Africa: Dangote Fertiliser's Plant Expansion to Curb Africa's 6m Tonnes Annual Import

Dangote group is set to expand its $2.5 billion fertiliser plant located in Lagos, which will make Africa self-sufficient in fertiliser supplies and significantly reduce import costs.

Aliko Dangote said on Friday that the planned production capacity would boost supply needs of the continent in the next 40 months.

If the plan is successfully completed Africa will end or curtail current imports over 6 million metric tons of fertiliser annually as it struggles to produce enough food in often challenging growing conditions.

The benefits of increasing domestic production would include reduced foreign exchange expenditure, which has been a major economic burden in Nigeria because of the weakness of the local currency.

"In the next 40 months, Africa will not import fertiliser from anywhere. We have a very aggressive trajectory right now. We want Dangote to be the highest producer of urea, bigger and higher than Qatar - give me 40 months," Dangote said at the annual Afreximbank meeting in Abuja.

Dangote runs Africa's largest granulated urea complex, which has an annual capacity of 3 million tons, 37 per cent of which it exports to the United States. It will need to double current output to achieve his ambition. Dangote has said he is not worried about the impact of Trump tariffs.

Analysts say the market outlook for fertiliser is bullish, but there are also challenges and the kind of expansion Dangote seeks requires infrastructure to be built.

"Any new fertiliser plant or expansion project faces cost overrun risks to the producer," Seth Goldstein, senior equity analyst at Morningstar Research, said.

Mikolah Judson, an analyst at global risk consultancy, Control Risk, cited the need for "transport infrastructure and port capacity," saying "bottlenecks routinely delay various import and export projects in Nigeria".

Dangote has a track record for delivering big projects. He also owns the Dangote Petroleum Refinery, Africa's largest, although its launch was repeatedly delayed and it exceeded its initial budget.

He has said he intends to list the 650,000 barrels-per-day refinery next year and on Friday he also confirmed plans to list his fertiliser plant on the local stock exchange this year.

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