Federal government has allowed Dangote Cement to resume exports across Nigerian 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, 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 month through September.
The Lagos-based company’s plan to buy back some of its shares has been delayed by market volatility and low liquidity, which have affected valuation, Guillaume Moyen, acting chief financial officer, said at the same conference call.
Dangote Cement shares were unchanged at 185 naira per unit at close 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.
Bloomberg