(Ecofin Agency) – Nigerian President Muhammadu Buhari granted since July 2020, authorization to several Nigerian companies, including the Dangote Cement Group, allowing them to cross land borders to export their products to Niger and Togo.
Nigeria closed its borders with its ECOWAS neighbors for more than a year, making sales outside the country difficult for Nigerian companies. This new decision by the Nigerian federal government could boost pan-African sales for the cement group listed on the Lagos Stock Exchange. Over the period under review, Dangote Cement’s sales across the continent reached 87 billion naira ($228.3 million), up 20% compared to the third quarter of 2019.
The group’s pan-African activities are important not only in terms of income diversification, but also they represent a source of foreign exchange. Sales, particularly in WAEMU countries, give it access to the CFA franc, which unlike the naira has a fixed rate with the euro. In these times marked by Covid-19, the Nigerian currency is volatile with limited possibilities of international transfers.
In the first 9 months of 2020, the operating result of the Dangote group’s pan-African activities was 24.3 billion naira ($63.8 million), up 440% YoY. But it should be noted that the net result remained negative at -61.8 billion naira, slightly less than the loss of 65 billion naira conceded over the first 9 months of 2019.
Overall, the first 9 months of 2020 were quite solid for the Dangote Cement group. Consolidated net income for the period is reported at 208.6 billion naira ($547.8 million), 35.3% higher than the same period in 2019.
The group also doubled its cash position from 70.2 billion naira in September 2019 to 162.8 billion naira in the same period in 2020, thanks to the increase in its net profit but also to a reduction in capital expenditure.