Dangote visit to Ruto's inauguration stirs speculation of cement, fertiliser investment
The presence of Nigerian tycoon and Africa’s richest man Aliko Dangote at the inauguration ceremony of President William Ruto has sent strong signals that he could soon expand his business empire into Kenya.
Coincidentally, Mr Dangote deals in cement and fertiliser, products that feature heavily in President Ruto’s economic blueprint on scaling up affordable housing and providing affordable fertiliser to farmers across the country.
Mr Dangote had previously tried to invest in Kenya but in 2017 pushed back plans to set up his Dangote Cement plant in the country to 2021.
The company, which already has a license to prospect for limestone in Kitui County, was planning to set up two cement factories, one in Nairobi and another in Mombasa.
Dangote Cement had tipped its plants in Kenya to each produce 1.5 million tonnes of cement annually, making it Kenya’s second-largest cement manufacturer.
Bamburi Cement, currently the local market leader, produces about 3.2 million tonnes annually.
“Kenya is high on our priorities and we plan to build two plants of 1.5 million tonnes per annum each, near Nairobi and Mombasa, to serve the local market. We hope to be operational in Kenya by 2020/21,” the company said at the time.
EA presence
Mr Dangote already has cement factories in Ethiopia and Tanzania. The 2.5 million tonnes a year plant in Ethiopia was commissioned in May 2015 and is the largest in the country.
In Tanzania, he has a three million tonnes a year cement factory in Mtwara commissioned in December 2015.
The Nigerian tycoon also has a cement factory in Zambia with a capacity of 1.5million tonnes per year, Cameroon (1.5 million) and Congo Brazaville (1.5 million).
Kenya’s cement consumption has been rapidly growing owing to a fast-growing construction sector driven by major state-funded roads and other infrastructure projects as well as a private sector-led housing boom.
Cement consumption hit nine million tonnes last year up from 5.8 million tonnes in 2017, according to the Economic Survey 2022.
Mr Dangote’s presence signalled he could be planning to cash in on the housing boom promised by President Ruto.
The Head of State, in his manifesto, has promised to ensure the construction of 250,000 affordable housing units by rolling out affordable long-term financing schemes.
The effect, he said, would see mortgage payments of Sh10,000 and below down from about Sh30,000 to Sh1 million.
The tycoon could also be looking for a market for his fertiliser business at a time his host, President Ruto, has put priority on lowering the cost of the key farming input to enhance local food production.
“For the short rains, we have already made arrangements to make available 1.4 million bags of fertiliser at Sh3,500 for a 50kg bag down from the current Sh6,500,” the President said on Tuesday.
Mr Dangote in March this year launched a mega $2.5 billion (Sh300 billion) fertiliser plant – the largest in Africa – in Lagos.
Kenya imports the bulk of its fertiliser from countries such as Russia and Ukraine with several local firms engaging in the blending of the commodity.
State-owned KenGen recently revealed plans to set up a fertiliser plant at a time an acute shortage of vital farm input is threatening to lead to widespread food shortages. BY DAILY NATION
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