Dangote seeks more ‘favours’ from Tanzanian govt

10Oct 2018
By Financial Times Reporter
Financial Times
Dangote seeks more ‘favours’ from Tanzanian govt

ALIKO Dangote, Africa's richest man, is seeking more concessions from the Tanzanian government as he aims to boost production from his $500 million cement plant in the country to feed export markets.

ALIKO Dangote.

The Tanzanian government has already offered a coal mine to Dangote and recently connected natural gas supply to its Mtwara-based cement factory.

Dangote has been demanding preferential treatment for the gas supplied to the factory to be pegged at “at-the-well prices,” according to government officials.

But according to reports from London where Dangote is attending a summit, the businessman is demanding even more concessions from the Tanzanian government.

"Dangote still having problems with Tanzania’s government. (He) wants to invest to build a jetty to export cement but, the government still wants to charge the company fees of between $12 and $15 per tonne to use the jetty that the company will build and pay for," Jonathan Rosenthal, Africa Editor at The Economist, said via Twitter.

An Australian-based coal mining company last year protested against "special treatment" given to the Dangote cement factory after President John Magufuli ordered that part of a coal field licensed to Tancoal Energy Limited (Tancoal) be immediately allocated to the cement maker.

The complaint by Intra Energy Corporation (IEC) followed Magufuli’s instructions to the then Ministry of Energy and Minerals to give a section of the mineral-rich Ngaka coalfield in Ruvuma Region to Dangote Industries (Tanzania) Limited.

"Tancoal reserves the rights for recourse and protests any change to its resources, which must be a concern not only for all mining companies in Tanzania but also the other cement producers and coal using industries where one customer is allowed special treatment," IEC said in a statement.

The Ngaka coalfield is licensed to Tancoal, which is a joint venture between IEC (70 per cent) and the state-run National Development Corporation (NDC), which holds the remaining 30 per cent stake.

Meanwhile, speaking at the London summit yesterday, Dangote called for conscious efforts at deepening African regional market by African investors and governments to aid rapid growth and development of the continent’s economy.

The Nigerian entrepreneur said the key to Africa’s economic growth and strength is in the development of regional markets, saying “regional markets in Africa must work."

Dangote said Africans must patronise African markets which is why the free trade agreements by African nations is the direction to go to strengthen African markets.

Citing an instance of his own experience, the president of Dangote group referred to the case of neighbouring Benin Republic where the country continues to import cement from China while his Nigerian factory is only 35 miles away from the border.

“We need to trade with ourselves,” Dangote stated as he spoke glowingly about the prospect of African economy, the free trade agreement and the availability of huge raw materials to attract investors.

Prompted by the Editor of the Newspaper, Lionel Barber to speak about difficult markets like Tanzania and Ethiopia, Dangote dismissed the issue difficulty and re-affirmed "our aim is to always provide jobs and worth. As an African investor I don't want any investor anywhere in Africa to have a bad experience."

He repeated his central mantra for African growth urging the reduction of exports of raw materials to other continent but create greater wealth within African economies.

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