By Peace Udugba -The daily torch media
Africa’s industrial future received a major boost as Dangote Industries Limited signed a landmark $4.2 billion, 25-year natural gas supply agreement with China’s energy giant GCL Group to support its major expansion projects in Ethiopia.
The agreement, formalised in Lagos, marks one of the most significant industrial partnerships between China and Africa in recent years. Under the long-term arrangement, GCL will supply natural gas to Dangote Group’s planned 3-million-tonne-per-year urea fertilizer production complex valued at $2.5 billion.
The project is being developed in partnership with Ethiopian Investment Holdings under a 60:40 equity structure and is expected to commence operations in 2029.
When completed, the facility will become East Africa’s largest modern fertilizer production hub, capable of meeting Ethiopia’s entire urea import demand while also supplying neighbouring markets. Analysts believe the project will significantly reshape the region’s fertilizer landscape by reducing dependence on imports and strengthening agricultural self-sufficiency.
Natural gas for the plant will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and transported through a dedicated 108-kilometre pipeline to the fertilizer complex located in Gode, Somali Region. The initiative aligns with Africa’s broader goal of building an integrated energy-to-food value chain by leveraging local resources to drive industrial autonomy.
President and Chief Executive of Dangote Industries Limited, Aliko Dangote, described the partnership as a critical step toward transforming Africa’s economic structure. He stressed that the continent must move away from exporting raw materials while importing finished products, emphasising the need for integrated industrial development to secure long-term food and energy independence.
Chairman of GCL Group, Zhu Gongshan, reaffirmed confidence in the collaboration, noting that strong support from the Ethiopian government played a key role in finalising the agreement. He added that the partnership would expand opportunities in Ethiopia’s energy, chemical and food security sectors while strengthening market reach across Africa.
Industry observers say the project carries far-reaching strategic benefits, including job creation, infrastructure development and the unlocking of industrial potential in Ethiopia’s Somali Region. The use of natural gas as a feedstock also aligns with global low-carbon transition goals, positioning the initiative as a model for green industrial development across Africa.
By integrating upstream resource development, pipeline transportation and downstream manufacturing, the project establishes a complete “gas-to-fertilizer” value chain. It is also expected to serve as a flagship initiative under China’s Belt and Road framework, demonstrating how energy investment can accelerate agricultural growth and sustainable economic transformation across the continent.
Founded by Africa’s richest businessman, Aliko Dangote, the Dangote Group operates across sectors including cement, food processing, energy and chemicals, and continues to play a leading role in shaping Africa’s industrialisation drive.
