Ethiopia Inks $2.5bn Deal with Dangote for Fertiliser Plant

Ethiopia has signed a $2.5 billion deal with Nigeria’s Dangote Group to build a “world-class” fertiliser plant in the Somali Regional State, aiming to boost food security in the country.

Located in Gode—near Ethiopia’s largely untapped gas reserves, the facility is expected to produce about three million metric tonnes of fertiliser annually.

Observers say the fertiliser plant could play a major role in transforming the country’s food production capacity and reducing its reliance on imports.

Alongside the plant, the deal includes plans for a long-stalled gas pipeline intended to transport natural gas from the Calub and Hilala fields in the country’s east.

However, clarity around the timeline for gas production remains limited, although Prime Minister Abiy Ahmed recently told parliament that gas production was expected to start “soon” and that the fertiliser plant should be up and running within 40 months, pointing to a 2029 opening.

Dangote Group will take a 60% stake in the venture. The conglomerate already operates a cement plant in Ethiopia, which observers say gives the new fertiliser project a stronger chance of reaching completion—unlike previous efforts that failed to materialise.

RELATED: Incredible Details of Aliko Dangote’s $20bn Refinery

The deal also intensifies competition with Morocco’s state-owned OCP Group, which had previously planned a fertiliser plant in Ethiopia but has made limited progress. If successful, the Gode complex could help reposition Dangote as Africa’s leading fertiliser producer.

“This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialize Africa and achieve food security across the continent,” said Nigerian billionaire Aliko Dangote, whose company recently completed a similar fertiliser complex in Nigeria’s Lekki Free Trade Zone.

Ethiopia’s decision to partner with a private African conglomerate, rather than turn to external donors or multinationals, also reflects a shift in strategy towards regional industrial self-reliance.

The location of the plant near natural gas deposits is expected to reduce production costs, although much depends on whether gas extraction infrastructure can be developed in time.

With food insecurity a growing concern across East Africa, the fertiliser project could reshape Ethiopia’s agricultural landscape—if the promises are delivered on schedule.

Join 15,000+ pros getting our weekly digest of news and insights.