Kogi State Govt Shuts Down Dangote-Powered Cement Facility

The Kogi State government recently ordered the closure of the largest cement factory in Nigeria, Obajana, which is powered by Dangote Industries, after claims that the factory's acquisition was defective.

Following the closing of the factory, the Kogi State government released a report on Dangote Cement's acquisition of the Obajana Cement plant, concluding that the transfer of the factory to Dangote Industries Ltd. was "invalid, null, and void." Dr. (Mrs.) Folashade Ayoade revealed in a report that three of the Certificates of Occupancy for Obajana Cement Company Plc, which were at the time the sole property of the Kogi State government, were employed to get a loan from Dangote for NGN63bn (US$145.2m).

Ayoade added that the state government must act fast to revoke the seven current Certificates of Occupancy in Dangote Cement Company's name.

Dangote Cement Plc. commented that over claims of unpaid taxes and Kogi State Government's purported equity interest in the company, thugs and neighborhood vigilante groups from the State Government raided and sealed the Obajana Cement factory [last Wednesday]. Due to this development, these thugs and neighborhood vigilantes injured many members of the Dangote Cement team.

Dangote says that it is acting decisively to rectify the issue and that Dangote Cement Plc is continuing to uphold its commitments as a compliant corporate entity.

This move by the Kogi State government comes at a time when the African continent is moving quickly to establish the "AFCFTA," or Free Trade Agreement Area, intended to promote industrialization, trade, and growth, according to Nairametrics.

An unpleasant event in Nigeria's political history is the plant's forced closure, which has resulted in the loss of jobs for young people, income for the Kogi State administration, and infrastructure for the populace.

Despite the Kogi State Government's invasion of Dangote Cement Plc's Obajana Cement facility, the stock price of the company has not altered.

The company's share price, which began trading at N245.00 and had a market capitalization of N4.175 trillion on Wednesday, before the invasion, ended at the same price and value on Friday, October 7, 2022.

Operators in the Organized Private Sector (OPS) operating under the auspices of the National Association of Chambers of Commerce, Industries, Mines, and Agriculture (NACCIMA) have openly denounced the invasion that is believed to have led to the killing of many employees of the Dangote cement plant in Obajana by the state's security unit.

NACCIMA expressed concern that the company should not have been sealed because of a tax issue that might have been settled amicably.

 

The organization demanded that the facility be immediately reopened in order to restart routine manufacturing activities in a statement signed by its director-general, Olusola Obadimu, who said that the Kogi state government should have taken a more cautious approach.

According to Obadimu, NACCIMA's stance was based on several important factors relating to the effects of the plant's shutdown on the economy and the thousands of individuals whose means of subsistence depend on its operations.

The Manufacturers Association of Nigeria (MAN) has also denounced the Kogi State Vigilante Service's (KSV) invasion of the Dangote Cement Plant on Wednesday, claiming that the move will deter fresh investments in the region. "It is unimaginable that a state government would take such drastic action to shut down a plant that provides job opportunities and economic activities on a huge scale for the people of Kogi State," said the MAN President Mansur Ahmed.  This also means that a lot of Dangote employees will be out of work.