Ethiopian province in showdown with Nigerian cement operations

DANGOTE Cement, controlled by Africa’s richest man, Aliko Dangote, said it may shut its operations in Ethiopia if authorities in the central state of Oromia don’t reverse an order to cement makers to hand over control of some parts of their businesses to local young people.

Oromia state’s East Shewa Zone administration wants the Nigerian company to outsource its pumice, sand and clay mines to youth groups or be responsible for “any problems” that may arise, according to a letter from the authority to Dangote and verified with a representative of East Shewa’s administration. The regional government sees the transfer of jobs in pumice production as a way to ease youth unemployment and quell unrest, according to the document.

Any mismanagement of mining infrastructure including buildings and excavators could “lead to total breakdown of our business,” Dangote executive director Edwin Devakumar said in Lagos, Nigeria’s commercial hub, last week.

Ask for intervention The cement maker will write to the federal government this week to ask for intervention in the matter and will consider shutting the plant in Mugher, about 90km north of Addis Ababa, as a “last option” if this fails, he said.

There’s “no intention to displace any investment,” so long as Dangote is “working by the laws and regulations in our region and country,” Tekele Uma, head of Oromia’s transport authority, said. “If anyone’s complaining about Oromia regional state, we’re ready to talk with them. Any investment can come. Any investment can go.”

Motuma Mekassa, Ethiopia’s minister of mining, petroleum and natural gas, said that he wasn’t aware of an attempt by Dangote to reach his office. An official at the federal ministry said Dangote should make an approach through “appropriate channels.”The Ethiopian government is searching for ways to reduce youth unemployment after violent protests by Oromo communities over alleged land dispossession, political marginalisation and repression led the government to declare a state of emergency last year.

Dangote Cement was among several businesses attacked during the unrest. The protests triggered a 20 percent slump in foreign investment to $1.2 billion (R15.68bn) in the six months to December. The order to outsource mining is “a violation of our rights because the government has given us a mining licence,’’ said Devakumar. “If I don’t have limestone and additives my cement plant is useless.”