Built To Withstand

The cement industry in Sub-Saharan Africa is at a pivotal moment. In a region that stretches across more than 43 million km² and is home to over 1.2 billion people, producers are grappling with a host of economic challenges while striving to meet the growing demand for cement – a demand fuelled by rapid urbanisation and large-scale infrastructure projects.

Despite facing persistent economic obstacles, such as currency depreciation, rising inflation, energy shortages, and supply chain disruptions, the sector has shown notable resilience. The cement market in Sub-Saharan Africa is projected to grow at a compound annual growth rate (CAGR) of 3.1% between 2025 and 2034, driven by increasing urbanisation, infrastructure development, and supportive government policies.

This article examines how the cement industry in three of Sub-Saharan Africa's most dynamic markets – Nigeria, Ethiopia, and South Africa – is adapting to the complex economic backdrop.

Nigeria

Economic overview

Nigeria is currently grappling with its worst economic crisis in a generation, marked by soaring inflation, currency devaluation, and widespread hardship. The removal of the fuel subsidy and the liberalisation of the foreign exchange market under President Bola Tinubu have triggered steep increases in petrol prices (up nearly 500%) and led to a sharp depreciation of the naira, which has lost over 75% of its value since June 2023. With annual inflation exceeding 23% and food inflation over 21%, purchasing power has been significantly eroded, particularly as wages have remained largely stagnant.

The Central Bank’s aggressive interest rate hikes have done little to tame inflation, which is largely driven by structural factors such as insecurity, high transportation costs, poor agricultural productivity, and a weakening currency. The cost-of-living crisis has deepened, pushing more Nigerians into multidimensional poverty. Despite government interventions like student loans, a minimum wage review, and food distribution, these efforts have been limited in reach and impact. Meanwhile, economic growth remains sluggish, with limited job creation outside urban service sectors. With foreign exchange shortages expected to worsen and social unrest rising, the outlook for 2025 remains bleak for most Nigerians.

Cement sector update

Despite the bleak economic picture, Nigeria’s cement industry has shown remarkable resilience. Leading the sector is Dangote Cement, which commands over 60% of the domestic market. As Aliko Dangote recently remarked, “Nigeria used to be the second-largest importer of cement in the world. Now we export more cement than any other African country.”

Dangote Cement remains Africa’s largest producer, with 32.3 million tpy of installed capacity in Nigeria and an additional 16.8 million tpy across nine other African countries. In 2024, Nigeria’s combined cement and clinker exports rose by 69.1% year-on-year to reach 1.2 million t, up from 704 700 t in 2023. This growth was driven largely by improved operational efficiency. Over the past five years, these exports have grown at a compound annual rate of 36.2%.

Domestically, Dangote Cement is expanding aggressively. Construction has resumed on a 6 million tpy cement plant in Itori, Ogun State, which will bring the state's total capacity to 18 million tpy once completed. Dangote is also adding 3 million tpy at its Obajana site and building what it calls 'Nigeria’s largest seaport' at the Olokola Free Trade Zone.

In Q1 2025, Dangote Cement posted a profit after tax of US$131 million for the quarter ending March 2025 – an 86% year-on-year increase – driven by a 54% rise in Nigerian revenues. EBITDA also climbed 49% to US$289 million.

Other players are also expanding. Kebbi State recently signed a US$2.4 billion agreement with MSM Cement for a new 3 million tpy plant, while Bauchi State Government in partnership with Resident Cement have established a 10 million t capacity cement factory in Gwana. Even in the face of economic turbulence, Nigeria’s cement industry remains robust. Strategic pricing, export-led growth, and continued investment in production capacity have allowed major players to not only weather the storm but position themselves for future gains.

Ethiopia

Economic overview

Similarly, Ethiopia is facing one of the most severe economic downturns in its modern history. Years of policy missteps, conflict, and heavy state control have pushed the country into deep crisis. Ethiopia's nominal GDP fell sharply from US$207 billion in June 2024 to US$100 billion by September 2024, according to the Ministry of Finance. At the same time, inflation has remained persistently high – hovering around 30% annually from 2022 through 2025.

Poverty is worsening, and the private sector continues to be constrained by restrictive fiscal and monetary policies. Job creation remains far below what is needed to keep pace with a rapidly growing population.

Although recent gains in coffee and gold exports offer some relief, investor confidence remains low. Ethiopia defaulted on a US$1 billion Eurobond in 2023 and is now locked in tense negotiations with creditors. The IMF has stepped in with a proposed US$3.4 billion bailout, conditioned on deeper debt restructuring. However, bondholders have pushed back, claiming the country’s potential for recovery is being overlooked. Without meaningful reform, weak institutions, declining productivity, and rising food insecurity will continue to undermine Ethiopia’s development outlook.

