The ‘Privileged Three’

• The symptom is the “waiver” reportedly granted Dangote Cement and co. But the real disease is the unsustainable long border closure

Editorial

Another needless controversy has broken out, on the  propriety or otherwise of granting a handful of companies special waivers to export via land borders, while such “privileges” are unavailable to other ‘hoi-poloi’ players, with tad no connection in high policy quarters.

It all started with a tweet critique, by Atedo Peterside, famed investment banker, and the anger of his fusillade appeared trained at Dangote Cement, which the tweet appeared to paint as unfazed prince of Nigeria’s crony capitalism!

But Peterside was honest enough to follow up with further tweets, clarifying that Dangote Cement was not the only privileged party; and that BUA Cement was also extended a similar courtesy. Still, in Peterside’s tweets, a case of peer envy was established — and why not? Isn’t what is sauce for the goose also sauce for the gander?  Even established peer envy can’t vitiate the fundamental soundness of that equal-opportunity crusade.

Meanwhile, BUA appeared pissed enough to out with own tweet, claiming the privilege it got was no blank cheque — some open sesame to continue land exports, even when others are barred — but some emergency export, a scant 100 kilometres away into one of Nigeria’s northern neighbours, a fact which, it added, it promptly disclosed and reflected in its yearly report.

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

Even Dangote Cement, perhaps to fend off further Dangote-bashing, insisted the bulk of its exports remained by sea, despite those occasional export-by-land concessions. Referring to the original document that sparked the Peterside tweets – Bloomberg, quoting Michael Pucherous, Dangote Cement CEO, in a presentation during an investor call – Dangote insisted the Pucherous  presentation stressed Dangote’s major export thrusts were still by sea.

Dangote, it says, exports cement to West and Central Africa through its export terminals at the Apapa Ports in Lagos, where it exported six vessels of clinker in the third quarter of 2020; and is trying to commission similar export infrastructure, at the Port Harcourt Ports, to feed the Central Africa market, before 2020 runs out.

To further clarify the controversy, Joseph Attah, Nigeria Customs Service (NCS) spokesperson, confirmed the land export concession benefited Dangote, BUA and an unnamed gas company.

“The Presidency, in its magnanimity,” Attah volunteered, “has approved the exemption of three companies, Dangote Cement, BUA and a gas supply firm from its border closure restrictions due to the need for what they export to other countries. So, as of now, these companies have been exempted.”

But that exemption is the problem, without criminalising legit trade by Dangote and co, even if preferential concessions, which other legitimate players can’t plug into, will continue to rile the market — and fairly and legitimately so.

To be sure, the Federal Government had its reasons to shut the land borders. The main thrust was to fend off smuggled rice, via Cotonou ports in Benin Republic, which was hurting the administration’s policy of local rice sufficiency, under the general ambit of food security; and the putative empowerment of agro-allied industries to provide sustainable jobs, power the economy and fight mass poverty.

Even then, it was obvious, from the beginning, that border closure could not be economic policy. At any rate, it wasn’t sustainable — after the very short run as a shock therapy, which Benin Republic rather richly needed.

Besides, the long closure had hurt trade relations between Nigeria and close neighbours, with the recalcitrant Beninois resorting to populist (if cynical) begging; and Ghana, ever so petulant, taking it out on Nigerians in their country, with a crushing and punitive market-entry tax. All these adversarial responses support a review of the border closure, without Nigeria necessarily letting go of its national economic interest.

But adversaries aside, if the big players could earn concessions to land export, the chances are the same pulls that make such preferences possible — nay, urgent — also hold true for the general trading mass — big, medium, small or even micro. That makes an additional case to re-open the borders, subject to putting in place sound checks and balances, to forestall free-wheeling smuggling.

It’s simply bad optics: turning a general trading right into privilege for a few. Beyond optics, it’s simply not fair. From market competition, it’s not even good for the beneficiaries, for they get demonised for doing honest and legitimate work.

So, let the government continue shutting the borders, if it must — but with no exemptions to anyone. Or better, and this we recommend: let it throw them open to every legitimate player. Exemptions for an infinitesimal few cannot stand the scrutiny of fairness, no matter how good the intention behind it all.