Despite the intervention by the federal government and a looming threat to open doors for cement importation if manufacturers do not reduce their prices, the price of cement in the Nigerian market remains stubbornly high at an average of N12,000 for a 50kg bag.
A recent market survey conducted by BusinessDay reveals that major cement brands are still maintaining high prices. Dangote Cement is selling for N12,500 per bag, Lafarge for between N12,000 and N14,000, and BUA Cement, though considered the cheapest, is priced between N10,000 and N11,000 per bag. Other brands like Ibeto Cement and United Cement Company of Nigeria Limited (UniCem) are also selling for between N10,000 and N14,000.
This persistent high pricing is causing uncertainty and distress in Nigeria’s real estate sector, particularly in housing development, where many projects have been abandoned, and construction activities have slowed down significantly.
In response to the escalating prices, the federal government convened meetings with major cement producers and stakeholders, urging them to peg the price of cement between N7,000 and N8,000. However, manufacturers cited challenges such as the high cost of gas, high import duty on spare parts, poor road networks, high foreign exchange rates, and cement smuggling to neighboring countries as reasons for the high prices. They maintained that addressing these challenges was essential to lowering the price of cement.
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Minister of Housing and Urban Development, Ahmed Dangiwa, expressed dismay at the continuous increase in cement prices despite the abundance of raw materials in the country. He questioned the rationale behind the price hikes, emphasizing that cement producers source their raw materials locally, making the high prices unjustifiable.
Dangiwa warned that if manufacturers fail to reduce prices, the government might resort to opening the borders for cement importation. He highlighted the adverse effects of high cement prices on housing delivery, as increased material costs ultimately lead to higher house prices.
Many Nigerians, including civil engineers and industry experts, are puzzled by the sudden surge in cement prices. Vincent Ogili, a civil engineer, expressed bewilderment at the price jump, noting that Nigeria has the largest cement industry in West Africa and sufficient production capacity to meet demand.
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Ogili suggested revisiting the 2002 backward integration policy in the cement industry to address the supply-demand gap and stabilize prices. He emphasized the need for collaborative efforts between the government and stakeholders to ensure affordable cement prices and support infrastructure development and real estate projects across the country.
