Cement Price To Remain High As Senate Turns Down Intervention
There is no sign in sight for a reduction in cement prices in Nigeria as the Senate yesterday turned down a motion seeking liberalisation of the cement industry.
The motion which was sponsored by Senator Ashiru Oyelola Yisa (Kwara South) and co-sponsored by Sen Bima Muhammad Enagi (Niger South); Sen Oriolowo Adelere Adeyemi Osun West; Sen Egwu Samuel Ominyi (Ebonyi North); Sen Gaya Kabiru Ibrahim (Kano South) and Sen Nnachi Michael Ama (Ebonyi South) urged the Senate to advise the executive to liberalise current policies on cement production to attract more investors in order to make cement available to Nigerians at a moderate price.
The lawmakers also urged their colleagues to call on the executive to provide more industrial incentives and industrial protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cement, reduce price and encourage more valuable producers in Nigeria.
They asked their colleagues to urge the executive to set up a committee to investigate anti-competitive practices by local cement producers; direct the cement industries in Nigeria to increase their production and reduce the price of 50 Kg of cement to the barest minimum considering the fact that the materials for its production are mainly sourced locally.
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But during deliberations, the red chamber resolved that the market is capital intensive adding that there are no restrictions for newcomers to warrant their intervention.
Report says that China, which currently produces the most cement globally by a large margin estimated at 2.2 billion metric tons is a result of government support to the manufacturers.
Global cement production increase in 2021 to 3.27 billion metric tons and the world is expected to produce 4.83 billion metric tons in 2030 but in Nigeria, the commodity sells at an exorbitant price with oligopolistic competition by three players – Dangote Cement (60.6%); Lafarge Africa Plc (21.8%) and BUA Group (17.6%).
The Senate resolved that the executive should provide more industrial incentives and industrial protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cements, reduce price and encourage more valuable producers in Nigeria.
Speaking earlier, Sen Ibrahim Gobir (Sokoto) said liberalising the cement policy would collapse the industry adding that the government should only protect the enterprise and industries.
