From N5,000 to N9,000: Producers warn of cement price increase, gives reason

The Cement Producers Association of Nigeria has warned that the federal government's continued ambition to build concrete roads will increase the cost of cement from its present N5,000 per bag price to N9,000.

The association also urged the current administration to encourage greater participation in the cement industry to address the issue of ongoing cement price increases permanently.

It advocated that Nigerians should not buy cement price for more than N5,600 a bag, according to a report by Punch.

This is coming after Dangote Group, the parent company of Dangote Cement, denied reports that it plans to reduce cement prices by 50.9% on October 1, 2023.

Legit.ng earlier reported that Dangote Cement Plc clarified that its cement pricing aligns with, or even falls below, the prevailing prices along the West African coastline.

The group praised the works minister's stance on cement-made roads in a statement co-signed by the national chairman, Prince David Iweta, and national secretary, Chief Reagan Ufomba. Still, it warned of profound implications if the supply end was inadequately addressed.

As a remedy, the cement producers urged the government to emphasise the design of roads so that cement technology and asphalt pavement could be used simultaneously.

This would also give contractors enough time for a smooth transition so that they could invest in the necessary tools and retooling.

The statement read: “Our findings from various parts of the country show that cement sells for as high as N6000 per bag in the rainy season.

We predict that it will sell for over N9,000 per bag in the dry season, especially with the pronouncement of the Honourable Minister of Works on cement technology and the marching order on housing by Mr. President if the government does not take proactive steps.

It applauded the Honourable Minister's stance on cement-made roads but warned of the grave repercussions if the supply end was not adequately addressed.

The group felt that failing to act immediately would be a breach of duty. It added that to do otherwise would be to maintain a deteriorating pipe dream that would see a sudden drop in this necessary input.

It noted that this would continue to drain Nigerians' wallets, cause them to become homeless, promote chaos between demand and supply, thereby worsening the infrastructure deficit intended to address and resulting in an unprecedented price increase.

The association, therefore, called on the Honourable Minister of Works to emphasise the design criteria of roads that allow both cement technology and asphalt pavement to run concurrently.

It noted that this will provide ample time for a smooth transition that allows contractors to invest in commensurate and requisite equipment and retooling.

Cement manufacturers asked the government to continue with the backwards integration policy of the late Yar'adua administration, which had already made cement more readily available and more reasonably priced in the nation.

In response to recent comments on cement prices, it noted that the country needs readily available and reasonably priced cement.

It further stated that without severing the link between monopoly and favouritism, this cannot be accomplished by merely having bad policies and initiatives. The producers claim that Nigerians are fed up with waiting for a decrease in cement prices as well as for excellent, reasonably priced housing.

The group calls on the Tinubu administration to increase sector engagement with firms with verifiable proof of local investment, such as greenfield licenses and quarrying, to permanently resolve this problem of cement price increases.

They urged the government to particularly end the late Yar'adua administration's backward integration policy, which was already producing availability and affordability benefits.

The group also urged the government to evaluate palliative modules, intervene promptly in the foreign exchange market, and intervene in the restructuring of manufacturers' bad loans. They think that once all manufacturing worries are resurrected, the cry for elusive FDI will significantly decrease.