Barely one month after the lifting of the ban on importation of cement by the Federal Government, the price of cement has increased from N1,300 to N2,200.
According to a market survey carried out by the Nigerian Tribune in Lagos at the weekend, the price of a bag of cement has increased progressively from N1,300 to N1,600, N1,800 and now N2,200 less than 30 days after the granting of licences for importation.
In some of suburbs of Lagos such as Ajah, Ayobo, Ipaja, Ikotun, Berger and Ibafo on the Lagos-Ibadan axis, the price of a cement bag ranged between N2,100 and N2,250.
A source from one of the local manufacturing industries said they actually increased the price by N100 and that there was an indication to further increase the price.
The Federal Government, after meeting with cement manufacturing companies last January in Abuja, announced the lifting of the ban on the importation of cement following a shortfall local production.
Justifying its policy reversal on cement importation, Minister of Industry, Chief Charles Uguwh, said the decision was taken because of an annual shortfall of 11.5Mt.
Annual demand for cement is estimated at about 18Mt while annual consumption in 2007 was estimated at 11.125Mt. Local operators can only supply between six and 6.5Mt.
Chairman of the Nigerian Institute of Building, Lagos branch, Mr. Kunle Awobodu, said the situation was worrying and attributed it to hoarding by traders in an attempt to make unnecessary profit out of government’s gesture to lift the embargo on cement importation.
He lamented that the situation where a bag of cement was being sold at N2,200 had become unbearable for construction experts.
He said this would cause a lot of dislocations in service delivery, stating that where a company projected for profit, it might record loss caused by the sudden increase in the price of cement.
For existing building, there would not be much effect but owners of new buildings would charge high rents because of the high cost of cement.
Affordable homes scheme being championed by the government may be a mirage after all.
The cost of maintenance of buildings will also increase as a result of the new price regime and in effect affect rents in Lagos and all over the country.