The Cement Producers Association of Nigeria has issued a warning that the federal government’s sustained commitment to constructing concrete roads could lead to an increase in cement prices. The association expressed concerns that the cost of cement, presently at N5,000 per bag, could escalate to N9,000 if the government’s concrete road ambitions continue. Additionally, the association urged the government to foster greater participation in the cement industry as a long-term solution to rising cement prices. It recommended that Nigerians should not pay more than N5,600 per bag.
The group’s statement follows recent reports that Dangote Group, the parent company of Dangote Cement, will not reduce cement prices by 50.9% on October 1, 2023, contrary to some claims. Dangote Cement clarified that its pricing aligns with or falls below prevailing prices along the West African coastline.
While commending the Works Minister’s endorsement of cement-made roads, the Cement Producers Association also emphasized the importance of addressing the supply side of the equation. To mitigate potential issues arising from the government’s focus on cement technology and asphalt pavement in road design, the association urged simultaneous implementation of these technologies. This approach would allow contractors ample time for adaptation and necessary investments in tools and retooling.
The group expressed concern that cement prices have risen to as much as N6,000 per bag during the rainy season and projected that the price might surpass N9,000 per bag during the dry season. These concerns stem from the government’s commitment to cement technology and housing initiatives, which could exacerbate cement demand.
The Cement Producers Association called on the Works Minister to prioritize road design criteria that accommodate both cement technology and asphalt pavement. This adjustment would facilitate a smooth transition and allow contractors to invest in essential equipment and retooling.
In addition to the call for balanced road design, cement manufacturers advocated for the continuation of the backward integration policy initiated during the late Yar’adua administration. They asserted that this policy had made cement more accessible and affordable in Nigeria. Cement producers also urged the government to engage with firms demonstrating verifiable local investments, such as greenfield licenses and quarrying, as a permanent solution to rising cement prices.
To address concerns about cement prices and manufacturing, the group recommended that the government intervene in the foreign exchange market, restructure manufacturers’ bad loans, and implement palliative modules. By resurrecting manufacturing concerns, the group believes that the need for elusive foreign direct investment (FDI) will substantially decrease.
The chairman of BUA Cement Plc, Abdulsamad Rabiu, recently expressed optimism that the completion of the company’s two new factories by year-end would lead to lower cement prices, further highlighting the ongoing discussions surrounding cement pricing in Nigeria.