The Ethiopian government has stopped accepting foreign investments in cement projects. Representatives of foreign companies told The Reporter that they were told that the government would not accept investment applications for the construction of cement factories. The Ministry of Industry (MoI) recently informed the Ethiopian Investment Agency not to accept new investment projects.

Shimeles Wolde, chemical industries directorate director at the MoI, told The Reporter that the decision was made with the view to avoiding unnecessary competition. “This has to be clear. More than 40 cement companies are now licensed. Twenty-two of them have started work (either construction or production). What we have to do now is to assist those who did not commence work. Attracting foreign investment on cement production at the moment is unnecessary. We have to push those companies who are licensed and did not start work to proceed with their planned projects,” Shimeles said.

Currently, 15 factories are producing cement with a total production capacity of 7.8 million tons a year. According to Shimeles only 5.3 million tons of cement are channeled to the market by the local companies. Under the government’s five-year Growth and Transformation Plan, the government plans to boost cement production to 27 million tonnes. Last year, the government suspended the import of cement.

Shimeles said his ministry would assist the licensed cement factories to start production. However, he said those who had failed to execute their projects would be compelled to return the plots of land they acquired from the government.

The Ministry of Industry recently informed the Ethiopian Investment Agency not to accept new cement investment projects. The Ethiopian Ministry of Foreign Affairs has also informed its embassies of the government’s decision.
The scarcity of cement is a recent memory. Until recent months cement has been a rare commodity. However, in the past few months some cement factories began lamenting the declining demand for cement as more factories are being opened. The largest cement factory, Muger’s sales has declined by 50 percent.

EthiopianReporter
By KALEYESUS BEKELE