New Prices Emerge as Nigerian Billionaire Rabiu Explains Reason For High Cement Costs
- Cement prices in Nigeria have surpassed N12,000 per bag, impacting housing accessibility
- BUA Cement said it faces foreign exchange and energy cost pressures, affecting production expenses
- The company announced that it plans to boost production capacity despite ongoing economic challenges
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The soaring cost of cement in Nigeria may remain high for longer than many consumers expected, as billionaire businessman Abdul Samad Rabiu has revealed the major factors pushing prices upward across the country.
Cement prices have now crossed N12,000 per 50kg bag in several parts of Nigeria, triggering frustration among builders, developers and ordinary Nigerians struggling with rising housing costs.
Source: Getty Images
Many have argued that the spike threatens efforts by the Federal Government to reduce the nation’s housing deficit and make affordable housing accessible.
Speaking during the 10th Annual General Meeting of BUA Cement Plc in Abuja, Rabiu explained that the industry is battling severe foreign exchange pressures, surging energy bills and rising transportation costs.
FX reforms changed the market
According to Rabiu, the depreciation of the naira significantly increased the cost of imported spare parts, energy inputs and other materials needed for cement production.
He noted, however, that recent foreign exchange reforms introduced by the government have started bringing some stability to the market, helping manufacturers plan more effectively.
“Today, whatever rate I get, it’s the same rate anybody gets,” Rabiu stated, adding that exchange rate stability over recent months has allowed businesses to project costs up to nine months ahead.
He admitted that the reforms initially created pain for businesses but said the changes removed distortions that once made access to foreign exchange difficult for manufacturers.
Energy costs are eating deep into production
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Further shedding light on the pricing crisis, Managing Director and Chief Executive Officer of BUA Cement, Yusuf Binji, disclosed that energy alone accounts for nearly 60 per cent of cement production costs.
Binji revealed that before the naira devaluation, one of the company’s plants in Edo State spent about N4 billion monthly on natural gas. That figure later surged to N16 billion as exchange-rate pressures intensified.
“As you know, the price of cement, rightly or wrongly, is a consequence of input costs,” he said.
He also linked the sharp rise in diesel prices to growing tensions in the Middle East, explaining that diesel supplied to the company’s factories rose from about N930 per litre in March to nearly N1,850 per litre within two months.
“Half the price of cement is transportation”
Binji stressed that distribution expenses have become one of the biggest drivers of cement prices nationwide.
“If you consider that we have to deliver cement to our customers using our own trucks that use diesel, even the price we are talking about, half of that price of a bag of cement is actually because of transportation,” he explained.
The company, however, expressed optimism about future expansion plans aimed at boosting supply and supporting infrastructure development.
BUA expands production capacity
BUA Cement disclosed that its new production line in Ososo, Edo State, is nearing completion, while another production line has already been announced for Sokoto State.
The projects are expected to add six million tonnes to the company’s annual output and raise total installed production capacity to 23 million tonnes annually by the end of next year.
Source: Getty Images
Despite economic challenges, the company recorded strong financial growth. BUA Cement posted N1.2 trillion revenue in 2025, up from N876.5 billion in 2024.
Profit before tax jumped by 367 per cent to N465.3 billion, while profit after tax rose sharply to N356 billion from N73.9 billion recorded in the previous year.
Shareholders at the AGM also approved a final dividend payout of N10 per ordinary share for the 2025 financial year.
Dealers release new cement prices
Legit.ng earlier reported that leading manufacturers, including Dangote Cement and BUA Cement, have adjusted cement prices nationwide, with a bag now selling for as high as N12,000 in many parts of the country.
Industry operators say the latest increase marks another sharp jump from previous prices of between N11,000 and N11,500, deepening concerns about affordability and slowing construction activities.
Experts point to rising energy costs as the primary trigger behind the new pricing regime. Manufacturers are grappling with higher fuel prices, which directly impact production processes that rely heavily on energy.
Source: Legit.ng
