Nigeria Exempts Dangote, 2 Others From Border Closure
Nigeria Exempts Dangote Cement From Land Border Closure
Nigeria has allowed Dangote Cement to resume exports across its land borders, raising hopes that Africa’s most-populous nation may be opening up trade with neighbors after a year-long blockade.
President Muhammadu Buhari’s administration gave permission for Africa’s biggest cement producer to export to Niger and Togo in the third quarter for the first time in ten months, Michel Puchercos, chief executive officer, said on an investor call Monday.
The exemption to Dangote Cement is seen as a softening of the government’s position on a border closure that started in August last year, and could open the way for other businesses to fully resume exports across the country’s land barriers.
BUA Group and a gas company have received presidential approval to move goods across the land borders, Joseph Attah, the spokesperson for Nigerian Customs, said by phone from Lagos, without providing details. Rival Lafarge Africa Plc hasn’t received permission to export across the land borders, according to a company spokeswoman.
Nigerian authorities closed borders with neighboring countries including Benin and Niger to curb smuggling and boost local production. Although the blockade encouraged the consumption of locally grown produce such as rice, it hurt factories across west Africa, which rely on Nigeria’s market of 200 million people.
Dangote Cement resumed land exports with “restricted volumes,” and plans to grow the trade using the sea channels, according to Puchercos. A total of 69 tons were exported through land borders in the period, less than 1% of the 11,741 tons of cement sales in the nine months through September.
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The Lagos-based company’s acting chief financial officer, Guillaume Moyen, said timing of a planned share buyback is still under consideration, given “operational and liquidity dimensions,” as well as the potential impact on valuation.
“The way we look at it at the moment, is the current environment remains relatively volatile,” Moyen said. We’ll “try to figure out when is the right timing for us to operate this buyback program.”
Dangote Cement shares were up 8.1% to 200 naira per unit at 3:26 p.m. in Lagos, the commercial capital. The stock has gained 30.3% this year, compared to 21.6% advance by the 153-member Nigerian Stock Exchange Main-Board Index.
©2020 Bloomberg L.P.