For the completeness of my update here where I noted that the Nigerian government gave Dangote Cement special waivers to export cement via land borders, when other legitimate businesses in Nigeria were blocked, I have to update that BUA Cement received some favours also. We are yet to read from Lafarge and Ibeto Cement if the goodies were extended to them. If I get any note, I will update the community.
. Like I mentioned earlier, we were given a one-off thing for a limited quantity which we
exhausted in June. But we are optimistic it’s going to continue during Q3 through the land
border of Illela from Sokoto State into the Niger Republic. Mr Chike can you respond on
IMPORTANT: 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 100kms from our plant), and this was disclosed in our half year results and…1/2
— BUA Group (@BUAgroup) November 10, 2020
According to Nairametrics, the waiver has been running for months. It seems the whole land border closure thing was designed to distort market equilibrium for some big men to become bigger. As I have noted here, there is no fundamental economic theory that supports the government’s restriction of EXPORT from Nigeria to its neighbors, since some of these countries are indeed open to import from Nigeria, even if we block their exports. In other words, nothing has stopped the government to allow exports from Nigeria even when blocking imports. You may argue reciprocity principle but that is not the case, as some of these countries have made the same requests: allow us to buy from Nigeria, at least. With an asymmetric impact, looking at the size of Nigeria’s economy to its neighbors, we simply decided to economically disarm regionally. Of course, countries like Morocco have stepped up to fill the void.
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”
What has happened here is simple: Nigeria does not win on market forces, and expecting global investors to come and invest without those political connections will keep getting harder. And as we do those things, we will keep losing the nation, economically.
I like this summary from Nairametrics: “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.” I think it should not be hard for Mr. President and his team to do – treat all Nigerian companies the same.