BUA Cement Plc received a waiver from the government for the export of Cement to the Niger Republic via the Sokoto Border.
This was first disclosed in an earnings call held in July which provided investors with details on the second-quarter results of BUA Cement Plc. Nairametrics has also seen a letter from Customers approving the waiver.
Despite Closing the land borders for trade for over a year, Nigerian Cement companies were approved for land export to West Africa. In the document viewed by Nairametrics, BUA was also given the approval to export to Niger Republic. Dangote Cement announced on Monday that they have exported through land borders during an investors call.
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The Nigerian customs granted approval to BUA Cement to transport Cement to Niger Republic in June. Dangote Cement and BUA Cement are competitors in the cement manufacturing space and are first and second respectively in terms of cement production capacity in the country.
The Customs letter signed by a Zonal Coordinator read in part:
” I am directed to forward herewith a letter from the office of the National Security Adviser …dated 17th, June 2020 on the above subject matter. The trucks will exit and return through Illela Border Station in Sokoto State. You are to monitor the movement towards ensuring that they are loaded only with Cement to Niger Republic and return back to Nigeria”
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What you should know
Nairametrics reported in October 2019 that the Federal Government of Nigeria ordered the complete closure of the Nigerian border, placing a ban on both legitimate and illegitimate movement of goods in and out of the country.
Nairametrics also reported today that the Nigerian government has also given Dangote Cement the approval to export Cement to West African countries through Nigeria’s land borders, which have been closed for over a year.
This got the attention of other Businessmen including Atedo Peterside who said: “Allowing legitimate exporters & importers to move their goods across the border should be a no-brainer. Why refuse everybody else & 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 added.
Attached to the document where the details of the drivers and Truck license numbers.
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The larger picture
Granting waivers for export suggests the government is willing to open borders even if it is for export purposes rather than stick to a policy that has stifled trade since it was introduced late in 2019.
- Granting the cement manufacturers, a waiver, also suggest the government will consider granting the same to other smaller Nigerian firms who are export-oriented.
- Export-oriented manufacturers have suffered losses due to the government policy on land border closure and will see this as a window of opportunity to commence exports.
- The government should, however, issue a policy guideline, rather than approve exports on a piecemeal basis which will not favour smaller exporters with little or no government connections.
- This could also be a precursor to Nigeria’s implementation of the African Continental Free Trade Area (AFCFTA), which would require movement of goods across borders and a reduction of tariffs in trade through Africa’s borders.
Correction: An earlier version of this article erroneously said the information was first obtained in an earnings call by Dangote Cement. Rather, it was in an earnings call by BUA Cement held in July 2020.
Selective opening of the borders through a waiver system administered by poorly paid civil servants is a recipe for bottlenecks and corrupts practices in our trade system. It is disheartening that this is the solution that can be found to what led to the border closure in the first place – another corruption deepening process called waiver granting.