Africa's industrialization drive received a significant boost as Nigeria's Dangote Group and China's energy major GCL Group signed a 25-year natural gas supply agreement worth approximately $4.2 billion to support a large-scale fertilizer project in Ethiopia.

The agreement, recently signed in Lagos, will see GCL supply natural gas from the Calub Gas Field in Ethiopia's Ogaden Basin to power Dangote's planned urea fertilizer complex in the Somali Region. The project is expected to begin operations in 2029, with an annual production capacity of 3 million tons, making it the largest modern fertilizer production facility in East Africa.

According to the arrangement, the gas will be transported through a dedicated pipeline spanning approximately 108 kilometers to the fertilizer production base in Gode. The total investment of the project is estimated at $2.5 billion, with Dangote Group holding a 60 percent equity stake and Ethiopian Investment Holdings holding the remaining 40 percent.

Aliko Dangote, founder of Dangote Group, said the partnership reflects a broader strategy to advance industrialization across Africa by building integrated value chains that directly link natural resources to manufacturing.

"Africa's energy industry cannot continue exporting raw materials while importing finished products," he said.

"Through strategic cooperation with GCL, we will create an efficient value chain from natural gas extraction to fertilizer production, strengthening Africa's capacity to secure its own food supply."

Zhu Gongshan, chairman of GCL Group, described the agreement as a milestone for China–Africa industrial cooperation, noting that the partnership would combine GCL's expertise in energy infrastructure with Dangote's manufacturing footprint across the African continent.

China and Ethiopia have in recent years advanced practical cooperation across infrastructure, manufacturing and energy, contributing to the gradual improvement of the African country's industrial system and providing strong support for further industrial growth.

Building on this foundation, the integrated natural gas–fertilizer project further links energy development with industrial production. It marks a shift in China–Africa cooperation from standalone projects toward coordinated industrial chain development, while also reflecting the increasingly significant role of Chinese enterprises in advancing Africa's industrialization.

Analysts say the project will have a significant impact on the fertilizer market in East Africa, where countries currently rely heavily on imports to meet agricultural demand. Once operational, the project is expected to meet Ethiopia's entire domestic demand for urea while providing stable supplies to neighboring markets.

Beyond fertilizer production, the project is also expected to stimulate economic vitality in Ethiopia's Somali Region by creating thousands of jobs, improving infrastructure and strengthening the country's energy sector.

Industry observers note that the integrated model — linking upstream gas production, midstream pipeline transportation, and downstream fertilizer manufacturing — represents a new paradigm for large-scale China–Africa industrial cooperation, while also aligning with the global trend toward low-carbon industrial production based on natural gas.