The Ethiopian government and Nigerian multinational conglomerate Dangote Group have signed a landmark agreement for the construction of a $2.5 billion fertiliser manufacturing plant, as Prime Minister Abiy Ahmed’s administration moves to reduce over-dependence on imports and boost local production.

Ethiopian Investment Holdings (EIH), the government’s strategic investment arm, and Dangote Group signed the agreement to develop a world-class urea fertiliser complex in Gode, Ethiopia. The facility will produce up to three million tonnes annually, placing it among the largest globally.“Set for completion within 40 months, the project will create thousands of jobs, cut Ethiopia’s reliance on fertiliser imports, and boost food security while positioning the country as a regional hub for fertiliser production,” the Prime Minister’s office said in a statement on Thursday following the signing.

The deal was first announced on July 3.

Gode, located in the Shabelle Zone of the Somali Region in south-eastern Ethiopia, formerly served as the regional capital until 1995.

Ethiopia is Africa’s leading fertiliser importer, but the government is determined to reverse this trend as demand continues to rise. The country’s fertiliser market is the second-largest in sub-Saharan Africa, with consumption of about two million tonnes annually, according to a case study by the International Fertiliser Development Center (IFDC).

Ethiopia has about 80 million farmers, representing 67 percent of the population, and has the potential to become a regional food basket. Fertiliser procurement is largely controlled by the government through centrally managed annual international tenders.

The proposed Gode plant is expected to produce urea and nitrogen-based fertilisers for both domestic use and export.

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