In a bold move to combat the escalating cost of cement in Nigeria, the Federal Government has issued a stern warning to cement manufacturers.
The government has threatened to open the country's borders to allow cement importation if the manufacturers fail to reduce the price of the commodity.
Ahmed Dangiwa, the Minister of Housing and Urban Development, made this declaration on Tuesday during an emergency meeting with cement and building materials manufacturers in Abuja. He argued that key input materials for cement production, such as limestone, clay, silica sand, and gypsum, which are sourced within the nation’s borders, should not be dollar-rated.
Dangiwa dismissed the manufacturers' claim that the price of gas, a raw material found within the country, is a valid reason for the high cost of cement. He also refuted the argument of an increase in mining equipment costs, stating that the equipment used by the manufacturers have been in use for decades and are not purchased daily.
The minister explained that the border was initially closed to cement importation to aid local manufacturers. However, he warned that if the government decides to open the border for mass importation, the prices of cement would crash, and local manufacturers would be severely impacted.
Dangiwa urged the manufacturers to demonstrate more patriotism. He cited BUA Cement as an example, stating that the company has shown willingness to reduce the price of their cement below the N7000, N8000 agreed by the manufacturers. He sees no reason why other manufacturers should not follow suit.
“The challenges you speak of, many countries are facing the same challenges and some even worse than that but as patriotic citizens, we have to rally around whenever there is a crisis to change the situation.
“The gas price you spoke of, we know that we produce gas in the country. The only thing you can say is that maybe it is not enough.
“Even if you say about 50 percent of your production cost is spent on gas prices, we still produce gas in Nigeria. It’s just that some of the manufacturers take advantage of the situation. As for the mining equipment that you mentioned, you buy equipment and it takes years and you are still using it,” he said.
Earlier, Rabiu Umar, the Group Chief Commercial Officer of Dangote Cement, attributed the hike in cement price to the high cost of gas and mining equipment. He acknowledged the current economic hardship faced by Nigerians and the popular belief that most of the raw materials to produce cement are available locally.
“While we have limestone and in some cases, we have gypsum and some cases coal, the reality is that it takes a lot of forex-related items to produce cement.”