Inflationary pressures in Nigeria have led to a fresh increase in cement prices and associated products across the country, causing concerns among dealers and retailers. The high inflation rate has impacted the building materials market, making cement and other crucial components unaffordable for many intending homeowners.
Cement-based products are vital for housing development in Nigeria, accounting for approximately 40% of building costs during the estimation plan. However, the cement market is dominated by three major producers: BUA, Dangote, and Lafarge, which could limit competition.
Despite the country’s abundant raw materials for cement production, the prices have continued to rise beyond affordability. Some industry operators fear that the recent price hike may further stifle the industry, considering cement’s central role in construction.
Market research shows that prices of building materials, including cement, have surged by over 70% between last year and July 2023. A 50-kilogram bag of cement now sells between N4,900 and N6,000 in various locations.
Downstream users, such as block makers, have also reacted to the increase, charging higher prices for their products. The reasons behind the price hike are a subject of debate, with some retailers blaming logistics and haulage costs due to fuel subsidy removal, while dealers attribute it to an increase in factory prices by producers.
The recent removal of fuel subsidies has added to the cost of transportation and distribution of cement products, leading to further price adjustments. As the cement industry faces these challenges, stakeholders are seeking clarity from producers on the reasons behind the sudden price changes.
