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Cement: Higher Revenue, Lower Profits
The top three cement companies in Nigeria—Dangote, BUA and Lafarge recorded a revenue increase in 2023 compared to 2022.
This is shown in their audited financial statements published on the Nigerian Exchange Group.
Dangote Cement increased its revenue from N1.2 trillion in 2022 to N1.3 trillion in 2023.
BUA also increased its revenue from N361 billion to N460 billion within the period, and Larfarge’s moved from N341 billion to N372 billion.
Aside from Dangote Cement, which recorded an increase in its profit after tax, BUA and Lafarge Cement recorded a decline in their profits after tax.
In the last 12 months, BUA Cement’s profit after tax dipped from N101 billion to 69.5 billion. Likewise, Lafarge Cement saw a decline in its profit after tax, from 55 billion in 2022 to 48.1 billion in 2023.
Meanwhile, for Dangote Cement, its profit after tax increased by 19.2% from N382 billion to N455 billion.
In his comments on the recorded decline in the profit after tax of BUA Cement, the CEO, Yusuf Binji, blamed the forex challenges in the country for the firm’s challenges.
Binji told the Punch, “Clearly, the operating environment in 2023 was challenging, given the different headwinds confronted with at the start of the year and especially with the devaluation of the naira.”
Back to Smugglers
The Federal Government has directed the Nigeria Customs Service (NCS) to return food items seized as they were being smuggled out of the country to the “owners”.
The owners?
These food items will be returned to the owners on the condition that they are sold in Nigerian markets, Premium Times reported.
It is presumed that the smuggled items are among those listed in the Export Prohibition Act.
The government chose a pragmatic trade-off between earning revenue from the seizures and alleviating poverty.
Data showed the government earned N13.6 trillion in revenues from such seizures in 10 years, from 2013 through 2022.
However, the government stated that the decision is one of its efforts to boost food sufficiency in the country.
This may temporarily increase the food supply in Nigerian markets and alleviate pressure on food prices, especially as the country grapples with unprecedented food inflation.
Prior to this, the Nigeria Customs Service, in February 2024, announced a similar plan to dispose of some seized food items in its custody to Nigerians at a price below the market price.
Believe in Smugglers
Does the government trust the smugglers to help tackle food insecurity? Would smugglers do a better job at selling cheap than the customs servicemen?
How would the officers who seized the goods feel when they are compelled to return the exhibits to the criminals?
Or does the end simply justify the means?
In response to the government’s directive, a legal practitioner, Kazeem Oyinwola, in an interview with Premium Times, stated that “the President may be right to issue a directive for the release of the goods/food items seized by the custom on the condition that such goods be sold at the Nigerian market to cushion the effect of the current food crisis if he believes or it is evident that in doing so, it will be in line with the fundamental objective and directive principles of state policy.”
Whichever way one views this, it appears the government prioritises food supply, over the moral considerations of where and from whom it’s coming.