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Rising Cement Prices in Nigeria: Government Intervention and Industry Challenges

The exorbitant prices of cement persist in the Nigerian market, with a 50kg bag commanding an average price of N12,000, despite the federal government's intervention and a warning of potential importation if manufacturers don't comply.
 
A recent market survey conducted by BusinessDay reveals that Dangote Cement retails at N12,500 per bag, while Lafarge ranges from N12,000 to N14,000. BUA, although relatively cheaper, still sells between N10,000 and N11,000 per bag.
 
Cement: Price at N12,000 defies FG’s intervention, important threat
 
Other brands like Ibeto Cement and United Cement Company of Nigeria Limited (UniCem) are priced at N10,000 and N11,000 respectively, with UniCem fluctuating between N12,000 and N14,000.
 
This pricing dilemma exacerbates the uncertainty in Nigeria's real estate sector, causing developers to halt projects and construction activities to slow down significantly.
 
In response, the federal government convened with major cement producers and stakeholders, agreeing to cap prices between N7,000 and N8,000, contingent upon the buyer's location and volume of purchase.
Despite Minister Ahmed Dangiwa's disbelief in the price hikes, cement manufacturers cited challenges such as high gas costs, steep import duties on spare parts, inadequate infrastructure, fluctuating forex rates, and cross-border smuggling.
 
Expressing dismay over the escalating costs, Minister Dangiwa emphasized the need for transparency from manufacturers, highlighting Nigeria's abundant raw materials for cement production.
 
Warning of potential importation if prices persist, the government acknowledges the detrimental impact on housing affordability and delivery.
 
Vincent Ogili, a civil engineer, echoes widespread confusion over the sudden price surge, attributing it to factors beyond mere gas costs. Ogili emphasizes Nigeria's dominant position in West Africa's cement industry and the pivotal role of infrastructure and real estate sectors in driving demand.
 
Ogili advocates for a revisit of the 2002 backward integration policy to address supply-demand imbalances and foster sustainable growth in Nigeria's cement sector.
Source: BusinessDay

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