By Benson Daniel
Nigerians are paying significantly more for cement than consumers in several other African countries, despite Nigeria’s substantial limestone deposits and large installed production capacity, the Federal Competition and Consumer Protection Commission has said.
The commission disclosed that its preliminary findings from a three month industry wide investigation had raised concerns over possible manipulation of cement prices in the Nigerian market.
The investigation was conducted by the commission’s Anticompetitive Practices Department following widespread complaints over the persistent increase in cement prices. It compared Nigeria’s cement market with those of Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo.
According to the commission, the study examined factors including limestone availability, population, production capacity, domestic consumption and retail prices.
The findings showed that the price of cement in Nigeria remains considerably higher than in several of the countries examined. The development has raised questions about why the country’s strong production capacity and access to raw materials have not translated into lower prices for consumers.
Nigeria has an installed cement production capacity estimated at between 60 million and 65 million metric tonnes annually, while domestic consumption is estimated at about 25 million to 30 million tonnes. This indicates that the country has considerable excess capacity and also exports cement and clinker to neighbouring markets.
Despite this capacity, the retail price of a 50 kilogramme bag of cement has climbed to about N15,000 in some parts of the country, putting additional pressure on construction companies, developers and households.
The FCCPC said the price disparity warranted further scrutiny, particularly because a market with substantial excess production capacity would ordinarily be expected to experience stronger competitive pressure on prices.
Cement producers and other industry stakeholders have previously pointed to several factors behind the high cost of the product, including elevated energy expenses, naira depreciation, imported machinery and spare parts, transportation costs and other logistics challenges.
However, the commission said it was testing those explanations against verified information on production costs, capacity utilisation, pricing practices and broader market conditions before reaching a final conclusion.
The investigation also found that the Nigerian cement industry is highly concentrated, with three major companies accounting for more than 90 per cent of the country’s installed production capacity, according to publicly available estimates.
The FCCPC said major manufacturers had cooperated with its investigation by providing access to relevant records, with the exception of one company.
The commission stressed that its findings were preliminary and that the investigation remained ongoing. It said any conclusion on possible violations of competition laws would be based on further examination of available evidence.
The development comes amid growing concern over the impact of cement prices on Nigeria’s housing and infrastructure sectors. Rising cement costs have increased construction expenses, making it more difficult for households to build homes and for contractors to deliver projects within previously established budgets.
The commission said it would continue its investigation and examine whether current pricing patterns were consistent with competitive market conditions.
The outcome could have significant implications for manufacturers, distributors and consumers, particularly if the investigation establishes evidence of anti competitive conduct in the cement market.
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