Leading Nigerian cement manufacturers have delineated specific government interventions required to lower prevailing cement costs to between N7,000-8,000 per 50kg bag nationally, according to Works Minister David Umahi.
Umahi convened an urgent meeting on Monday between federal officials and major cement producers Dangote, BUA and Lafarge in response to cement price spikes in parts of Nigeria reaching N15,000 per bag. Current market rates range from N8,500-9,200 per bag across most states.
While deeming current costs “abnormal” and detrimental to economic progress, Umahi acknowledged factors like smuggling, poor roads, elevated energy expenditures and forex instability that manufacturers cite for high prices.
Crucially, cement giants indicated readiness to improve affordability given appropriate government assistance in navigating enduring sector challenges. Hence the outlined N7,000-8,000 per bag target.
Actionable measures raised included curbing rampant smuggling from Benin Republic that hampers local profitability. Tighter border controls and enforcement on illegally imported products could alleviate this persistent issue.
Upgrading dilapidated road infrastructure was also cited as essential for facilitating cement distribution and reducing internal transport expenses that drive up retail rates. Facilitating access to foreign exchange for import-dependent production inputs likewise remains vital.
Additionally, cheap natural gas supply options and cost-efficient power sources would ease climbing energy bills that manufacturers currently pass through to consumers. Renewable energy investments merit consideration given Nigeria’s abundant solar and wind resources.
While stakeholders deemed current pricing unsustainable for average Nigerians aiming to build homes and small businesses, a collaborative path towards the N7-8k bag target has been mapped should the government address the above constraints.
A price monitoring mechanism involving cement producers will also provide ongoing transparency, ensuring consistency with new benchmarks amid local variability. Distributors flouting revised rates face sanctions.
In effect, the cement pricing debate has yielded constructive dialogue on shared objectives between public and private sector actors. But coordinated action on the enumerated policy and infrastructural fronts remains imperative for achieving tangible relief for citizens in the near-term.
Source Dangote, BUA, Others Give Conditions To Reduce Cement Prices In Nigeria published in Sahara reporters.