Cement Manufacturers have agreed to sell a 50kg bag of cement at a retail price between N7,000 and N8,000, depending on location nationwide.
The Minister of Works, Dave Umahi, announced after a meeting with leading cement manufacturers on Monday in Abuja adding that Nigerians will feel the impact in 30 days.
The manufacturers however stated that the price drop from the current market price would depend on the fulfillment of certain government interventions to ameliorate critical challenges faced in the industry.
The meeting was against the backdrop of the ballooning price of the commodity to approximately N13,000 in several retail stores in the Federal Capital Territory, and Enugu, indicating the impact of inflation within the country.
But at the meeting ordered by President Bola Tinubu, Umahi lamented the current rate stating that it was abnormal and detrimental to the economic prosperity sought after by the current administration.
Reading the communique after a three-hour discussion, the minister said certain issues including smuggling, bad roads, high energy costs, and the forex crisis caused the high prices but stressed that manufacturers have expressed their readiness to be willing to bring down the prices in the future.
He said, โThe meeting discussed extensively the current prices of cement vis a vis the challenges from the manufacturers. They talked about their challenges ranging from the high cost of gas, high import duties from their spare parts, bad road network, and of course the high FX rate.
โThey also talked about the issue of cement across our borders and how it is creating scarcity and high increase.
โWe agreed that the trade ministry will seek some remedies from the president on the high cost of gas and the issue of import duties and fixing of the roads within the distribution corridors.
โThe cement manufacturer has noted and the government that the present high cost of cement in the market is very much abnormal in some locations nationwide. Ideally, they noted that cement price, and retail price to a consumer should not cost more than between N7,000 to N8,000 per 50 kg bag of cement.
โTherefore, the government and the cement manufacturers, which are Dangote Plc, BUA Plc, and Lafarge Plc have agreed to have their cement price nationwide between N7,000 to N8,000 naira per 50 kg pack of cement, depending on the locations, which means that this price depends on the locations. Going forward, the government advised manufacturers to set up a price monitoring mechanism to ensure compliance with the prices that are set today and manufacturers have willingly accepted to do that and sanction any of their distributors or retailers found wanting.โ
He mentioned that the government anticipates a reduction in the agreed price following interventions to address manufacturersโ challenges on gas, import duty, smuggling, and better road network. The meeting concluded with an agreement to reconvene in 30 days to assess the progress achieved.
In her remarks, the Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, pledged the governmentโs commitment to collaborate with industries to remove bottlenecks and encourage smooth operations.
โWe will continue as a government to collaborate with the industries to deepen our engagements with them and remove bottlenecks to have smoother operations and the benefit of the backward integration program is enjoyed and felt by every citizen.
โNigeria stopped importing cement since 2012 and there is no reason why we should be experiencing the kind of issues we are having in cement pricing,โ she added.
BUA pledges six million tonnes to boost supply
On his part, the Group Executive Director of BUA, Kabiru Rabiu, disclosed plans by the company to supply 6m tonnes of cement into the market to mitigate the surging prices.
He also said cement continues to be smuggled by mischievous retailers because the price is the cheapest in the region, which makes it vulnerable to smuggling adding that this activity does not through official channels and does not benefit the government.
โBUA is committed to bringing in an additional six million tonnes of cement in the next few weeks and that would seriously dampen the pressure of supply. we would remain committed to these engagements and we would reassemble in 30 days.โ
โThe high cost of cement in Neighboring countries has made smuggling lucrative. The cost of cement in Chad and Cameron is about N15,000 per bag and we noticed that distributors through the North Eastern part smuggle products to neighboring countries. They do that not through official channels and the government is not benefiting from their export. Unless that is sorted, weโll continue to have pressure from those markets.
โThere is a big disparity between demand and supply in Nigeria. I think some plants have issues that have reduced production. We are at the peak of cement demand but supply seems less so there is going to be a crisis and that is why we are working hard to bring more products to the market to reduce the pressure of demand and supply in the market,โ he concluded.
