Authorities in the Dark Over Dangote’s Threat to Cease Ethiopian Operation

Dangote announced that it might shut operations being disappointed with orders from regional authorities

Authorities in the federal government and the Oromia Regional State were in the dark late last week following the Nigerian investor Aliko Dangote’s threat of closure of its cement plant in Ethiopia over a disappointment on who should run a quarry.

Dangote announced that it might shut its operations in Ethiopia if authorities of Oromia Regional State do not drop the order to cement factories which forces them to hand over control of some parts of their businesses to local young people, citing creating job opportunities for the youth.

Following the recent popular unrest in Oromia Regional State, the region has been searching for ways to reduce youth unemployment and recently ordered companies in the state to hand over quarries to the youth.

The Company raised the issue months ago when Oromia Regional State ordered them outsource their pumice, sand and clay mines to youth groups or be responsible for “any problems”.

Edwin Devakumar, Dangote’s executive director, told Bloomberg that any mismanagement of mining infrastructure including buildings and excavators could lead to total breakdown of the Company’s business.

But Ahmed Abtew, minister of Industry is unaware of the issue.

“We were neither informed via letter nor verbally about their complaint and concerns,” Ahmed told Fortune.

Becoming operational in 2015, Dangote is one of the 20 cement factories in Ethiopia, produce 18 million tonnes of cement annually. Since its commencement, the Company has been playing a significant role in stabilising the cement market and also exporting to neighbouring countries.

Without denying the issue, Deep Kamara, country director of Dangote Industries Ethiopia, refrains from commenting on the issue.

“I am not authorised to make any comment on the issue, rather it is the owner of the company, Aliko Dangote, who is able to opine on the issue,” said Kamara.

This announcement of the Company came two weeks after the United Nations Conference on Trade & Development (UNCTAD) put the country at the top of the list of African countries which attract the most Foreign Direct Investment (FDI), amounting to 3.2 billion dollars in 2016.

Dangote Cement has a production capacity of manufacturing 2.5 million tonnes a year. It is located in Mugher in Adebern Wereda, Oromia Regional State, and hires 1,000 employees.

According to Deputy Head of Oromia Water, Mines & Energy Bureau, Jarso Edema, the management of the Company has made no communication with the Bureau about the case although they are willing and ready to discuss it with them.

“As far as I know the issue they raised regarding quarries was settled months back and they are operating peacefully,” said Ahmed.

But Negeri Lencho (PhD), head of the government communications affairs office, claims all the talks are groundless, and the government is working with the management of the Company to resolve the issue.

It is the responsibility of the regional states to create job opportunity for the youths in the area as Oromia is one of the regions with high youth unemployment, according to Negeri.

“Beyond becoming a source of income for the youth, it will also make them have a sense of ownership in the company,” said Negeri. “This is more advantageous for the investments like Dangote.”

Not only government officials, but also distributors of the Company, are not informed about the issue including Roman Befekadu, manager of Adinas, one of Dangote’s distributors.

“I heard nothing about the case, and I cannot comment on the issue,” Roman, who is also an actress and a movie producer, told Fortune.


Published on Jun 26,2017 [ Vol 18 ,No 896]



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