Who to blame for higher prices?

Who to blame for higher prices?
Published: 29 March 2005

Importers of cement and major distributors of the local Nigerian production have been fingered as responsible for the latest increase in the retail price of the commodity.  Nigerians were jolted last week by the sudden hike in the unit price of cement, which rose from an average price of N1000 to N1400. The dealers on the other hand blame the development on a shortfall in local production. 

Investigation by Business Champion however revealed that the local manufacturers of the product, including West Africa Portland Cement (WAPCO) Plc, Ashaka Cement and Benue Cement Company (now Dangote Cement) are still selling to the distributors at the old rate.  But President, Association of Professional Bodies of Nigeria, Mr Herbert Agbebiyi blamed the situation on high dependence on cement imports, which he put at 70 per cent of the total consumption in Nigeria. 

He reasoned that importers must have formed themselves into a cartel to jerk up the price of cement, following the increase in number of people now embarking on house projects.  "This is possible because we don’t have enough factories producing locally and we have to augment with imports.  "If you didn’t control the supply of any product, it is very difficult to control the price of that product", said Agbebiyi. 

Apart from the importers, major distributors of cement produced locally were said to have followed the trend to increase the price of the product.  A top manager at WAPCO Plc confirmed to local reporters that there was no new price regime from the company.  "The problem is not from us. The distributors still get the product from us at the old price. We are still trying to understand what is really going on," he stated.