Dangote, a Nigerian company, wants to stop importing fertilizer to Africa
Nigerian billionaire Aliko Dangote stated on Friday that Africa will have enough fertilizer in 40 months, based on plans to expand his $2.5 billion facility outside of Lagos.
Africa presently imports more than 6 million metric tons of fertilizer each year due to its difficult growing environment and inability to generate enough food.
One advantage of raising domestic production would be a decrease in foreign exchange spending, which has been a significant financial burden for Nigeria due to the local currency’s depreciation.
“Africa will stop importing fertilizer from outside sources throughout the next 40 months. At the moment, we are on a fairly aggressive trajectory. Give me 40 months,” Dangote stated during the annual Afreximbank meeting in Abuja. “We want to position Dangote as the largest and highest producer of urea, bigger and higher than Qatar.”
Dangote operates the largest granulated urea plant in Africa, with a yearly capacity of 3 million tons, of which 37% is exported to the US. In order to fulfill his goal, the existing output will have to double. Dangote has stated that the effects of Trump’s tariffs do not concern him.
Although there are obstacles and infrastructure needs to be created for Dangote’s desired expansion, analysts think the market prognosis for fertilizer is bright.
The producer is at risk of cost overruns with any new fertilizer plant or expansion project, according to Morningstar Research senior equities analyst Seth Goldstein.
“Bottlenecks routinely delay various import and export projects in Nigeria,” according to Mikolah Judson, an analyst with the international risk consultancy Control Risk, who also mentioned the need for “transport infrastructure and port capacity.”
Dangote has demonstrated the ability to complete large-scale initiatives. He also owns the largest refinery in Africa, Dangote Petroleum Refinery, despite the fact that it was overbudget and its opening was postponed several times.
In addition to announcing his intention to list his fertilizer factory on the local stock exchange this year, he also stated his intention to list the refinery, which produces 650,000 barrels per day, next year.
