Ethiopia and Dangote Group Sign $2.5 Billion Agreement to Build Fertilizer Plant
Ethiopia has taken another decisive step in its drive toward economic transformation. The Government of Ethiopia, through Ethiopian Investment Holdings (EIH), has signed a landmark $2.5 billion agreement with Nigeria’s Dangote Group to develop a world-class fertilizer production plant in Gode, Somali Regional State.
The facility will have the capacity to produce 3 million metric tons of urea fertilizer annually, positioning Ethiopia as one of Africa’s largest producers. Ownership of the plant will be shared between Dangote Group (60% equity) and EIH (40% equity), reflecting a strategic public-private partnership aimed at strengthening food security and industrial self-reliance.
Why This Matters for Ethiopia
Agriculture accounts for more than one-third of Ethiopia’s GDP and employs nearly 70% of its workforce. Yet the sector has long been constrained by fertilizer shortages and costly imports, leaving farmers vulnerable to global supply shocks.
By leveraging domestic natural gas reserves from the Hilal and Calub fields, transported through new pipelines to the plant in Gode, Ethiopia will significantly reduce its dependency on imports. This shift is expected to:
- Lower fertilizer costs for Ethiopian farmers.
- Increase crop productivity and food security.
- Create thousands of jobs in construction, manufacturing, and logistics.
- Boost foreign exchange savings by cutting import bills.
A Vote of Confidence in Ethiopia’s Reform Agenda
This agreement is not just about fertilizer ,it’s a powerful signal of investor confidence in Ethiopia’s Homegrown Economic Reform Agenda. By aligning with one of Africa’s most influential conglomerates, the country is reinforcing its vision of becoming a regional hub for agro-industrial development.
Prime Minister Abiy Ahmed emphasized that the project represents Africa “taking charge of its own growth story.” For Dangote Group, it adds to an expanding Ethiopian presence, building on its cement operations and marking a deeper commitment to the country’s industrialization.
Regional and Continental Impact
Beyond Ethiopia, the plant has the potential to supply fertilizer to neighboring markets, strengthening regional trade ties under the African Continental Free Trade Area (AfCFTA). With production capacity of 3 million tons, Ethiopia could emerge as a net exporter, reshaping fertilizer access across the Horn of Africa.
Looking Ahead
Construction is expected to take around 40 months, after which Ethiopia could stand among the world’s most significant fertilizer producers. This development underscores how strategic partnerships and resource-driven industrialization can unlock economic resilience for Africa.
At ABOL INVESTMENT WATCH, we continue to monitor and analyze such transformative investments. Deals like this are more than contracts ,they are milestones shaping Ethiopia’s long-term growth story.
