In an attempt to reduce the high costs of construction materials, the federal government has managed to lower the price range for cement in the North to between ₦8,000 and ₦9,500. This decrease is a significant improvement from previous rates and aims to make building materials more affordable for consumers. In Nigeria, the cost of cement is still higher than many other African nations. Popular cement companies like Dangote, Lafarge, and BUA are all selling 50kg bags of cement at almost the same prices in Retail stores.
One cost-effective option for buying cement in bulk is to purchase a trailer load wholesale. All cement brands provide wholesale options, making it easy to save money on a large quantity of cement. Cost reductions have been noted in the Federal Capital Territory (FCT) as well as Niger and Nasarawa States, as prices have dropped significantly from their previous highs of over ₦13,000 per bag prior to government involvement. In these states, the prices for popular cement brands vary.
Wholesalers & retailers are regarded as main obstacles in price regulation.
Dangote Cement ranges from ₦8,000 to ₦9,500, while Lafarge Cement is priced between ₦8,000 and ₦9,300. BUA Cement, on the other hand, is available for purchase at prices ranging from ₦7,500 to ₦9,000. In Abuja, a reporter had a conversation with Okechukwu Uche, a trader who provided valuable information on how the market has been affected by the government’s decision to reduce cement prices. Traders are hesitant to make any quick decisions as there are signs of prices potentially falling below ₦8,000.
They are choosing to carefully monitor the market and will wait until March 13, 2024 before evaluating the situation. Wholesalers and retailers are often cited as the main obstacles in price regulation, rather than the manufacturers themselves. These intermediaries have a significant influence on determining the prices faced by the final consumers. Uche observed that variations in procurement methods lead to disparities, as some choose to purchase directly from manufacturers while others opt to go through dealers. Procuring regular truckloads of cement from manufacturers like Dangote comes with high costs, which ultimately adds to pricing differences.
There is likelihood that prices could continue to go lower.
Government statements aside, it is ultimately the traders who have the most influence on prices. Many of them have not fully followed the instructions given three weeks ago to lower prices. Prices for the older stock are holding steady at ₦9,500, but newer stock is being sold for between ₦8,000 and ₦8,500. This suggests that prices could continue to go lower, although they are not likely to reach the previous low of ₦5,000 per bag.
Headquartered in Lagos, Dangote Cement Plc is a multinational cement manufacturer based in Nigeria. The company specializes in the production, import, packaging, and distribution of cement and associated products within Nigeria. With operations in nine other African countries, Dangote Cement Plc has established plants and import terminals across the continent. Obajana, Kogi, is home to the largest cement plant in Sub-Saharan Africa, owned by Dangote. This massive plant boasts a total capacity of 10.25 million tonnes per year spread across three production lines.
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Additionally, there is Construction underway for an additional 3 million tonnes per year capacity expansion. Back in 2012, a cement plant worth $1 billion was established in Ibese, Ogun by the company. This plant has the capacity to manufacture 6 million metric tonnes of cement annually, increasing the company’s overall production by 40% at that point in time. The construction and installation of the plant were carried out by Sinoma, a Chinese engineering and construction firm, making it one of the most significant non-oil investments in Nigeria.