The Senate also said Nigerians' interest in the process should be allowed to participate without any hindrance.
Nigerian senators on Thursday debated the proposed sale of the country's third-largest cement producer to a Chinese firm.
After the debate, the Senate directed the Bureau of Public Enterprises (BPE) and the Securities and Exchange Commission (SEC) to oversee the sale of Lafarge Africa Plc to ensure it aligns with national security and economic interests.
The upper chamber also mandated its Committee on Capital Market to liaise with government agencies in the sale process to ensure that it is transparent.
The resolution followed a motion sponsored by Shuaib Salisu (APC, Ogun Central) during the plenary, amid concerns over foreign dominance in Nigeria's cement industry.
The motion led to an intense debate on the Senate floor, with some senators urging the upper chamber not to be seen hindering a legitimate private transaction and, thus, foreign investment. The majority, however, wanted the government to monitor the sale and if necessary, intervene in it.
Concerns on Lafarge
Lafarge Africa, a leading player in Nigeria's cement industry, is a subsidiary of Holcim AG, a multinational building materials giant. It is listed on the Nigerian Stock Exchange.
Holcim AG is reportedly finalising plans to sell its 83.8 per cent stake in Lafarge Africa to China's Huaxin Cement Co. in a $1 billion deal, expected to be completed in 2025, subject to regulatory approvals.
Lafarge is Nigeria's third-largest cement manufacturer by market capitalisation behind only Dangote Cement and BUA Cement. Lafarge's market capitalisation as of 26 March is N1.19 trillion, behind Dangote, N7.24 trillion, and BUA, N2.55 trillion.
Lafarge Africa has many factories in Nigeria with cement operations in the South-west (Ewekoro and Sagamu in Ogun State), North-east (Ashaka, in Gombe State), and South-east (Mfamosing, Cross Rivers State). It also has Ready-Mix operations in Lagos, Abuja and Port Harcourt. Lafarge Africa has a current installed cement production capacity of 10.5 metric tonnes per annum.
The motion
Mr Salisu, while presenting his motion, expressed concerns about the implications of such a deal.
He warned that foreign ownership in critical industries could undermine Nigeria's economic sovereignty.
The senator also alleged that the divestment process lacked transparency, with some Nigerian investors reportedly unable to participate in the bidding.
"The dominance of foreign ownership in such a sensitive sector poses risks to Nigeria's economic sovereignty and national security interests.
"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," he said.
Mr Salisu, therefore, urged the Senate to encourage the federal government to intervene in the divestment process to ensure transparency in the process and allow Nigerians' interested in the process to participate without any hindrance.
Debate and Senate resolution
During the debate, Solomon Olamilekan (APC, Ogun West) who seconded the motion, emphasised the need for openness in the transaction.
"The divestment has been in secrecy. We want a transparent situation where every Nigerian will be given opportunities in the sale of the company. By the time the eventual sale of the company is done, we will be fully satisfied that we have done the right thing," he said.
However, Jimoh Ibrahim (APC, Ondo South) had a different view. He warned against unnecessary interference in business transactions, urging the Senate not to act as a barrier to free trade.
"We must be guided as a Senate. We cannot convert this Senate to a sales Senate. Agencies of government have been established by law and we cannot sit as a Senate to judge them in commercial transactions.
"The Senate should converge to see to the sanctity of companies not to be an impediment. There must be a right of free sales and the Senate cannot be an impediment to free transactions. We're not a transactional Senate, this is a lawmaking Senate."
Similarly, Binos Yaroe (PDP, Adamawa Central) urged the Senate to take caution before making a resolution.
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He stressed that the sale of companies is a normal business practice and that unnecessary restrictions could discourage foreign investors.
"This company is a public company listed on the Nigerian Stock Exchange with stakeholders. It has changed whole ownership and companies will continue to revolve. Shareholders will exit and the company will find another company to take over. I want us to be cautious about not giving the impression that we're hampering foreign investors," Mr Yaroe said.
Despite these objections, the majority of senators supported the motion when it was put to a voice vote.
After approving the motion, the Senate President, Godswill Akpabio, emphasised the need for transparency and acknowledged that divestment of a company is legal.
"What we have said is that if you want to sell, you can sell but make the process transparent and ensure local content and national security. The process must be transparent particularly when they're legal investors. They should be given the opportunity," Mr Akpabio said.
