Nigeria's cement prices higher than neighbours, probe finds

Nigeria's cement industry is under scrutiny for potentially inflated prices, according to the Federal Competition and Consumer Protection Commission (FCCPC). A preliminary investigation suggests that the cost of cement in Nigeria is higher than in comparable African markets, despite the country possessing substantial limestone deposits and a production capacity that significantly exceeds domestic demand.

The FCCPC's Anticompetitive Practices Department conducted a three-month cross-border study comparing Nigeria's market with those in Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria, and Togo. The findings indicate that while Nigeria has the capacity to produce between 60 million and 65 million metric tons of cement annually, domestic consumption is only around 25 million to 30 million metric tons. This surplus, coupled with Nigeria's status as a net exporter, makes the rising domestic prices particularly concerning.

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Findings from an industry-wide investigation conducted by the Federal Competition and Consumer Protection Commission suggest possible manipulation of prices of cement in the Nigerian market.

Public complaints about the escalating cost of cement, a staple in the construction sector, spurred the investigation. Market intelligence reviewed by the FCCPC revealed a significant price increase for a 50kg bag of cement between January and mid-year, with prices reaching between N13,000 and N15,000 in some regions by July. For comparison, a bag of cement in Kenya was sold for approximately $5.40, or N7,344, during a similar period.

The commission's report, a 40-page document compiled from field reports, highlights possible price manipulation within the Nigerian market. The investigation aims to understand the factors contributing to these high prices and ensure fair market conditions for consumers.

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This is the preliminary summation of the 40-page field reports collated following a three-month cross-border study by the Anticompetitive Practices Department of the Commission, undertaken in response to widespread public complaints over the high cost of cement, a common staple in the country’s construction industry.