The House of Representatives’ joint committee investigating the rising price of cement in Nigeria has asked major producers to provide documents on their production costs.
This request aims to justify the current high price of cement in the market.
The Chairman of the joint committee, Jonathan Gaza (APC-Nasarawa), made this demand on Friday during a public hearing in Abuja.
He said, “The committee is interested in the cost of production from 2020 to date that justifies the current price of cement, which is over N10,000 in most parts of the country.”
Gaza asked the companies to give details about their average daily consumption of coal, gas, gypsum, limestone, clay, and laterite, as well as their average daily production of cement from 2020 to date. He also requested details of all imported components used in cement production and their prices from 2020 to date, as well as local components and their prices in both naira and dollars.
He said, “The companies should provide a summary of the monthly prices and quantity of cement produced from 2019 to date, as well as their audited accounts, bills of lading, and duties paid to customs within the period under review.” He also asked for details of tax waivers, incentives, and contracts for gas and explosives.
Another committee member, Dabo Ismail (APC-Bauchi State), noted that Dangote Cement Company has continued to make increasing profits despite sourcing most raw materials locally. He said, “In 2022, the company declared a profit of N524 billion, N553 billion in 2023, and has so far made N166.4 billion in 2024.”
Ismail expressed concern over the rising cement prices, saying, “There is no reason why the price of cement will keep rising in the market to the detriment of Nigerians while producers are smiling to the banks.”
The Group Managing Director of Dangote Cement Company, Arvind Pathack, explained that 95 percent of production costs are either imported or linked to foreign exchange. He said, “There has been between 100 to 333 percent increase in the price of major cement input materials like gas, AGO, gypsum, imported coal, spare parts, new trucks, tyres, and petrol.”
Pathack added, “Logistics issues, such as the deplorable state of key roads, create several issues including longer delivery times, increased truck maintenance, and delivery costs.”
He mentioned that a lack of sufficient foreign exchange to settle trade obligations has resulted in huge forex losses of N150 billion per annum, while paying 30 percent interest on loans. He also highlighted the impact of currency devaluation, insecurity, and poor public power supply on production costs.
Pathack stated, “Cement is being sold at an average cost of N7,200, and any price over N10,000 is due to retailers, which the company has no control over.”
Comparing prices in other countries, he noted, “When converted to dollars, a bag of cement is sold at $7.8 in Benin, $6.6 in Togo, $7.8 in Ghana, $4.4 in India, while in Nigeria, it is $4.43, making it one of the cheapest in Africa.”
The committee urged the companies to review their policies and operations to reduce the price of cement in Nigeria. Chairman Jonathan Gaza expressed hope that the engagement would lead to a price reduction, blaming the high prices on the Federal Competition and Consumer Protection Commission (FCCPC) for failing to protect consumers from middlemen.
“We are extremely hopeful that this engagement will lead to a reduction in the price of cement,” Gaza said. “FCCPC has slept on their functions so far, their inactivity and non-responsiveness to price is what has put Nigeria where we are today.”
NAN.
