Friday, September 6, 2013

Nigerian tycoon Dangote to put up Sh35bn cement firm in Kenya

Aliko Dangote


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Nigerian businessman and Africa’s richest man, Mr Aliko Dangote, Thursday announced plans to put up a Sh35 billion ($400 million) cement factory in Kenya as the two countries pursue stronger trade relations.

Speaking at a Kenya-Nigeria investment roundtable, Mr Dangote said one of his companies, Dangote Cement, would begin construction of the two-million-tonne-capacity factory within the next few months.

Dangote Cement is the largest cement manufacturer in Africa and already has interests in Tanzania and Ethiopia.

“We have realised that if we really want to do something big in East Africa, we must operate in Kenya. We believe that in the next two and half years, we will be the dominant player in cement in Kenya,” said Mr Dangote.

The factory will rely on coal as a source of energy. The renowned businessman has also had talks with Energy minister Davis Chirchir on investments in the nascent oil and gas sector, as well energy generation.  

Dangote Kenya Ltd, a subsidiary of the Dangote Group, had already been issued a mining licence but it was cancelled by the government together with 42 others earlier this year.

But though Mining Cabinet Secretary Najib Balala did not confirm whether he was meeting with Mr Dangote on the matter, he implied that the government may reverse the decision to cancel the licence.

“For investors like Mr Dangote, we roll out the red carpet,” said Mr Balala.

Mr Dangote, who is a significant shareholder in Nigerian bank Zenith, also revealed that the financial institution was planning to set up shop in Kenya.

A delegation of about 150 Nigerian businessmen, led by their President Goodluck Jonathan, are in the country to engage the local private sector and government officials on matters of trade.

President Uhuru Kenyatta, who spoke to business leaders during the session yesterday, said the two governments had signed seven pacts to ease trade and improve ties between the two countries.

Key among these is an agreement that will extend the maximum duration of visas granted to Nigerian businessmen from two years to five years and 10 years, depending on the size of their investments in Kenya.

“We must facilitate our people to trade with ease. I have instructed the Cabinet Secretary for Interior to ensure that all Nigerian business people willing to work in Kenya are extended five-year and 10-year visas,” said the President.

Other Memoranda of Understanding (MoU) covered the tourism sector as well as conclusion of agreements on double taxation.

Kenya is also looking to Nigeria to share expertise and technical capacity in oil and gas sector.

The two countries, by eliminating trade barriers, hope to double their shared volume of trade within the next two years. Trade between Kenya and Nigeria has slumped over the past three years.

Kenya’s exports to the West African country fell from Sh3.2 billion in 2008 to Sh2.9 billion last year.

During the forum, business leaders from both countries met in committees and produced recommendations to both governments, which if adopted, are expected to further boost trade.

They mooted the creation of a Trade and Investment Council which will be steered by the relevant ministries in both countries.

The Kenya Chamber of Commerce and Industry (KCCI) signed a memorandum of understanding with its Nigerian counterpart under which the two firms will pursue mutually beneficial trade and investment initiatives.