Nigeria: rising cost of cement

Nigeria: rising cost of cement
Published: 02 May 2007

The unprecedented rise in price of cement in recent times is, to say the least, lamentable, says Sun News Publishing. The development is a serious slur on the promises of the government that the product would be available and affordable with the resuscitation of existing local cement factories.

Instead of the price of cement coming down as expected, it keeps going up and gradually, a bag of cement that was sold for N500 about two years ago rose to an all-time high of between N1, 100 and N1, 200 in February this year alone. As if that was not enough, the price has, within the last one month, oscillated between N1, 700 and N1, 800 across the country. 

There are fears in some quarters that, given the very slow general economic development of the country, the price may either remain so or even go higher if nothing is done fast to mitigate this worsening situation.

Industry players as well as end users of cement are worried over the implication the price trends would eventually have on the industry and the nation’s economy in both the short and long run. 

Reasons so far adduced for the high cost of the product include scarcity of diesel used for local manufacturing, prohibitive haulage cost and exorbitant port charges. Another important factor for increasing cost of cement is that most of the nation’s cement needs are dependent on imports. Importation alone accounts for 60 per cent of about 10 million tonnes of cement needed in the country annually, while the local manufacturers take care of the remaining 40 per cent.

Actually, there is no way the price of cement would not escalate given the fact that most of the local cement plants depend solely on generators for their energy needs. And since cement manufacturing is a highly energy consuming enterprise, it makes economic sense for the manufacturers to pass on the cost to end-users, unfortunately. 

As we have had occasion to state in several editorials, there are inherent dangers in running our economy on generators. No country can ever develop industrially and economically where power generation is generator-based as currently obtains in the country.