Dangote Cement Plc Annual Report 2021

Strategic report Infrastructure deficit One of Sub-Saharan Africa's top developmental challenges continues to be the shortage of physical infrastructure. The role of productive infrastructure facilities cannot be overemphasised in every nation's economic growth and development. Unfortunately, the current state of Africa's infrastructure is below what the economy needs to thrive. Thus, private organisations and the government have been making actionable steps towards turning around the state of Africa's infrastructure. Some of these measures include public-private partnership (PPP), encouraging foreign direct investment (FDI), and other fiscal arrangements. The African Development Bank (AfDB) estimates that Africa's infrastructure needs amount to $130-170 billion a year, with a financing gap in the range of $68-$108 billion. The infrastructure deficit dramatically reduces intra-African trade and trade with other regions. How we are responding Dangote Cement is the largest cement producer in Sub-Saharan Africa with a capacity of 51.6Mt across 10 countries. As a Company, we see the infrastructure development efforts as opportunities to expand the market for our product. We are leveraging the Dangote brand, our economies of scale, and efficient production facilities in satisfying the rapidly growing cement demand across all markets. We continue to serve the growing demand through prudent expansion into high growth Sub-Saharan Africa cement markets and growth in existing markets. Concrete roads Structural experts have proven the advantages of concrete roads over various other counterpart. Concrete highways are more durable; they can withstand severe rainfall, tropical weather conditions and heavy traffic; they can last atleast 25 to 30 years without the need of major construction repairs. Highways are necessary infrastructural facilities that strengthen the economic activities of every nation as they connect two or more economic locations or markets to engage in viable and legitimate businesses. Building concrete roads, which require less regular maintenance and have higher durability, reduces the negative effect on local economies and communities, thereby enhancing a nation's gross domestic product (GDP). How we are responding Considering the numerous merits of cement- made roads, governments and concerned private organisations have begun to appreciate concrete roads. In Nigeria, Dangote Industry Limited constructed one of the longest 43-kilometre-concrete road in Obajana-Kabba, Kogi state, under the Public-Private Partnership (PPP) program. Broadly, over the last few years, attention towards concrete roads has been remarkable; and there is high optimism that this will persist in the coming years across all markets, especially in Africa. This creates more opportunity for Dangote Cement. Africa's infrastructure needs amount to $130-170 billion a year GDP growth across our operating environment 2022 - all countries of operation are estimated to return to growth Rapid urbanisation Africa's urban population in 2015 was 567 million people, compared to 27 million in 1950. Increased urbanisation necessitates more social amenities, housing and developmental projects in Africa. The growing urbanisation rate is exacerbating the housing deficit in Africa. The rapid urbanisation and natural population growth within urban areas will continue to be an essential demographic phenomenon shaping housing needs. How we are responding As a producer of basic building material in Africa, we see a strong demand stemming from the housing needs in all our markets. Urbanisation will necessitate the demand for more schools, supermarkets, recreational centres, and more corporate organisations. Cement remains the most used material for building any type of house, either personal or commercial. As a result, there is no doubt that cement will continue to be a sought-after commodity across all our markets. Dangote Cement is prepared to ensure cement is available and the market is adequately satisfied through expansion and our "export-to-import" strategy. We will continue to focus on quality and delivery of superior products to our markets. Public-private partnership Dangote signed the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme and is leading the way in building concrete roads. For example: Dangote led the Apapa-Oshodi-Oworonsoki-Ojota highway construction project in Lagos State. 7.0% 3.0% -1.0% -5.0% 2021 2022 2023F Congo Zambia South Africa Nigeria Sierra Leone Cameroon Senegal Ghana. Tanzania Ethiopia Source: IMF estimates investor presentation As the population continues to expand, Africa urgently needs infrastructure, housing and commercial buildings. This creates a tremendous opportunity for Dangote Cement. Visit to the Apapa Oshodi site by President/CE Dangote Industries Limited, Mr Aliko Dangote and Finance Minister, H.E Mrs Zainab Ahmed Dangote Cement Plc Annual Report 2021 03

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