According To Bloomberg, Ethiopian regional officials are demanding that foreign cement producers including Dangote Cement Plc hand control of some parts of their businesses to groups of unemployed youths.
The Nigerian company, controlled by Africa’s richest man, Aliko Dangote, and others such as Saudi billionaire Mohammed al-Amoudi’s Derba MIDROC Cement Plc, should allow the youth to run their pumice mines, according to a draft contract drawn up by Oromia state’s East Shewa Zone administration this month. Pumice is an additive used in cement manufacturing and its extraction is overseen by local bureaucrats, rather than Ethiopia’s central government.
Prime Minister Hailemariam Desalegn’s administration is trying to reduce youth unemployment five months after it declared a state of emergency to deal with violent protests by Oromo communities over alleged land dispossession, political marginalization and repression by the state. Dangote Cement was among several businesses attacked during the unrest, which caused foreign investment to slump.
The local administration “recently” halted Dangote and Derba’s operations amid discussions about the proposals, the Addis Ababa-based newspaper The Reporter said on March 11, citing Derba’s chief executive officer and chairman of the Ethiopia Cement Producers’ Association, Haile Assegidie. He said proposals to give control of pumice to youth cooperatives came without warning, according to the paper. Calls to Haile’s mobile phone on March 16 didn’t connect.
The disruptions haven’t forced Dangote to stop output, CEO Onne van der Weijde told Bloomberg in an interview. The company’s plant in Mugher, about 90 kilometers (56 miles) north of Addis Ababa, has the capacity to produce 2.5 million metric tons a year of cement, according its latest annual report, which said Dangote plans to double the factory’s capacity.
The Nigerian company is discussing the proposal with Oromo officials and may be willing to sign a contract “as long as that doesn’t involve higher costs and lower quality and the quantity can still be delivered,” he said. “They shouldn’t force us to do it and then charge a high fee for getting something that we were doing ourselves before.”
Prices being discussed are from 20-30 birr ($0.89-$1.33) per metric ton of pumice, Van der Weijde said. The contract refers to 20 birr.
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Source; Bloomberg
