Cement price: FCCPC uncovers possible manipulation after 3-month probe

Nigeria's Federal Competition and Consumer Protection Commission (FCCPC) announced it has uncovered potential manipulation of cement prices in the domestic market. This discovery follows a comprehensive three-month industry-wide investigation.

The investigation was initiated due to persistent concerns about Nigeria's cement prices being disproportionately high, especially when compared to its significant limestone reserves, domestic production capabilities, and reported surplus capacity. The FCCPC's preliminary findings are detailed in a 40-page field report.

During the probe, most major cement manufacturers cooperated by providing their records. However, the commission noted that three major companies account for over 90% of the installed production capacity. The FCCPC also extended its investigation to other African countries, including Kenya, Tanzania, South Africa, Egypt, Morocco, and Algeria, to compare market dynamics.

Market intelligence reviewed by the FCCPC revealed a significant price increase for cement in Nigeria. A 50kg bag, which cost between N9,300 and N9,700 in January, rose to N10,500-N13,000 by mid-year, reaching N13,000-N15,000 in some areas by July. This occurred despite Nigeria having an installed cement production capacity exceeding 60-65 million metric tons annually, far surpassing its estimated domestic consumption of 25-30 million metric tons. The country is also a net exporter of cement.

FCCPC Executive Vice Chairman Tunji Bello stated that the investigation is crucial because cement prices directly impact housing, commercial property development, public infrastructure, and the overall cost of doing business. He emphasized that the FCCPC's goal is not to dictate business operations but to ensure the market functions competitively and benefits consumers. Consequently, the FCCPC has issued notices and summons to key players, demanding information regarding their operations.

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Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business. When concerns persist about how such an important market is functioning, the Commission has a duty to look beyond assumptions and establish the facts.