Murky Dangote Cement Killings Show Ethiopia’s Faultlines and Abiy’s Challenge

Murky Dangote Cement Killings Show Ethiopia’s Faultlines and Abiy’s Challenge

By Arefaynie Fantahun and William Davison, May 25, 2018

Former Ethiopian Prime Minister Hailemariam Desalegn (left) and Aliko Dangote at the factory’s opening ceremony; William Davison 4/6/15
  • Many theories but little evidence of why employees were shot dead
  • Attack follows labour dispute and three years of protests in Oromia
  • Prime Minister Abiy Ahmed has to satisfy elites and demonstrators

Last week’s daytime shooting of Dangote Cement’s Indian country manager and Ethiopian colleagues left three bodies slumped in a Toyota Land Cruiser but few clues about the motive for the brazen attack.

The May 16 killings occurred in Adaa Berga Woreda in Oromia region, around five kilometers from the $600-million factory owned by Nigerian billionaire Aliko Dangote. The victims were Deep Kamra, his female assistant Beakal Alelegn, and Tsegaye Gidey, who was shot in the driver’s seat.

Further details are missing or contested and rumours about the murders are rife. Newly appointed Oromia Youth and Sports Bureau Head Milkeessaa Miidhagaa said the deadly ambush was to undermine new Prime Minister Abiy Ahmed. However, a newspaper report pointed to a recent pay dispute with truck drivers and said Kamra received a texted death threat a week before his murder.

Abiy is the leader of the Oromo wing of the ruling Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF). Many Oromo believe the four-party coalition has been controlled by the Tigrayan People’s Liberation Front (TPLF).

Although there is no solid evidence of a political connection, polarised interpretations are familiar from the last three years of instability that saw hundreds of people killed by security forces nationwide. While most protests in Oromia were conducted peacefully, not all were. Some activists blamed violent incidents on agent provocateurs from the intelligence apparatus; others countered they were the result of out-of-control demonstrations.

Regardless of the precise machinations, the killings indicate the continued risks for investors in Ethiopia, and especially Oromia, where hundreds of farms, factories and trucks, including Dangote’s, were torched during protests that centred on disputes over land and exploitation. The Dangote attack probably makes it less likely that there will an early removal of a six-month State of Emergency that began in February.

An Ethiopian soldier during the opening of Dangote’s factory; William Davison 4/6/15. Disgruntled Workers

A Dangote official told Bloomberg that gunmen fired after Tsegaye lost control when a concrete block was thrown, but The Reporter newspaper said two attackers waited on a hill and shot the driver first. Activists accused individuals from the security and business elite of orchestrating the killing, without providing evidence.

Milkeessaa, who has said previously that rogue government-linked actors have profited from smuggling in Oromia, offered a similar view, illustrating the EPRDF’s rifts. It “is not simple killing. Highly organized one! It is an attempt to shade the image of the country and the new leadership,” he wrote about the attack on his Facebook page in a May 17 post that promised a thorough investigation.

As well as deadly state repression, there has been the occasional violent labour dispute in recent years in Ethiopia, and under-publicized targeted killings by insurgents. Several government and security personnel have been assassinated within the last two years around Dembi Dollo in western Oromia, a former stronghold of the rebel Oromo Liberation Front, according to a U.S.-based and local activist. In those incidents, individuals were warned about their abusive actions and then killed if they didn’t pledge to side with the people, a third informant from Oromia said.

That process did not precede the recent killings and a source said Dangote officials instead believe last week’s attack was carried out by mercenaries hired by disgruntled workers, although that has not been confirmed by the company. Federal and regional government spokespeople also didn’t respond to requests for comment.

Dangote Cement began production in Ethiopia in 2015 around 85 kilometers west of Addis Ababa. The plant, which imports coal through Djibouti’s port, has the capacity to annually produce 2.5 million tons of cement, employs around 1,200 people, and had plans to double in size.

Despite providing jobs, the firm has had tense relations with the local community. In an effort to reduce unemployment, last year East Shewa Zone’s administration pressed for youth associations to run the sand, pumice and clay mines that supplied Dangote’s factory, which the company objected to. It subsequently had its licence suspended in August by Oromia’s government after labor-related complaints.

Executives, including Kamra, threw an Ethiopian New Year’s Eve party on September 11 for 1,500 local residents where they apologised for blunders and made peace with officials and elders. Relations then improved until the recent truck drivers dispute.

Concrete Successes

The shock killings are a blight on an industry that is one of the success stories of Ethiopia’s Developmental State. The sector has expanded strongly from producing 800,000 tons in 1999 to 12 million tons in 2017 amid an infrastructure and real estate boom. Yet the rush to build increased pressures on land and contributed to discontent, especially after encroachment onto Oromia farmland surrounding Addis Ababa.

A torched farm building near Wenchi in Oromia; William Davison 7/1/16

Around 70 percent of cement production is controlled by five companies: Dangote Cement; Derba Midroc Cement, owned by the country’s largest investor Mohammed Al Amoudi, an Ethiopian-born Saudi national currently detained in Riyadh; state-owned Mugher Cement Enterprise; TPLF-linked Messebo Cement Factory, which supplies the Grand Ethiopian Renaissance Dam; and privately owned Habesha Cement, which had to suspend production in October for a week after protesters demanded jobs.

Ethiopia’s economy is facing headwinds after officially growing at around 10 percent annually over the last decade. It has been hampered by the unrest and the government has slowed external borrowing as it faces growing foreign debt repayments amid a trade deficit that is around 16 percent of gross domestic product.

In December, U.S. private equity giant KKR sold its estimated $200 million investment in Dutch flower grower Afriflora Sher, which has also suffered labour unrest in central Oromiya. Investors including U.S. clothes company PVH Corp., the owner of the Tommy Hilfiger brand, have moved into new industrial parks, creating a positive FDI trend. Maintaining that trajectory means drawing in more foreign capital while ensuring that there aren’t another slew of badly administered sweetheart deals for investors that spark more instability.

Abiy’s tricky task keeping both the business establishment and demonstrators happy was highlighted this month in incidents involving Al Amoudi, who is either cast as a looting oligarch or beneficent investor. First, protests alleging pollution in Guji Zone in Oromia helped produce a government decision not to renew the licence of his Midroc Gold company, which runs the nation’s only commercial gold mine. Within 10 days, after meeting Saudi Crown Prince Mohammed bin Salman, Abiy announced that Al Amoudi would soon be freed.

Source: Ethiopian Observer


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