Dangote Group Secures $2.5 Billion Agreement for Fertilizer Plant in Ethiopia

Dangote Group, Africa’s largest conglomerate led by Nigerian billionaire Aliko Dangote, has signed a landmark $2.5 billion deal with the Ethiopian government to construct a state-of-the-art fertilizer plant in the East African nation. The agreement, which represents one of the largest single private investments in Ethiopia’s history, underscores Dangote’s strategic vision of expanding beyond cement into other critical sectors that support Africa’s agricultural and industrial development.

The project, expected to significantly boost Ethiopia’s agricultural productivity, will involve the establishment of a fertilizer manufacturing complex with the capacity to produce millions of tonnes of fertilizer annually. Ethiopia, a country with an agrarian-based economy where agriculture contributes over a third of GDP and employs more than 70 percent of the population, has long struggled with low fertilizer usage compared to global averages.

This shortfall has been a major impediment to maximizing crop yields and achieving food security. By bringing Dangote’s investment into play, the Ethiopian government believes the new plant will reduce its reliance on fertilizer imports, cut foreign exchange spending, and bolster its drive for agricultural self-sufficiency.

The fertilizer plant will be located near Ethiopia’s abundant natural gas reserves, a critical input for fertilizer production. This ensures that the project will be not only economically viable but also sustainable in the long term, reducing the costs of raw material imports. According to government officials in Addis Ababa, the Ethiopian state will provide key infrastructure support, including road and power connections, to facilitate the smooth execution of the project. The agreement also includes provisions for knowledge transfer and skills training for Ethiopian workers, ensuring the benefits extend beyond production into human capacity development.

Aliko Dangote, Africa’s richest man, has long been vocal about his mission to industrialize the continent through strategic investments in sectors such as cement, sugar, salt, oil refining, and now fertilizers. Speaking at the signing ceremony in Addis Ababa, Dangote emphasized that Africa must prioritize agriculture if it is to feed its rapidly growing population and reduce dependence on food imports. He noted that Ethiopia’s vast arable land, favorable climate, and government commitment to agricultural modernization make it an ideal location for such a transformative investment.

This development comes at a time when Africa faces mounting food security challenges, exacerbated by climate change, supply chain disruptions, and currency pressures. Fertilizer availability and affordability have been major concerns across the continent, with many countries relying heavily on imports from regions like the Middle East and Eastern Europe. The conflict in Ukraine, for instance, disrupted global fertilizer supply chains and sent prices skyrocketing, highlighting the vulnerability of African farmers who depend on external sources. Dangote’s Ethiopia project aims to mitigate such risks by creating a local production hub that could eventually supply not only Ethiopia but also neighboring countries in the Horn of Africa and beyond.

For Ethiopia, this investment marks a milestone in its efforts to attract foreign direct investment (FDI) into key sectors of its economy. Despite facing internal challenges such as political instability and foreign exchange shortages, Ethiopia has continued to court large-scale investments in energy, agriculture, and manufacturing. The Dangote deal is expected to inject much-needed capital into the economy, create thousands of direct and indirect jobs, and enhance Ethiopia’s standing as a regional hub for industrial development.

Industry experts have praised the deal as a win-win for both parties. For Dangote Group, it represents a diversification of its portfolio and consolidation of its presence in Ethiopia, where it already operates a major cement plant. For Ethiopia, it secures a long-term partner with a proven track record of executing large-scale industrial projects in Africa. Moreover, the fertilizer plant’s output is expected to support the government’s Growth and Transformation Plan, which prioritizes agricultural modernization as a pathway to economic transformation.

Beyond economics, the deal has political significance. Ethiopia’s government has faced criticism for struggling to stabilize the economy amid high inflation and foreign exchange shortages. By attracting a multibillion-dollar investment from Dangote, it sends a signal to the international community and investors that the country remains open for business and is committed to large-scale economic reforms. Diplomatically, it also strengthens Nigeria–Ethiopia relations, showcasing how intra-African investment can drive continental growth.

Dangote’s fertilizer venture in Ethiopia builds on his recent success in Nigeria, where the Dangote Fertilizer Plant, located in Lekki, Lagos State, has already begun reshaping the fertilizer market. With an annual production capacity of 3 million tonnes of urea, the Nigerian facility is the largest in Africa and one of the biggest in the world. It has not only reduced Nigeria’s reliance on imports but also positioned the country as a net exporter of fertilizer to other African nations. Replicating such a model in Ethiopia could have equally transformative effects.

The Ethiopian fertilizer plant, once completed, is projected to produce multiple types of fertilizer, including urea and diammonium phosphate (DAP), both of which are critical for boosting soil fertility and crop yields. Analysts expect that widespread access to affordable fertilizer will result in increased maize, wheat, and teff production, strengthening Ethiopia’s food security while creating surplus for export.

In the long run, Dangote’s move into Ethiopia is being hailed as another bold step toward his broader ambition of driving Africa’s economic independence. By investing in fertilizer production, he is not only diversifying his empire but also addressing one of the most pressing needs of the continent: feeding its people. With Africa’s population projected to double by 2050, such strategic investments will be vital in ensuring that agricultural productivity keeps pace with demand.

For now, the signing of the $2.5 billion agreement is a strong statement of intent, setting the stage for construction to begin soon. Both Dangote Group and the Ethiopian government have expressed optimism that the project will be a game-changer for the country’s agricultural sector and the wider African region. If successfully implemented, it could serve as a model for other African nations seeking to leverage local resources and strategic partnerships to accelerate industrialisation and food security.