Senate calls for transparency in Lafarge cement sale
The Senate on Thursday called for transparency in the ongoing negotiations to sell Lafarge Cement Plc to Chinese investors.
The Red Chamber specifically directed the Bureau of Public Enterprises to ensure that the ‘divestment process prioritises national security and economic sovereignty.’
The resolution was passed following a motion moved by Senator Salisu Afolabi (Ogun-Central), who told fellow lawmakers that the firm located in Ewekoro Local Government Area of Ogun State had been useful in ‘job creation, infrastructural development and industrial expansion in Nigeria, making it a critical national asset.”
The lawmaker argued that selling off such a key asset raised a series of questions, including local content in ownership structure, national security, and the opening of the process to allow for fair participation.
The motion partly reads, “The Senate observes that there are ongoing plans for divestment of the company, reportedly involving Chinese investors, which has raised concerns about the potential for foreign dominance over such a strategic sector in the Nigerian economy;
“(We) also observe that Holeim AG is set to sell its 83.8 per cent stake in Lafarge Africa to a Chinese cement maker, Huaxin Cement Co., in a deal that values Lafarge Africa at $1 billion, a deal which is set to be finalised in 2025, subject to regulatory approval.
“Aware that the cement manufacturing industry is a critical sector directly linked to national security due to its significance in infrastructure development, including the construction of roads, bridges, housing, and other vital public works.”
The Senate also said it was aware that the dominance of foreign ownership in such a sensitive sector poses risks to Nigeria’s economic sovereignty and national security interests.
It also raised concerns that several local investors and stakeholders have expressed interest in participating in the divestment process, but have raised concerns about transparency and their limited access to equitable shares.
The motion raises more concerns about the ‘long-term economic implications of foreign-dominated ownership of Lafarge Cement Plc, including capital flight, job losses, and potential challenges to regulating the activities of foreign-owned entities in strategic sectors.’
However, some senators initially opposed the motion on the grounds that in a free market system, any investor who met the transaction requirements could aspire to put their money in the factory.
One of those in favour of such an argument was Senator Jimoh Ibrahim, who warned against using the Senate as a clog in the Federal Government’s plans to open the economy to foreign investments.
According to him, investors should not be made to fear that they risk having their funds trapped whenever they intend to pull out by divesting their interests.
Senator Sunday Karimi took a similar position, cautioning the Senate against passing any resolution halting the sale of the cement firm.
The motion eventually passed, following the intervention of the Senate President, Godswill Akpabio, who observed that the main focus was transparency in the transaction, not an outright stop of the process.
After passing the motion, the Senate mandated its Committees on Capital Markets, Trade and Investment to monitor the transaction and ensure compliance with the Red Chamber’s resolution.
