Nigerians Groan as Cement Price Skyrockets to N6,500 Per Bag Amid Forex Woes, Inflation

Nigerians Groan as Cement Price Skyrockets to N6,500 Per Bag Amid Forex Woes, Inflation

  • Nigerians are currently lamenting the way cement prices across brands and markets have hiked in recent times
  • The latest hikes in the cost of each bag of cement have also significantly affected the pricing of concrete blocks
  • Stakeholders have appealed to the FG to intervene by issuing additional licenses to industrialists for cement production

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

Just over two months, there has been a significant surge in the retail price of cement in Nigeria.

Formerly N5,000 per bag in December 2023, the cost has escalated to N6,500 in different parts of the country.

Cement prices in Nigeria
The recent spike in the price of the product has generated serious concern amongst stakeholders. Photo credit - Trumpet Nigeria, Reuters
Source: UGC

Investigations reveal that the Cement Manufacturers Association of Nigeria (CMAN) has increased prices by over N1,000 per bag for respective brands.

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As a result, retail prices have surged to N6,200 or higher in Lagos and the Southwest, while in the Southeast and Abuja, they have surged to as much as N6,500 or even more.

Major cement producers in Nigeria

According to Leadership, the cement industry in Nigeria is primarily dominated by three key players. Leading the pack is Dangote Cement Plc, which holds a commanding 60.6% market share.

Dangote Cement has an impressive local installed capacity of 29.3 million MT.

Following closely behind is Lafarge Africa Plc, with a 21.8% market share and a production capacity of 10.5 million MT. Completing the trio is BUA Group, accounting for 17.6% of the market share.

Cost of blocks affected by cement price hikes

The latest changes in the market have affected the pricing of concrete blocks significantly.

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Manufacturers have responded by revising their prices, resulting in an increase in the cost of a six-inch block from N450 to N500 and a rise in the price of a nine-inch block from N550 to N600 per unit.

Moreover, there has been a notable uptick in the price of ready-mix concrete, and the expenses related to in-situ concrete production are anticipated to increase substantially.

This surge in costs is expected to worsen the economic challenges, leading to higher prices for new homes, elevated rental rates, and increased maintenance costs.

Consumers lament rising cost

Last year, Abdulsamad Rabiu, the chairman of BUA Group, announced a reduction in the cost of a bag of BUA cement from N5,000 to N3,500.

While the announcement was well received, many Nigerians quickly mounted pressure on Dangote Cement to also do the same, but the company declined, insisting that its product sold for far less than in other African countries.

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Despite Rabiu's announcement of a price reduction, investigations showed that retailers were still selling at higher prices, citing expenses along the supply chain.

The recent spike in the price of the product has generated serious concern amongst retailers, builders, block moulders and even average consumers.

Speaking with Legit.ng, Micah Akinloye, PRO of Akerele Block Manufacturers Association, expressed concern over the persistent increase in cement prices, highlighting its adverse impact on association members' production output and income.

He said:

Cement prices have become so expensive and it is affecting how much we can make from the production of blocks. This has also affected how lucrative block production used to be. Because the hike in cement prices and every other building materials in the market, patronage has become very low.

Akinloye appealed to the Federal Government to intervene by issuing additional licenses to industrialists for cement production.

In 2023, the Cement Producers Association of Nigeria cautioned about the Federal Government's proposal to implement concrete roads, forecasting a potential increase in cement price to N9,000 per bag from the current N5,000 price.

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In a statement, they also urged the current administration to take decisive action to resolve the recurrent issue of cement price hikes by promoting wider involvement in the cement industry.

They emphasized that Nigerians should not have to pay more than N5,600 per bag for cement.

Builders ask FG to slash cement price

In related news, Legit.ng reported that the Lagos Chapter of the Nigerian Institute of Building has called on the federal government to intervene and lower the cement price in the country.

The institute stated this at a briefing in Lagos state ahead of its 32nd Builders Conference tagged "Safe and Sustainable Building Production Management."

They attributed the skyrocketing cement prices to poor foreign exchange, adding that this has taken a toll on producers.

Source: Legit.ng

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