Mixed response to government’s cement tariff increase

Mixed response to government’s cement tariff increase
Published: 08 November 2010

The 35 per cent increase in tariff on imported cement recently announced by Nigeria’s Federal Government has continued to generate mixed reactions from professionals and stakeholders alike in the construction industry.

The increase which according to government is to encourage backward integration has not gone down well with a cross section of watchers of the industry. Some others have, however, posited that the development should be allowed to evolve in order to ascertain its benefits or otherwise.

Immediate past chairman of the Lagos Chapter of the Nigerian Institute of Building (NIOB), Kunle Awobodu, likened the policy “a circus show”, adding that it should be given time to evolve with a view to ascertaining its benefits or drawback.

According to him, if the aim of the policy is to encourage local production of the commodity, then it may not likely serve the intended purpose.

He pointed out that the forces of demand and supply would render the whole objective of the policy useless, noting that the demand for cement far outweighs supply.

Awobodu said that similar steps taken by government in the past did not yield the desired result and that the current step might not be anything different from what obtained in the past.

He appealed to local producers of the product to step up their production capacity if only to meet the high demand for the product.