Nigeria’s hamstrung potential

Published 20 December 2021

Rapid cement capacity build-up over the last two decades and further new additions on the way mean that by next year, Nigeria will have the second-largest installed capacity in Africa. However, while the country’s long-term demand outlook is immense, EFG Hermes explains why massive potential is currently being hamstrung by a sluggish domestic economic outlook. By Moses Waireri Njuguna, EFG Hermes, Kenya.

Capacity increase in Nigeria is a means for some players to position themselves for the future demand explosion

By 2022 Nigeria’s installed capacity will hit 56.75Mta (from 50.75Mta in 2020), according to estimates by EFG Hermes, cementing the country in second spot in terms of installed capacity in Africa after Egypt. This increase is driven by capacity build-up by Dangote Cement PLC (3Mta in Okpella by the 4Q21 after commissioning the 3Mta Obajana Line 5 in 2020) and BUA Cement’s 3Mta in Sokoto state, northwest Nigeria, which is expected to be completed by the end of 2021. Beyond 2022 it is expected that BUA Cement will undertake a 9Mta project (comprising 3Mta in Edo state, 3Mta in Sokoto and a 3Mta greenfield plant in Adamawa state, northeast Nigeria) at a capital cost of US$1.05bn and due for completion by mid-2023. The agreement was signed with Sinoma CBMI Construction in late 2020.

As a result, EFG Hermes computes Nigeria’s installed capacity to be an expected 65.75Mta by 2024. Although there are understood to be potential new entrants into the sector, EFG Hermes appends a low probability of any market disruption until further details of project commencements emerge.

To continue reading this story and get access to all News, Articles and Video sections of the website, please Register for a subscription to International Cement Review or Login