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Africa’s richest man, Aliko Dangote, said he would double the production capacity of his cement operations in Ethiopia with a new $400 million investment.
The Nigerian entrepreneur said Dangote Cement will be able to produce 5 millions tons annually within two-and-a-half years using this new injection of funding, which will create more than 25,000 additional jobs.
“Ethiopia is one of the most promising investments we have outside of Nigeria,” he told reporters, speaking on the sidelines of the African Union summit in Addis Ababa on Saturday. He also said his company had been able to take advantage of recent reforms that have helped him repatriate all his dividends out of Ethiopia.
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Dangote Group has faced several obstacles since setting up operations in Ethiopia’s largest region of Oromia in 2015. Its cement factory has repeatedly been forced to suspend work due to protests from local residents over land use, and gunmen killed three workers — including the company’s country manager — in 2018.
These tensions contributed to longstanding rumors that the company was considering leaving Ethiopia, part of an exodus of foreign investors that have scaled back operations or left Africa’s second-most populous country.
Step Back
The Ethiopian government has rolled out a series of policy changes over the last year to lure foreign capital to the country. The changes include relaxing land ownership laws, floating its local currency, and opening some state-owned enterprises to foreign investment in areas such as banking and telecommunications.
Brook Taye, CEO of the state-owned Ethiopian Investment Holdings, the government’s investment arm, welcomed Dangote’s announcement as a testament to the recent reforms that have taken place in Ethiopia, saying it marked a turning point for the magnate in the country.
“The fact we corrected some of the macro reforms, the binding constraints in terms of investment and creating a business environment is the reason why we have such investment in the country,” he told Semafor.
Samson Berhane, an Addis Ababa-based economic analyst, said Dangote’s investment was the outcome of growing investor confidence within Ethiopia. “Investing in Ethiopia is becoming more attractive,” he said.
Notable
- The head of Dangote Oil refinery last week said the facility, Africa’s largest refinery, was operating at 85% and could move to full capacity in March.
- Dangote earlier this month said his conglomerate had invested $700 million in sugar production in Nigeria in a bid to end its importation into the country.