 

Cement sector update

Amid the broader economic and political challenges, Ethiopia’s cement sector has emerged as a rare point of strength. National production capacity has reached 20 million tpy, driven by large-scale investments and steady infrastructure demand.

Leading this growth is the newly inaugurated Lemi National Cement Factory, the largest in the country. A US$600 million joint venture between Chinese and Ethiopian partners, the plant produces 15 000 tpd of cement, accounting for nearly half of Ethiopia’s total supply. Its impact has been significant: it has helped stabilise cement prices, reduce shortages, and create over 1000 jobs.

Beyond scale, the Lemi factory represents a step forward in sustainability and technology. Equipped with energy-efficient systems, advanced automation, and high-performance dust collectors, it sets a new benchmark for environmental and operational standards in the country. The plant has also served as a platform for local skill development, as Ethiopian workers receive technical training in collaboration with Chinese engineers.

Meanwhile, Dangote Cement is expanding its presence with a US$400 million investment to double capacity at its Mugher plant to 5 million tpy. The expansion is expected to create thousands of jobs and reflects growing investor interest. Recently, at the African Union summit in Addis Ababa, Aliko Dangote remarked, “Ethiopia is one of the most promising investments we have outside of Nigeria.”

While much of Ethiopia’s economy and political landscape remains under strain, the cement industry offers a rare example of resilience and renewal.

South Africa

Economic overview

South Africa’s economy is in noticeable decline, grappling with a mix of long-standing structural issues and recent shocks that have deepened economic hardship for millions. Once seen as Africa’s economic powerhouse, the country now faces stagnation, with growth sluggish and unemployment stubbornly high – hovering above 32%, and reaching nearly 60% for young people.

Several factors have contributed to this downturn. Persistent power outages caused by Eskom’s operational and financial struggles have disrupted businesses and deterred investment. Inflation has surged, particularly in food and energy prices, squeezing household budgets while wage growth remains weak. These pressures have led to an erosion of purchasing power and increased cost-of-living challenges.

Fiscal constraints have tightened as public debt has risen sharply, limiting the government’s ability to fund infrastructure and social programmes needed to support growth and reduce inequality. The outlook for 2025 remains cautious at best, with policy-makers under pressure to implement meaningful reforms that can stimulate growth, stabilise the economy, and create jobs before the economic decline deepens further.

Cement sector update

In a challenging economic backdrop, South Africa’s cement industry remains a pillar of quiet strength. Backed by infrastructure plans, urban growth, and bold company strategies, the industry is not only weathering the storm – it is actively positioning for sustainable expansion. The market is expected to grow at a compound annual growth rate of 2.5% from 2025 to 2034, reaching approximately 17.14 million t by 2034. PPC Ltd, the sector leader, has spearheaded this resilience with its 'Awaken the Giant' turnaround strategy. In FY25, PPC reported its strongest performance since 2018, with a 28% rise in EBITDA to R1.59 billion, and free cash flow soaring 306% to over R1 billion. EPS jumped more than 400%, and dividends resumed for the first time since 2016.

In a bold step to strengthen long-term competitiveness, PPC has announced a R3 billion investment in a new 1.5 million tpy integrated plant in the Western Cape. Partnering with Sinoma, the facility will replace ageing capacity while enhancing efficiency and lowering production costs. Located near high-quality limestone reserves and the coast, the plant is designed to compete effectively with cement imports, particularly from Vietnam.

Though economic headwinds persist, the cement industry has maintained momentum by focusing on strategic execution, operational resilience, and technological innovation. These efforts position the sector not only to survive a weak macroeconomic environment but to play a pivotal role in South Africa’s long-term infrastructure and economic development.

Conclusion

Nigeria, Ethiopia, and South Africa illustrate the paradox at the heart of Sub-Saharan Africa’s cement industry: remarkable sectoral resilience amid deep-rooted economic fragility. Across these diverse markets, macroeconomic and political pressures – ranging from inflation and currency volatility to security concerns – continue to weigh heavily on growth.

Yet the cement sector has proven adaptive. With the right mix of innovation, policy support, and infrastructure planning, the industry is well positioned to play a central role in Sub-Saharan Africa's next phase of development.

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Read the article online at: https://www.worldcement.com/special-reports/17072025/built-to-withstand/