Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) has opened an investigation into possible cement price manipulation after a three-month study raised concerns over high domestic prices despite substantial installed capacity.
The FCCPC estimates Nigerian cement capacity at 60-65Mta against domestic consumption of 25-30Mta. Nevertheless, the price of a 50kg bag increased from NGN9300-9700 in January to as much as NGN13,000-15,000 in some areas by July.
The commission compared Nigeria with cement markets including Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo. It said the apparent excess capacity had not produced the downward pressure on prices that might ordinarily be expected in a competitive market.
Producers have attributed higher prices to energy costs, naira depreciation, imported equipment and spare parts, and transport and logistics costs. The FCCPC said it would test these explanations against production costs, pricing and capacity utilisation data.
The investigation will examine possible coordinated conduct, abuse of market power, restrictions on domestic supply and anti-competitive distribution practices. The commission has issued notices to key industry participants requesting information on pricing, production, capacity utilisation, exports and commercial relationships.
