Nigerian Government Summons Dangote, BUA, Lafarge Over Rising Cement Prices
In an attempt to address and mitigate the steadily increasing prices of cement in Nigeria, the Ministry of Works has announced plans to thoroughly inspect and bridge the expanding gap between the ex-factory prices and market prices of cement. This comes amidst mounting concerns as the price per bag of cement has surged to between N8,000 and N10,000, marking a significant increase from the N4,000 price range experienced just a few weeks prior.
Such a price hike has raised alarms within governmental circles, especially considering the substantial demand for cement by road and housing contractors from the cement manufacturing sector. To tackle this issue head-on, prominent cement manufacturers including Dangote, BUA, and Lafarge have been summoned by the ministry.
The summoning, initiated by the Minister of Works, Dave Umahi, aims to delve into and rectify the difficulties faced by the cement manufacturing industry in the nation. A focal point of the meeting will be to closely examine the significant discrepancy observed between the ex-factory prices and the prices in the market, as indicated in a statement by Edward Uchenna Orji, the Special Adviser to the Minister on Media.
“Worried by the escalating cost of cement despite huge patronage by road and housing contractors to cement manufacturers, the Honourable Minister of Works, His Excellency Sen Engr Nweze David Umahi CON, has summoned an urgent meeting of all cement manufacturers in Nigeria,” Orji expressed. He further added, “It is common knowledge that the manufacturers have their challenges, which we shall look into, but from our findings, the disparity between ex-factory price and the market price is wide. We therefore need to look into the situation and other issues with a view to finding a common front.”
The cement industry in Nigeria is largely dominated by three key players: Dangote Cement Plc, BUA Group, and Lafarge Africa Plc, who collectively account for 99% of the cement production in the country.
Highlighting a related development, BUA Cement Plc had previously announced a reduction in cement prices last September, intending to lower the cost per bag from N5,500 to N3,500. This price cut was scheduled to be effective from October 2nd, 2023, and was aimed at spurring growth within the building materials and infrastructure sectors.
As the second-largest cement producer in Nigeria, BUA Cement’s decision was anticipated to exert pressure on other producers to implement similar price adjustments. However, with the specified date having passed, there have been growing concerns regarding the implementation of the announced price reduction.
The government’s intervention by summoning the major cement manufacturers for a meeting underscores the serious approach being taken to resolve the pricing issues that affect not only the construction sector but also the broader economy. By addressing these challenges, the Ministry of Works hopes to ensure that the cost of cement is reflective of a balanced and fair market, ultimately benefiting the consumer and supporting the growth of the construction industry in Nigeria.
