Cement manufacturers in Nigeria have reneged on their promise to the federal government to reduce the price of cement, a major component of the building and construction industries.
In February 2024, after cement hit ₦15,000 per 50 kg bag in some parts of the country, manufacturers rose from a meeting with officials of the federal government in Abuja with a promise to reduce the price.
The decision was reached at a meeting convened by the Minister of Works, Engr David Umahi. According to the minister, manufacturers listed bad roads, high energy costs, Forex crisis as some of the factors responsible for the hike.
At the meeting, the manufacturers agreed to crash the price of the product from N10,000 to between N7,000 and N8,000 per 50kg provided the Federal Government addressed their challenges.
However, despite assurances by the manufacturers to make concessions the price of cement did not sell for less than ₦9,000 per bag.
Some major marketers told The Authority that Dangote Cement, which controls over 61% of the market share, on Friday raised the price of cement by ₦400 per bag. Consequently, a bag of cement which major dealers in Abuja used to sell for ₦9000 per bag now sells for between ₦9,400 and ₦9,600.
As a result, other cement manufacturers like BUA Cement, which controls slightly above 20% of the market share, and Lafarge Africa, which controls about 18 % of the market share, have also Increased their prices.
Industry experts expressed surprise at the recent hike in the price of cement, accusing the manufacturers of bad faith. One of them told The Authority that it was wrong for cement manufacturers to hike the price of the product after the federal government had addressed most of the challenges they raised in February 2024.
He listed some of the challenges addressed by the federal government as “improved roads and firming up the Naira against the US dollar.”
The latest hike in the price of ccement has had a toll on the price of sandcrete blocks, the major building material in Nigeria. Several developers have also seized the opportunity to increase the price of their property.
It is not clear why cement manufacturers hiked the price of the product at this time. Usually, the price of cement rises during the dry season, but drops as the rains set begin.
Building engineers, however, worry that the hike in the price of cement would greatly affect the profit margin of contractors currently handling projects across the country.
“Imagine a company that bid for and won a construction contract in December to, say, build a bridge or even a mall. At the time of the contract, cement was ₦9,000 per bag, and he needed to buy, say, 10,000 bags. With the ₦400 increase per bag, the contractor has lost ₦4 million without lifting a finger. This is serious,” lamented one building engineer who didn’t want to be named.
Attempts to get the Chief Corporate Communications Officer, Dangote Group, Mr. Anthony Chiejina react to the hike in price were unsuccessful, as he didn’t respond to calls, text and WhatsApp messages.
