Land border closure: Anger as Dangote, BUA get waiver for export

Outrage has greeted the revealed exemption of Dangote Cement, BUA Cement and an oil and gas firm from the ongoing land border closure policy.

The waiver means that the multinational companies could export their commodities through the land borders without any restriction.

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The news came at a time when entrepreneurs and merchants who relied on exports were complaining that their businesses had been crippled.

Some players in the export and import sector yesterday condemned what they called “selective favour”, alleging that the federal government was making the rich richer at the detriment of others.

Daily Trust recalled that on August 20, 2019, the Nigeria Customs Service (NCS) announced the Exercise SWIFT Response, which prohibited the movement of goods into or out of the country with no timeline for reopening the borders.

President Muhammadu Buhari said the action was to encourage local production, create employment and protect upcoming industrialists.

He added that time had come to end rampant smuggling across the porous frontiers.

The Comptroller-General of the Nigerian Customs Service (NCS), Col. Hameed Ali (retd.) said at the time, “All goods, for now, are banned from being exported or imported through our land borders and that is to ensure that we have total control over what comes in.”

The enforcement involves Customs and Immigration with support from the Nigerian Army and other security agencies.

How we got our waiver – Dangote

The Managing Director of Dangote Cement, Michel Puchercos, while briefing investors during a conference call on Monday, said the company had resumed cement export to Niger Republic and Togo “in a controlled measure” after it got a waiver from the federal government.

It was learnt that the waivers for Dangote and Bua were issued by the Minister of Finance at the instance of the Presidency.

An oil and gas company also got a waiver for gas export but those with the knowledge of how and why the companies were granted waivers refused to disclose the name of the oil company.

The Dangote Group denied doing anything wrong on getting a waiver for its exports.

A statement from Jibrin Abubakar, a spokesman for the group quoted Mr Anthony Chiejina,  the company’s chief of branding and communications saying the report attributed to Bloomberg was misleading and mischievous because it focused only on Dangote Cement as the sole beneficiary of the partial special dispensation.

“Dangote Cement is a publicly quoted company and complies strictly with the Securities & Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) full disclosure clauses and regularly updates transparently, our transactions to our shareholders and it is disheartening that such honest disclosure is being interpreted negatively,” he said.

We didn’t get ‘blanket’ waiver – BUA

On its part, BUA said it did not get a full waiver. The Head of Corporate Communications, Mr Otega Ogra denied being granted any special approval to export its products outside the country.

“As far as we are concerned, the borders remain closed,” he told Daily Trust.

He said the news going around that BUA also got special approval was an attempt by its competitor to drag it into the fray.

“BUA Cement does not have any blanket approval to export and the Nigerian borders remain closed.

“BUA Cement was granted a limited approval to export some cement to Niger Republic (which is 100 kilometres from our plant), and this was disclosed in our half-year results and presentations to the investing and the general public,” he said.

He further explained that BUA Cement located close to Niger was designed for at least 40 per cent export capacity and that explained why they applied for the specific waiver.

Discriminatory waiver will kill small businesses

Our correspondents report that the anger over the waiver granted to select companies transcends local and smaller entrepreneurs who were denied the opportunity to export or import commodities through the land borders.

Renowned figures in the Nigerian economy said the discriminatory policies were not good for the economy.

The President and founder of Anap Foundation, Atedo Peterside, in a series of tweets yesterday, decried the preferential treatment against small businesses.

“Allowing legitimate exporters and importers to move their goods across the border should be a no-brainer,” he said.

“Why refuse everybody else and allow only one company (Dangote)? This is why some of us argue that the Nigerian economy is rigged in favour of a handful of well-connected persons,” he tweeted.

In a follow-up tweet, Peterside who is the founder of Stanbic IBTC Bank, said: “I have since learnt that BUA Group were also allowed to export goods through Nigeria’s ‘closed’ land borders.

“The federal government should please accept that what is good for the goose is also good for the gander. When will the federal government consider small honest businesses that are not so well-connected?” he asked.

A former President of the Abuja Chamber of Commerce and Industry (ACCI), Mr Tony Ejinkeonye, said such discriminatory policies would not encourage businesses.

Ejinkeonye said there must always be a level playing ground for every business for maximum economic benefit.

“If for a particular reason the government wants to open the land borders for cement, it must apply to every cement producer in Nigeria and not just Dangote or BUA. It should be uniform,” he said.

