Cost of a Bag of Cement in Nigeria Rises, Putting Homeownership Beyond Reach for Many Nigerians
- The price of a 50kg bag of cement has surged, worsening Nigeria’s housing affordability crisis
- Rising construction costs are pushing homeownership beyond the reach of low- and middle-income Nigerians
- The trend could deepen the housing deficit and force more Nigerians into lifelong renting
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The cost of a 50kg bag of cement in Nigeria has surged to between N10,500 and N15,000 from an average price of N5,000 and N8,500 previously, pushing homeownership further out of reach for millions.
Source: UGC
The increase in cement prices has been driven by strong demand, persistent inflationary pressures, high fuel costs, and rising transportation expenses.
In 2024, the federal government said cement manufacturers are not doing enough to stem the rising cost of cement in the country, stating that it will not accept a situation where the price of essential building materials like cement continues to rise uncontrollably.
This was relayed by the Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa, when he summoned cement manufacturers to a meeting at the Ministry headquarters in Abuja.
At the meeting, Dangiwa noted that the incessant hike has overtaken the country, with prices rising by over 100%.
The 3 major cement producers in Nigeria are Dangote Cement, BUA Cement, and Lafarge.
Average Nigerians can't build
Aliyu Oroji, immediate past president of the Real Estate Developers Association of Nigeria (REDAN), said rising building costs are slowing construction and pushing property prices beyond the reach of average citizens, Leadership reports.
He said:
“Developers are being forced to increase prices, and ultimately, it is the end user who bears the burden. We are creating a situation where only a small fraction of Nigerians can afford to own homes."
Housing experts note that cement prices play a critical role in determining housing costs. As input costs rise, developers pass on the increases to buyers, making even modest homes increasingly unaffordable.
This growing mismatch between wages and housing costs is trapping many Nigerians in a cycle of renting with little hope of ownership.
The federal government has acknowledged the situation, with Minister of Housing and Urban Development, Ahmed Dangiwa, describing it as troubling, particularly for a product largely produced from local raw materials.
Source: Getty Images
Analysts say structural issues within the cement industry may be contributing to the high prices.
A report by Agora Policy indicates that a few major manufacturers control about 95 %of the market, limiting competition.
Economist Ifeoma Nwoye said:
“When a few companies dominate the market, there is little incentive to reduce prices, and those at the bottom are the first to be excluded."
Cement companies made N677.4 billion profit
Earlier, Legit.ng reported that Nigerian cement makers defied troubles in 2024 to post stunning profits, buoyed by price hikes.
A breakdown of Dangote, BUA, and Lafarge’s unaudited financials reveals that the firms’ profits after tax rose to N677.48 billion in 2024, representing a 17.6% increase from N675 billion due to price hikes implemented in response to increasing operational costs and inflationary pressures.
Dangote Cement posted the highest profit at N503.4 billion, followed by Lafarge at N100.1 billion, and BUA at N73 billion. The companies’ profits were driven by robust revenue growth.
Source: Legit.ng
