Africa’s 2022 trading outlook

Published 14 February 2022

As the African cement sector begins to adjust to a post-pandemic climate, Harpreet Duggal, CEO of trading company Black Rock Cement, UAE, and former CEO of Dangote Cement Tanzania, shares his expert opinion on the outlook for cement trade in the region in 2022.

Harpreet Duggal, CEO Black Rock Cement

ICR: Could you provide a brief overview of Black Rock Cement’s operations and the global markets it supplies with cement, clinker and raw materials?
Harpreet Duggal (HD): Black Rock Cement is a boutique cement trading company based in Dubai, UAE. While we are based in Dubai, our focus is on Africa, where I spent 14 years with Holcim and Dangote. We primarily deal in cement, clinker, slag, fly ash, coal, petcoke and structural steel for our customers in the Middle East and Africa. Our bagged cement is subcontract manufactured in Pakistan under the Black Rock brand, and sold primarily in east Africa and Indian Ocean islands.

ICR: What can you tell us about the current cement and clinker demand situation for the markets Black Rock Cement supplies? How was the sector impacted by the COVID-19 pandemic and is the situation stabilising?
HD: When COVID-19 struck in 2020, sub-Saharan Africa had to bear the brunt of the pandemic as well as the commodity market decline. This, coupled with inflation and foreign exchange volatility, resulted in a challenging year for most African countries. As I always say, each country in Africa is different. The COVID-19 impact on these countries was also different. The largest impact on growth has been for tourism-dependent economies, while commodity exporting countries have also been hit hard. Nevertheless, more diversified economies such as Ghana, Ethiopia, Senegal and Tanzania were not impacted significantly. South Africa and Zambia were hit the hardest.

But the good news on the whole is that the situation is stabilising. With the loosening of containment measures (see Figure 1), helped by higher commodity prices and easing financial conditions, construction activity has come back strongly. Cement demand in 2021 was up by five per cent in east Africa and by eight per cent in west Africa. Southern Africa was the hardest hit. The recent scare about the “South African” Omicron [variant] added further to the region’s woes.

Figure 1: COVID-19 Stringency Index

Figure 2: IMF outlook by region

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