The Nigerian Senate has called for liberalizing cement policy to boost production and reduce market prices, which currently hover at around N4,000 ($10.49) per fifty-kilogram bag.
Senator Lola Ashiru recently promoted the motion during a plenary session, Nairametics reported. He tasked the government with providing greater industrial incentives to bring new players into the cement industry.
Ashiru said industrial incentives and protections such as concessionary loans and tax incentives will help to create an enabling market for new entrants. The realtor and representative of Kwara State South Senatorial District underscored that liberalizing the market would lead to favorable shifts in Nigeria’s construction and real estate sectors.
Africa’s largest market with over 200 million people, Nigeria has three primary cement players: Dangote Cement (Africa’s largest cement maker), BUA Cement and Lafarge. This means the sector is currently controlled by two of the continent’s leading billionaires, Aliko Dangote and Abdul Samad Rabiu, and a French company.
Although the government believes that the country is self-sufficient in terms of cement production, the high cost of cement in Nigeria indicates the need for more players who can help bridge the production gap.
Road construction and the rapid growth of real estate development aimed at addressing the housing deficit are the primary drivers of increased cement consumption in Nigeria. Earlier, the Oxford Business Group forecasted that consumption in these segments would demand 77 million tons of cement up until 2020.
Dangote Cement has three production facilities in Nigeria capable of producing up to 29 million tons of cement per annum. BUA Cement owns two production lines capable of delivering 6 million tons per annum.
Early in February this year, Abdul Samad Rabiu called for liberalizing Nigeria’s cement policy to boost production and crash the commodity’s price.
He noted that, although the country produced more in 2020 than 2019, it made less than 30 million metric tons of cement for its over-200-million population, Today NG reported.
“Even though this cement policy is a good one, it must be done in such a way that a lot of players must come in and participate,” he said. “There is no point in making a policy that only one, two, or three people are able to benefit from that policy. That does not make sense. I am benefiting from this policy, but I know it is a bad policy. So, whilst the policy is good, the way it is being administered is not good. You can’t have a policy that restricts so many people from participating, at the end of the day, you are just creating a monopoly.”
