Protests in Kogi over Obajana Cement Plant as FG intervenes

SOME youths on Wednesday in Lokoja, the Kogi State capital, staged a protest over the contentious acquisition of the Obajana Cement Plant (OCP) by Dangote Industries Limited (DIL) in 2002.

A similar protest took place in Abuja on Tuesday, when a group identified as Mass Action Against Corruption, accused DIL of exploiting the state and “fraudulently” acquiring the Obajana Cement Plant without any proof of payment.

Leader of the protest on Wednesday, Ibrahim Isiaka, said there were available documents indicating that the cement factory belonged to the State Government, and called for the Federal Government’s intervention.

“One thing is sacrosanct, we have all legal document that shows that Kogi State owns the cement factory in Obajana and not Dangote. Documents are rolling out on social media on the reason why Dangote should give up the property for the Kogi people,” he said.

Obajana Cement Plant was one of the most critical components of economic activities in the country, being one of the highest taxpayers, as well as one of the largest companies invested in by thousands of Nigerian and foreign investors.

A 10-member technical committee on the evaluation of the legality of Dangote Cement’s acquisition, headed by the Secretary to the State Government (SSG), Folashade Ayoade, has also stated that the purported transfer of the facility to Dangote Cement was “improper”.

The committee’s report seen by The ICIR, also alleged there is “no evidence” that Dangote Cement paid any amount of money to the Kogi government for the ownership transfer of the facility, nor has the company paid any dividend or profit realised from the cement plant to the state government since inception.

“By the assignment of the three certificates of occupancy, the title in Obajana Cement Company Plc still vests in Kogi State as the sole owner. The three title documents were used to obtain a loan of sixty-three billion naira only. (N63,000,000,000. 00) to finance the construction of the cement plant in Obajana,” the report stated.

It added that the right over the mineral sites belongs to the state government and that there is “no evidence” the state relinquished it to the company.

Meanwhile, DIL has denied any wrongdoing, insisting its acquisition of the Obajana Cement facility in 2002 followed due process and that it had 100 per cent equity shareholding in the company.

Group Head Branding and Communications, DIL, Anthony Chiejina, in a statement titled, ‘Obajana Cement Plant: Separating Facts from Fiction,’ said the land on which the Obajana Cement Plant seats was acquired solely by DIL in 2003, well after it had acquired the shares in Obajana Cement Company in 2002.

“DIL was issued three Certificates of Occupancy in its name after payment of necessary fees and compensation to landowners. The plant and machinery were conceived, designed, procured, built, and paid for solely by DIL, again, well after it acquired the shares in Obajana Cement Company.

“The limestone and other minerals used by the Obajana Cement Plant, by the provisions of the Nigerian Constitution belonged to the Federation, with authority only in the FGN and not the state in which the minerals are situated, to grant licences to extract and mine the resources. After the agreement with the KSG, DIL applied for and obtained mining leases over the said limestone from FGN, at its cost and has complied with the terms of the leases since inception,” Chiejina said.

The statement further stressed that the government of Kogi had no assets or minerals to give, and only invited DIL to come into the state and invest in a manner that will create employment, develop the state, and earn it taxes.

It said that according to the agreement between Dangote and Kogi government, DIL was to establish a cement plant with a capacity of 3,500,000 metric tonnes per annum, source for all the funds required to develop the cement plant and retain 100 per cent of its shareholding.

However, it said the agreement allowed the Kogi State Government to acquire five per cent equity shareholding in the Obajana Cement Plant within five years; while granting tax relief and exemption from levies and other charges to DIL for a period of seven years from the date of commencement of production.

The ownership tussle between the Kogi State Government and the DIL has resulted in threats and a total shutdown of operations at the factory. The Kogi State House of Assembly complex was also mysteriously burnt down on Monday by yet-to-be-identified hoodlums and a probe has been launched.

In the meantime, the Federal Government has waded into the dispute over fears it was capable of eroding investors’ confidence in the Nigerian economy. There are also concerns that the development could undermine efforts being made by the Federal Government to promote ease of doing business in Nigeria.




    Minister of Industry, Trade and Investment Niyi Adebayo, while addressing journalists said there was a need to follow laid down procedures for the resolution of disputes in accordance with the law instead of resorting to self-help.

    “The view of the Federal Ministry of Industry, Trade and Investment (FMITI) is basically that if there is a dispute between a state government and any industry within the state, we have the courts of law to deal with the issue. We believe that it is very wrong for the state governments to take laws into their own hands to address such situations. The courts are there.

    “I understand that there is an original agreement between the state government and the Dangote Industries that called for arbitration in the event of a dispute. I believe that all these legal steps should have been taken rather than a state government taking the laws into its own hands. It does not portray Nigeria in good light for sub-nationals to be creating problems for people who have invested money in Nigeria,” the minister said.

    The disruption of operations at the cement plant has caused a loss of revenue not only to the company and its customers but also adversely impacted revenue due to both the federal and state governments.

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