Ethiopia Dangote Group Ink 2.5 Billion Deal For Fertilizer Plant
Ethiopia, Dangote Group Seal $2.5 Billion Deal for Fertilizer Plant in Major Push for Food Security
ADDIS ABABA – In a landmark move for Ethiopia’s agricultural and industrial future, the government has signed a $2.5 billion agreement with Nigeria’s Dangote Group to build a massive fertilizer manufacturing complex. The deal, announced by Prime Minister Abiy Ahmed, is a cornerstone of the nation’s “Green Legacy” initiative, aiming to achieve self-sufficiency in food production and significantly reduce reliance on foreign imports.
The new facility will be a joint venture, with Dangote Group holding a 60% equity stake and the state-owned Ethiopian Investment Holdings (EIH) retaining the remaining 40%. With a projected annual production capacity of 3 million metric tonnes, the plant is set to become one of the five largest urea production complexes in the world.
The project is strategically located in Gode, within the Somali Regional State. This location was chosen for its proximity to the Calub and Hilala natural gas fields, which will serve as the primary raw material for the plant’s production. A new pipeline will be built to transport the gas, a critical infrastructure component of the project.
Project Timeline and Economic Impact
The agreement specifies a targeted completion within 40 months, signaling a clear and ambitious timeline for the mega-project. Upon completion, the plant is expected to have a transformative impact on Ethiopia’s economy:
- Job Creation: The project is anticipated to create thousands of direct and indirect jobs, stimulating economic activity in a historically underdeveloped region and empowering local communities.
- Reduced Import Dependency: The facility will address Ethiopia’s current annual urea import requirement of 765,000 metric tonnes, helping the country save a significant portion of the $1 billion it spends annually on fertilizer imports.
- Regional Hub: The plant’s output will not only meet domestic demand but also position Ethiopia as a key regional supplier, with plans to serve markets in neighboring countries like Kenya, Somalia, and Djibouti.
Commitment to African Development
The deal is a testament to the deepening investment ties between Africa’s two most populous nations. Speaking on the partnership, Aliko Dangote, Chairman of the Dangote Group, described the agreement as a “pivotal moment in our shared vision to industrialise Africa and achieve food security across the continent.”
This initiative is a direct response to the global volatility in fertilizer markets, which have seen price surges and supply chain disruptions. By leveraging its own natural gas reserves, Ethiopia aims to stabilize its supply chain and provide a reliable, affordable source of fertilizer for its farmers, who have previously struggled with limited access.
Prime Minister Abiy Ahmed underscored the project’s importance for the nation’s food sovereignty and agricultural transformation, highlighting its alignment with the country’s broader economic reform agenda.
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