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Dangote’s New Business Came at the Right Time

In March, Dangote’s $2.5bn fertiliser plant in Nigeria’s economic capital, Lagos, started production. The 3-million tons a year capacity will meet local demand of 1.5-million tons a year and have a large surplus for export. Producing both urea and ammonia fertilisers, it’s the world’s third-biggest fertiliser plant and second-biggest producer of urea-based fertiliser. Global fertiliser prices have been on the rise since 2020, surging as much as 70% in the past year. A big boost to the rising prices has been provided by Russia’s invasion of Ukraine, which has led to a spike in natural gas prices, the key feedstock for ammonia and urea-based fertilisers. While Dangote’s initial export targets were primarily Africa – the plant has the touted objective of making the continent self-sufficient in food production – current market realities mean there’s increasing demand from outside the continent. Orders have come from far flung places in the US, Brazil, Mexico, India and the EU. While the Dangote conglomerate’s strong positions and consistent profits have come from investments in production, giving it the powers to determine prices, critics have accused the firm of using its influence to suppress wages and gain favourable tax status from the government.