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The price of cement in the Nigerian market has become a cause for concern as it remains outrageously high, despite efforts by the federal government to intervene. Currently, a 50kg bag of cement sells for an average of N12,000, with some brands even higher.
Dangote Cement sells for N12,500, Lafarge sells for between N12,000 and N14,000, and BUA brand sells for between N10,000 and N11,000 per bag.
This has had a significant impact on Nigeria’s real estate sector, particularly the housing sector. In response to the high prices, the federal government met with major cement producers and other stakeholders to address the issue. They agreed to peg the price of cement at N7,000 to N8,000, depending on the location and the buyer.
However, the manufacturers cited several challenges that contribute to the high prices, including the high cost of gas, high import duty on spare parts, poor road networks, high foreign exchange rates, and cement smuggling to neighboring nations. They emphasized that addressing these challenges is crucial for the price of cement to come down.
The Minister of Housing and Urban Development, Ahmed Dangiwa, expressed his concern over the high cost of building materials, especially cement, despite the abundance of raw materials in the country. He questioned the reasons for the incessant price hikes and urged the manufacturers to explain their justifications.
Dangiwa warned that if the manufacturers fail to bring down the prices, the government may consider opening the borders for cement importation.
The rising prices of cement have had a significant impact on housing delivery in Nigeria. Many Nigerians are perplexed by the sudden increase, as the price has almost doubled within a short period.
This has led to the suspension of construction projects and an increase in the prices of houses. Vincent Ogili, a civil engineer, expressed his confusion over the current scarcity and high price of cement, noting that the price of gas is not a sufficient reason for the price jump.
Nigeria’s cement industry is the largest in West Africa, with numerous registered companies and a significant production capacity. The demand for cement is driven by infrastructure projects, the private retail sector, and the real estate sector.
It may be necessary to revisit the 2002 backward integration policy in the cement industry to address the current challenges and ensure a stable supply of cement at affordable prices.
