Nigeria strikes Sh34bn cement deal with Kenya

Nigeria President Goodluck Jonathan (centre right) and President Uhuru Kenyatta after closing the Kenya-Nigeria Business Forum on Friday. Photo/Salaton Njau 

By GERALD ANDAE

In Summary

• Aliko Dangote on Friday announced that he would put up a Sh34 billion cement factory in Mombasa that would use coal as a source of energy.
• Mr Dangote also noted that he was willing to invest in the oil industry.
• He urged Kenya and Nigeria to strike a deal on visa restrictions in order to allow business people from both countries to work with ease.

Competition in the cement industry is set to intensify as a Nigerian tycoon plans to build a multi-billion dollar plant at the Coast, increasing the number of factories to seven.

Aliko Dangote, Africa’s richest man, announced that he would put up a $400 million (Sh34 billion) cement factory in Mombasa that would use coal as a source of energy.

Industrialisation Cabinet Secretary Adan Mohamed welcomed the new plans by the investor.

“Mr Dangote is a respected businessman and his entry in the country will make the market competitive, driving up efficiency,” he said.

The minister expressed optimism that Mr Dangote would use the locally available raw materials to cut down on importation of clinker, which is used in cement production and accounts for 60 to 70 per cent of the total cost of the product.

Speaking during the Nigeria-Kenya business forum in Nairobi on Friday, Mr Dangote also noted that he was willing to invest in the oil industry.

“Nigeria has a vast knowledge on oil and we will also be happy to invest in the sector as we aim to strengthen the business partnership between the two countries,” says Mr Dangote.

The two countries, led by chairmen of their respective chamber of commerce, signed a memorandum of understanding on trade and investment, oil and gas, tourism, visa exemption for diplomatic passport holders, conclusion of agreements on double taxation, agriculture and fisheries.

(READ: Traders seek new ventures in talks with Nigeria tycoons)

Kenya Private Sector Alliance chief executive officer Carole Kariuki said businessmen from the two countries would partner in manufacturing, banking and agricultural sectors among other areas.

Mr Dangote, however, urged the two governments to strike a deal on visa restrictions in order to allow business people from both countries to work with ease.

“Visa restriction has been a major hindrance to investors, many of them are restricted to visas that expire after two years, this period is not enough for them to carry out a meaningful business.’’

Mr Dangote also said that business people from both countries should get their travelling documents at the airport as opposed to going to the embassies, adding that the move will save the time taken in acquiring the documents.

The government has ordered line ministries to expedite removal of restrictions on visa to allow speedy implementation of the agreements.

President Uhuru Kenyatta told the forum that Kenya is committed to eliminating barriers to movement of goods and services between the two countries.