STAFF WRITER
The last time Aliko Dangote tried to invest in Zimbabwe, it didn’t end well. His team was left frustrated by red tape, no guarantees on tariffs for power projects, and claims that some higher-ups tried to shake him down for bribes.
Now, the world’s richest black man is back for another look, and again, he has eyes on cement and power.
Senzi Sikhosana of Bard Santner, the asset management firm facilitating Dangote’s visit, said on Wednesday: “He is looking at cement, looking at a coal power plant as a start, but also he’s looking at fertiliser. We’ll try to guide him and show him the potential in the country.”
So, what’s on offer this time? What went wrong the last time? And, what has changed?
On his first visit a decade ago, Dangote had his sights set on the Sengwa coal fields, which RioZim had put up for investment. The plan involved building a 2,800MW coal power plant.
To make it work, Dangote entered talks through the Black Rhino Group, an infrastructure investment arm backed by US private equity giant Blackstone. He told the government: I will invest in power, but only if we can charge cost-reflective tariffs in USD. The government didn’t want this. Back then, it controlled electricity tariffs and wouldn’t allow investors to charge in foreign currency. The deal collapsed.
Things look a bit different now on that front. Zimbabwe has loosened its grip on power pricing, letting independent producers charge commercial tariffs and repatriate profits. In 2015, Dangote’s team also wanted guarantees they could export some of Sengwa’s coal to feed their Zambian cement plant, something that reportedly caused “discomfort” among Harare officials.
Today, those coal fields – with millions of tonnes in reserve – remain idle. In 2020, Rio Energy, a RioZim subsidiary, announced a deal with China Gezhouba Group to develop Sengwa. This deal died when China ended funding for new offshore coal investments for its banks. Dangote was an associate of the late Harpal Randhawa, RioZim’s majority shareholder, who died in a plane crash in 2023. Dangote met Harpal’s widow during his Zimbabwe visit.
Cement: A concrete plan?
Zimbabwe’s cement demand is growing, driven by housing and infrastructure projects. PPC is the market leader, with 1.4 million tonnes in capacity. Crisis-hit Khayah Cement, with the second-largest capacity, is now under East Africa’s Hima Cement after going through business rescue. When Dangote first visited in 2015, he told then–Vice President Emmerson Mnangagwa: “We look at setting up something that can translate into a million-and-a-half tonnes so that even when we continue to use cement, there won’t be a shortage.” This didn’t happen after Dangote abandoned his plans.
Since then, a rush of new players has entered the market, including Chinese investors like Huaxin, which is building a plant in Mt Hampden. The question now is whether Dangote still sees room to build a plant here, or if he’s happy to see product streaming across the border from his Zambia plant. It depends on whether what he finds on the table is different from 2015.
Energy infrastructure
Dangote’s refinery is setting up storage tanks in Namibia to hold at least 1.6 million barrels of petrol and diesel, which will supply fuel across southern Africa, including Zimbabwe. The country is looking to interest Dangote in widening oil infrastrucuture. Zimbabwe has long desired investment into a second oil pipeline linking to Mozambique, and has started expanding storage facilities in Harare, hoping to become a regional hub.
About those bribe claims
Dangote’s first Zimbabwe attempt came with controversy. Back in 2018, his associate Josey Mahachi said: “For you to invest in Zimbabwe, you had to grease some people’s palms, which is something that Dangote doesn’t want.”
This time, many will want to see if anything is different, given that corruption remains a qualification for many in government. Yet, with the involvement in the tour of Paul Tungwarara, the “presidential investment advisor”, those giving the talks a side eye may be forgiven. On that score, the talks are already one point down on the credibility stakes.
In the end, what will set this comeback tour apart from the failed one a decade ago are results, and not “mega deal” headlines.