Dangote Cement Shareholders Jittery Over Rice Smuggling Report?

Dangote Cement stocks
Image Credit: Bloomberg

By Dipo Olowookere

To say the past few days have been very challenging for Africa’s richest man, according to Forbes, Mr Aliko Dangote, is stating the obvious.

This is because a notable global business news platform, Bloomberg, reported that the man is being favoured by the Nigerian government to make his businesses grow bigger than others.

It was said that while the authorities shut down the land borders in Nigeria, making it impossible for genuine business owners to import or export their products, Mr Dangote was given the permission to use the same borders to transport its cement products.

Mr Dangote is the Chairman of Dangote Cement, a company listed on the Nigerian Stock Exchange (NSE).

The report by Bloomberg forced a respected businessman in Nigeria, Mr Atedo Peterside, to question why the federal government will allow Mr Dangote to use the land borders and others prevented from using them, arguing that the nation’s economy has been rigged to favour the Kano businessman, who aims to buy a football club, Arsenal FC of England.

The reactions that trailed Mr Peterside’s outburst on social media made the management of Dangote Group to quickly issue a statement to the media, claiming that its competitor, BUA Group, also enjoyed the waiver with a gas firm.

Not too long after, a report by E-Nigeria alleged that Dangote Cement trucks were used to smuggle foreign rice into the country, a claim Business Post could not independently verify.

But in the report, the Head of Corporate Communications at Dangote Group, Mr Anthony Chiejina, when asked if he was aware that Dangote trucks were allegedly used for smuggling a large quantity of foreign rice into the country, was quoted as saying that “well, you know [a] majority of these drivers cannot be trusted, sometimes they engage in illegal activities but I can assure you that we know nothing about it.”

The story, which was published last Friday, trended on Twitter, a popular social media platform and this was because the land borders were shut in August 2019 because of smuggling of rice, frozen foods, weapons and others into the country, according to the federal government.

The negative news items about Dangote in the past few days may have triggered the panic button in investors, who on Monday, treated shares of Dangote Cement with caution.

At the market, shares of the cement giant closed flat at N200 per unit and on Tuesday, the equities depreciated by N12.90 or 6.45 per cent to N187.10 per unit.

From the mood of the market, investors are still careful about the company’s stocks, watching how the management will tackle the issues.

Dangote Cement is one of the bellwethers of the stock exchange because when it coughs, the market feels the impact. It is among the most capitalised firms on the bourse.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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