Dangote Partners Kaduna, Kebbi States to Bid for Peugeot Nigeria

Aliko Dangote
Aliko Dangote

• Report: Nigeria is no longer Africa’s top investment destination

Zacheaus Somorin with agency report

Africa’s richest man, Alhaji Aliko Dangote, has partnered the Bank of Industry (BoI) and the Kaduna and Kebbi State Governments to acquire a majority stake in Peugeot Automobile Nigeria (PAN) Limited.

This disclosure was made by the Kaduna State Governor, Nasir el-Rufai, at the launch of the BoI Youth Empowerment Scheme (YES).

“We have submitted bids for the car maker … with Aliko Dangote on board together with BoI, Kebbi and Kaduna States… We are confident our bid will sail through,” reported Reuters on Thursday.

Peugeot is a joint venture between ASD Motors and the French automaker, with a long history in Nigeria, the anticipated hub of automotive assembling on the Africa continent.

El-Rufai said Kaduna and Kebbi, along with BoI and Dangote, had submitted bids for the stake which the Asset Management Corporation of Nigeria (AMCON) is looking to sell.

Peugeot Nigeria assembly plant located in Kaduna State has Peugeot Citroen PEUP.PA as its technical partner “with a capacity to assemble 240 cars a day”.

Though conceived in 1969, Peugeot found its roots in Nigeria only two years later, after winning a bid during the Yakubu Gowon-led government.

In November 2006, PAN was privatised in line with government’s agenda to build a stronger, more competitive and diversified economy.

ASD Motors emerged as the successful core investor and took over the management of the company in January 2007, with a 54.78 per cent stake, making Sani Dauda CEO of both ASD Motors and Peugeot Nigeria.

The expectation was that the privatisation of PAN would create a quantum leap in performance, but that has not happened, the company confirmed.

“Following the accumulation of huge non-performing loans (NPL) indebtedness to banks, in October 2012, the Asset Management Company of Nigeria (AMCON) acquired the debts of the company and converted a portion to equity to help restructure the firm,” Peugeot had said.

The planned acquisition is expected to revamp the presence of the company in Africa’s largest economy.

But as news of the bid for Peugeot Nigeria broke yesterday, a new report by Nielsen, a US-based global and information measurement company, showed that Africa’s largest economy was no longer the top investment destination on the continent. In its place, Cote d’Ivoire has risen to the top of the rankings.

According to Nielsen, Cote d’Ivoire has been buoyed by a fast growing economy and a lengthy period of political stability highlighted by successful elections last year to become the prime destination for investments in Africa.

However, that status could now be affected following a recent attack by Al Qaeda in the Islamic Mahgreb (AQIM).

Having been ranked as the top investment destination at the start of 2015, Nigeria has now fallen to fourth on the rankings in Africa.

The ominous slide fits the narrative of Nigeria’s slowing economic growth amid a global slump in commodity prices, the report said. Oil in particular, Nigeria’s main export and revenue source, has been badly hit.

According to the research firm, Nigeria’s slide was “driven primarily by deteriorating macro-economic indicators”. It also added that “consumer indicators and overall confidence levels” have also dipped.

A recent capital importation report by the National Bureau of Statistics (NBS) also confirmed the Nielsen report.

Last year, Nigeria’s recorded total inflow of capital into the economy stood at $9.6 billion —a 53 per cent drop from the previous year and the lowest recorded total since 2011.

While incidental economic factors have largely contributed to Nigeria’s floundering economy, the country’s government has also come in for criticism for not managing the crisis effectively.

President Muhammadu Buhari’s handling of the economy has been questioned with the Central Bank of Nigeria (CBN) instituting strict monetary controls in response to commodity prices and a currency slide.

These controls, which inevitably strained citizens and hardly had the desired effect, have been described as unorthodox.

As Buhari closes in on his first year in office, many Nigerians will be hoping that in his second year, the focus will be on triggering an economic rebound in Africa’s biggest economy following slowed growth.

  • oduduwa

    After this, the federal government under Buhari leadership will direct all MDAs to use peugeot as it’s official car brand as it is assembled in Nigeria. With the new drive to use made in Nigeria, Innoson motors could have been labelled official car at least to some MDAs but it is not owned or controlled by the North so it does not qualify even if it is mostly local.

    • McOgbuefi

      I was about to write exactly this. The government has turned blind eye to Innoson motors.

      • abdullahi

        Peugeot was one time the official car in Nigeria. Come to think of it and leave sentiment aside, why is it that the eastern governor can not make innoson car official or compel the state ministries to buy the car? You keep blaming the north for virtually everything in Nigeria as if the last president was not from south. Obasanjo was the first civilian president in third Republic and Jonathan ruled linger than Yaradua. So, don’t blame Buhari in he patronise car assembly in the north.

  • Artful ºDodger

    Nielsen report is a load of crap! The kind of investment Nigeria need are those that will also incorporate local contents into their activities. What the country has always had are armchair so called foreign investors who have only been in the country to take profits away. These class of investors import everything from their countries to sell in Nigeria thereby constituting a drain on our forex in the name of being foreign investors. They are useless to any growth and the development of their host countries. Cote de Ivoire can have them, Nigeria have no use for them from here on.

    With Dangote in the picture, Peugeot Nigeria will do well. Time was when Peugeot and Volkswagen were heavily patronized by the Nigeria government before the politicians came and took the jobs away to Japan. If Kebbi, Kaduna and the Dangote group can make Peugeot their official vehicles again, a few other states and patriotic Nigerians might follow. What the company also need is to set up showrooms in other African countries while Dangote can also make ¨made in Nigeria¨ Peugeot cars the official vehicles of his companies across Africa.

    • MIke Oke

      Wee you kipkwayett! Armchair illiterate economic analyst like you. Better go to Venezuela and join Chavez and Co with that your inane “economic” mindset. When better people are talking you will come and join mouth. Is not your fault it’s silly Nigerian voters who allowed you people climb the stage and start talking rubbish. We kept minds like yours under lock and key for 16 years. Now that you’re free from your cages you’re all running around forming experts. Come 2019 we will lock you people up for good and throw away the key. Itibolibo!

      • Artful ºDodger

        With how many states do you hope to do that? Your five miserable God forsaken hell hole igbo/biafra states of the SE?

        Igboman no use laff kill me.

        The last sixteen years must have been very glorious for you. Too bad you have never known and will never know any better. Sorry o!

    • amador kester

      Nice observation. The local content and patronization imperatives must factor heavily into the picture

  • Toby

    The two state governments will run it under.