Nigeria’s Dangote Group will invest up to $1 billion in Zimbabwe, targeting key sectors including a petroleum pipeline, power generation, and a cement plant in a move that signals growing confidence in the Southern African nation’s economy.
The announcement, made by Africa’s richest man Aliko Dangote, underscores a major push for Zimbabwe infrastructure development and highlights the strategic importance of cross-border investment within Africa. These Aliko Dangote projects are poised to address chronic energy shortages and boost industrial capacity.
The Dangote investment Zimbabwe plan was formalized on Wednesday after Dangote met with Zimbabwean President Emmerson Mnangagwa in the capital, Harare. The two leaders signed an agreement paving the way for the conglomerate’s entry into the market.
“We have just signed an agreement between Zimbabwe and the Dangote Group to do various investments in various sectors, some of which are of course cement, power generation, and a pipeline to bring petroleum products,” Dangote told Who Owns Africa.
Details of the Planned Investments
The cornerstone of the deal is a planned fuel pipeline designed to transport petroleum products efficiently across the region. Dangote indicated this infrastructure would dovetail with his group’s massive oil refinery project in Nigeria, which is slated to be one of the world’s largest.
The investment package also includes building new power plants, with a potential focus on coal-based generation to help address Zimbabwe’s severe electricity deficits that have long hampered economic activity.
Furthermore, the group will establish a new cement manufacturing facility, leveraging its position as a leading African producer to increase local supply and reduce the country’s reliance on imports.
A Second Chance After a Previous Setback
This new commitment marks a significant reversal for Dangote, who had explored similar opportunities in Zimbabwe in 2015 under the late President Robert Mugabe but ultimately shelved the plans.
When asked about the renewed interest, Dangote pointed to positive changes in the country’s governance since Mugabe’s ouster in 2017. “There are quite a lot of changes between that time when we came and now. The government is solid, there is a lot of transparency,” he said.
His remarks align with the Mnangagwa administration’s ongoing, though challenging, efforts to attract foreign investment through business reforms under its “Zimbabwe is open for business” mantra.
Potential Impact on Zimbabwe’s Economy
The $1 billion investment, one of the largest foreign commitments to Zimbabwe in recent years, holds substantial promise for its struggling economy.
- Job Creation: The projects could create thousands of jobs in construction and ongoing operations.
- Energy Stability: Enhanced power generation could alleviate frequent blackouts that cripple industry and daily life.
- Industrial Growth: A new cement plant and a more efficient fuel supply chain would lower costs for key sectors, fostering broader economic growth and supporting construction.
The deal signals a vote of confidence in Mnangagwa’s government. However, its success will hinge on smooth implementation, requiring the navigation of regulatory hurdles and Zimbabwe’s well-documented currency instability.
As Africa advances the African Continental Free Trade Area (AfCFTA) to boost intra-continental trade, this partnership between a Nigerian industrial giant and Zimbabwe could set a powerful precedent for future collaboration.
