite these challenges, Dangote has chosen to double down on Ethiopia, reinforcing his long-term vision for Africa’s industrialization.
The $400 Million Expansion Plan
The new investment will see the capacity of the Mugher cement plant increase from 2.5 million tons to 5 million tons per annum. This expansion will be driven by the construction of a new greenfield grinding unit near Addis Ababa, strategically positioned to meet growing domestic and regional demand for cement.
Ethiopian officials have welcomed the move with open arms. Dr. Brook Taye, CEO of Ethiopian Investment Holdings, lauded the decision, emphasizing that the expansion aligns with Ethiopia’s broader economic agenda.
“Ethiopia is undergoing a significant economic transformation that prioritizes industrialization, investment, and job creation. This investment is a strong signal of confidence in Ethiopia’s business environment and will significantly contribute to our infrastructure and economic growth,” Taye said.
Beyond Cement, Dangote’s Growing Ethiopian Ambitions
Dangote’s Ethiopian ambitions extend beyond cement. The billionaire is also expanding into Ethiopia’s sugar industry, leveraging his experience in Nigeria’s sugar production. The group is enhancing operations at the Omo Kuraz Sugar Company, a major player in Ethiopia’s sugar sector.
Additionally, Dangote is eyeing the establishment of a urea production plant, which could significantly support Ethiopia’s agricultural sector. However, the execution of this plan hinges on Ethiopia’s progress in natural gas development, a resource critical for urea production. If realized, this move would not only boost Ethiopia’s fertilizer supply but also reduce reliance on costly imports.
Despite past security concerns, Dangote remains optimistic about Ethiopia’s investment climate. Speaking at the investment announcement, he declared Ethiopia as his “best investment destination” in Africa, underscoring his confidence in the country’s economic reforms.
Beyond Ethiopia, Dangote continues to champion pan-African economic integration. Asserting the role of African business leaders in the continent’s economic transformation, he stated:
“Africa will be developed by Africans. As our political leaders work to strengthen the African Union, we as business leaders must complement their efforts by deepening commercial linkages across the continent.”
Can Ethiopia Deliver on Its Promise?
Dangote’s expansion comes at a crucial time for Ethiopia, as the country seeks to rebuild investor confidence following years of political and economic instability. The Ethiopian government has undertaken market reforms, including privatizing state-owned enterprises and liberalizing key industries, in a bid to attract foreign direct investment (FDI).
However, Ethiopia’s fragile security situation remains a concern. The government will need to guarantee the safety of foreign investments and ensure that the regulatory environment remains stable and transparent. Any renewed unrest or policy unpredictability could derail Dangote’s expansion plans and discourage other investors from betting on Ethiopia’s economy.
Analysts believe that Dangote’s latest move in Ethiopia reflects his trademark risk-taking approach. While the $400 million investment promises to boost Ethiopia’s cement production, create jobs, and stimulate economic growth, it must first overcome the significant risks, which include political instability and regulatory uncertainty.
Yet, if successful, the expansion could solidify Dangote Cement’s dominance in East Africa, reinforcing the company’s standing as Africa’s premier cement producer. More importantly, it could serve as a model for African-led industrialization, demonstrating that despite political hurdles, Africa’s billionaires can drive transformative economic change on the continent.