Ethiopia and Dangote Group Partner on Mega-Fertilizer Project, Poised to Transform Agriculture and Industrial Landscape
GODE, ETHIOPIA – In a monumental step towards achieving agricultural self-sufficiency and industrial modernization, Ethiopian Investment Holdings (EIH) and Nigeria’s industrial giant, Dangote Group, have signed a landmark shareholders’ agreement to construct and operate a $2.5 billion urea fertilizer production complex. This strategic partnership, located in the resource-rich Gode area of the Somali Regional State, is set to be one of the single largest industrial investments in Ethiopia’s history, with profound implications for the country's economic future.
The joint venture establishes a clear ownership structure, with the Ethiopian government’s strategic investment arm, EIH, holding a 40% equity stake, while Dangote Group, a pan-African powerhouse, will retain a 60% majority ownership. The planned facility is designed to produce three million metric tons of urea annually. This immense capacity would not only rank it among the top five largest urea production complexes globally but also position Ethiopia as a major player in the international fertilizer market.
A Strategic Partnership Fuelled by Domestic Resources
The choice of Gode as the site for this mega-project is a strategic one, directly linked to Ethiopia's vast, untapped natural gas reserves. The new facility will leverage gas from the Calub and Hilala fields in the Ogaden basin, which are among the largest confirmed natural gas reserves in the region. The project includes the construction of a pipeline to transport the gas to the Gode facility, ensuring a secure and cost-effective source of feedstock for decades to come.
As EIH CEO Dr. Brook Taye highlighted, this deal represents a "significant milestone" that will ensure "energy security and cost competitiveness." By utilizing its own domestic resources, Ethiopia aims to insulate itself from the volatility of global energy markets and the high cost of imported fertilizers, which have long been a significant burden on the nation's foreign exchange reserves and a major cost for its farmers.
Solving a Critical Agricultural Crisis
For years, Ethiopia's agriculture sector, which employs over 70% of the population, has faced a structural problem: a persistent and crippling shortage of fertilizer. The country has historically imported more than 90% of its fertilizer needs, relying heavily on foreign suppliers from countries like Morocco and Russia. In recent years, logistical bottlenecks, foreign currency shortages, and global supply chain disruptions exacerbated by geopolitical events—have created severe shortfalls, directly impacting planting seasons, driving up prices, and threatening food security.
The Gode complex is poised to be a game-changer. By producing up to three million metric tons of urea annually, it will not only meet and exceed the country's domestic demand, which stands at around two million metric tons, but it will also position Ethiopia as a regional hub for fertilizer exports. This will not only stabilize domestic food production and improve rural incomes but could also transform Ethiopia from a major importer to a key supplier in East Africa, generating much-needed foreign currency.
A Broader Vision for Industrialization
The partnership with Dangote Group is a testament to Ethiopia's commitment to its ambitious Homegrown Economic Reform II (HGER II) agenda. The program aims to modernize agriculture, liberalize key economic sectors, and attract large-scale foreign direct investment (FDI) into historically underserved regions. The Gode project aligns perfectly with this vision, promising to catalyse industrial development and create thousands of direct and indirect jobs in the Somali Regional State, a region identified for strategic investment.
For the Dangote Group, this project is the latest step in a long-term strategic investment in Ethiopia. The company has successfully operated a cement plant in Mugher since 2015 and has recently announced plans to double its production capacity there. The new fertilizer plant in Gode further cements Dangote's commitment to Ethiopia and its belief in the country's long-term economic prospects.
Aliko Dangote, Chairman of the Dangote Group, described the agreement as a "pivotal moment" and a clear commitment to "industrialize Africa and achieve food security." With construction targeted for completion within 40 months, this venture is a bold declaration of confidence in Ethiopia's future and a powerful symbol of African-led development and economic partnership.
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