The Director-General/Chief Executive Officer of the Association of Nigerian Exporters (ANE), Prince Joseph Idiong, said the federal government granting waivers to Dangote for business purposes was not a new thing.

The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, said a selective approach to policymaking and execution creates serious credibility problems for policymakers and the government.

According to him, a fair policy regime demands that there should be a level playing field in the policy and regulatory environment.

He pleaded that the land border be opened and institutional capacity strengthened for better compliance with the trade policy rules.

“Absence of a level playing field for economic players is detrimental to investors’ confidence and inimical to economic recovery aspirations of the government.  It also negates the principles and spirit of competition policy and competition law,” he said.

There’s presidential approval – Customs

When contacted to comment on the matter, the Public Relations Officer of the NCS, Deputy Comptroller Joseph Attah, said that the waiver was a presidential approval and not from Customs.

“Enquiries should not be directed to Customs,” he said.

There was no official comment from the presidency at the time of filing this report.

Also, attempts to get the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, to comment proved unsuccessful.

The minister’s Special Adviser Media, Mr Yunusa Tanko acknowledged receipt of a text message sent but did not comment on the matter.

Daily Trust reports that this is not the first time the federal government was issuing waivers to select companies this year.

In September, the NCS confirmed that four companies were given emergency approval by the Central Bank of Nigeria (CBN) to import 262,000 tonnes of maize.

The companies were Wacot Limited, Chi farms Limited, Crown Flour Mills Limited and Premier Feeds Company Limited.

Implication of border closure

The closure of the Nigerian land borders had pitched it against some of its neighbours like Togo, Benin and Ghana. It also affected the businesses of Niger, Cote D’Ivoire, Burkina Faso, Chad and Cameroon.

Many businessmen said the border closure had crippled their sources of livelihood occasioned by the rise in food prices as inflation reached 16.6 per cent last month.

Mohammed Nuhu, who used to export grains from the Shika Grain Market in Zaria, said his life has not been the same since the border closure.

“We often go with trailer loads of grains up to Burkina Faso but the closure has stalled our business. We are pushing to find a way to start using the seaports even though it is not convenient because the roads are closed,” he said.

Ali Joseph, a tannery and leather dealer shared similar pain. “From Kano, we export our hides and skin to the Niger Republic and Togo. When we are returning, we bring in textiles and sell. These have all crumbled.”

In Kishi, a border town in Oyo State, Hameed Olaleye said the situation had changed because residents could no longer take or bring in their good from the Benin Republic, which is less than two hours away.

“It is no longer business as usual. We used to import rice, clothing and other essentials through the Saki West route up to the Benin border but the border closure has frustrated us,” he said.

For Ibrahim Hassan, a member of Association of Motor Dealers of Nigeria (AMDON), Kaduna chapter, the closure destroyed the little of spare parts importation that was left after Customs had initially banned vehicle and rice import through the land border.

Cement costs over N3, 000

As big companies got waivers to export the commodity, the price of cement in Nigeria has risen above N3, 000 despite the availability of local producers and the natural resources.

A market survey by the Daily Trust in Abuja, Nasarawa, Kaduna and Niger State revealed that a 50-kilogramme bag of cement had risen from N2,600 retail price to N3,100.

Alhaji Musa Ibrahim, a cement dealer in Kaduna, said the fluctuations in the price of cement started from the onset of COVID-19 in March.

“The COVID-19 lockdown has affected the production of cement and therefore, transporting the commodity from any of the points of production is a big deal…That is part of the problem,” he said.

Another dealer at the building material market in Mararaba town of Nasarawa State, Ifeanyi Eze, said they could no longer bear the variation between the wholesale rate and the price at which they sell.

He said the wholesale package (600 bags), which used to be ₦1,500 has risen to over N2, 000 without the other costs including transportation from the production centres.

Mr Kehinde Olusola who is building a three-bedroom house in Nyanya town in Abuja said he was informed by his supplier that the recent petrol price to N160 contributed to the woes of cement suppliers.

“We don’t have a choice because it is an essential commodity.  We have to buy because we must build the house we will live with our family. The government should find a way of subsidising life for its citizens,” he said.

Mr Yusuf Bello, who is developing a property at Suleja’s popular Kaduna Road in Niger State, called on the government “to regulate prices to intervene. The hardship is enough, we want fairness,” he said.