By Danlami Nasir Isah
As inflation in the country maintains an upward trend, Nigerians have been enduring the persistent increase in the price of cement.
In the last two years, findings by Valuechain have shown that price of cement has risen by more than 177 per cent from N1,800 to N5,000 as currently seen in different parts of the country.
A further breakdown shows that in the first quarter of 2021, the commodity sold for about N3,800 from N2,500 in the previous year.
The federal government, while lamenting the rising prices, attributed the upward trend movement to production challenges, adding that it was engaging stakeholders in the industry to address the issue.
Fast track to the second quarter of 2022, the retail price of cement in Abuja, Lagos, Port Harcourt and environs currently fluctuates between N5, 000 to N5,500
Industry, Trade and Investment Minister, Àdeniyi Adebayo had blamed the hike in the price of cement on reduction in production volumes in the second and third quarters of 2020 as a result of the COVID-19 pandemic, the EndSARS protests as well as downtime in some manufacturing plants.
Adebayo said the development affected the volume of stockpiles in the supply chain due to the reduction of cash flow to major distributors as well as the high cost of transportation.
Implications of rising prices
Stakeholders in the property sector, however, believe that the rising prices could hamper efforts to close the existing housing deficit as well as lead to the abandonment of ongoing construction projects by both public and private individuals because of the high cost of the commodity and associated building materials.
An expert, Kabir Hamidu said the rising prices of cement is gradually making rents more expensive in the FCT and environs
“Already, house rents have more than doubled within the Federal Capital Territory (FCT) as a direct consequence of cement price hike, causing further economic hardship for Nigerians.
“Also, you cannot believe that a six inches cement block now costs N300 Naira as against the initial N80 we usually buy few years ago, it’s a sad development and government must do something to bring the prices down,” he said.
Why Government must act fast
Analysts and many Nigerians believe that government intervention remained critical to solving the problem while others also recommended mortgaged intervention to help the ordinary Nigerian own a shelter considering the fact that many projects are currently being abandoned as a result of rising cement prices.
They argued that things could only become worse if prices are continuously determined by capitalists who are bent on taking advantage of price movements.
Also, increasing the number of operators in local cement production could help stimulate healthier competition which would impact downward price movement.
In July 2021, Chairman of BUA Cement Plc, Alhaji Abdul-Samad Rabiu, harped on the need to boost cement production to tame the insatiable and sustained demand for the commodity which had led to exorbitant prices in recent times to the detriment of builders and potential homeowners.
The BUA chairman said more operators were needed in the cement industry, adding that the quantity of cement produced by BUA, Dangote and Nafaj could not meet the demand considering the country’s high population.
He further stressed that currently, the three cement companies produced about 30 million tonnes per annum, hence the need to have more players to reduce prices.
Rabiu said though more players would mean more competition for BUA, it was nonetheless in the best interest of the country. He emphasised the need for the federal government to encourage more investors into the sector to meet the cement demand of Nigerians.
This, he said, is presently affecting the prices of buildings initiated by both the government and private sector developers.
He said, “The housing plan to accommodate ordinary workers and Nigerians alike has moved beyond the reach of this category of people who depend on the minimum wage to own a property.
“This development could be attributed to the government’s loss of control as regards major producers of cement who have taken advantage of government’s slackened policies to determine prices in conjunction with their major distributors to the detriment of the people.” he added.
