The Joint Committee of the House of Representatives is currently investigating the surge in cement prices across Nigeria. Major industry players, such as Dangote Cement Company and Lafarge Africa PLC, have been asked to provide detailed documentation of their production costs to justify the current market prices.
Led by Chairman Rep. Jonathan Gaza (APC-Nasarawa), the committee plans to visit the production plants of these companies after reviewing their financial records. The objective is to understand the cost of production and establish a fair price for cement for Nigerians.
During a public hearing in Abuja on Friday, Gaza emphasized the committee's interest in examining production costs from 2020 to the present. This scrutiny aims to understand the reasons behind the cement prices exceeding N10,000 in various regions of the country.
The committee has requested comprehensive information from the companies, including:
- Average daily consumption of coal, gas, gypsum, limestone, clay, and laterite.
- Average daily production of cement from 2020 to the present.
- Details of imported and local components for cement production, including costs in both naira and dollars.
- A summary of monthly prices and quantities of cement produced from 2019 to date.
- Audited accounts, bills of lading, and customs duties paid during the reviewed period.
- Any tax waivers and other incentives received.
- Contracts for gas and explosives
Rep. Dabo Ismail (APC-Bauchi State), a committee member, highlighted that Dangote Cement Company continues to make substantial profits despite sourcing most of its raw materials locally. He noted the company’s declared profits: N524 billion in 2022, N553 billion in 2023, and N166.4 billion in 2024. He questioned the rationale behind the rising cement prices, which are causing hardship for Nigerians while producers continue to profit.
Arvind Pathack, Group Managing Director of Dangote Cement Company, responded by explaining that 95 percent of production costs are either imported or linked to foreign exchange. He cited significant increases in the prices of key input materials, including gas, AGO, gypsum, imported coal, spare parts, new trucks, and tyres, with prices rising by 100 to 333 percent.
Pathack pointed out that the company pays in dollars for some contracts to access gas and explosives due to insufficient provision by the Central Bank of Nigeria (CBN). He also mentioned logistics issues, such as poor road conditions, which increase delivery times and truck maintenance costs.
Pathack highlighted the challenges posed by a lack of sufficient forex to settle trade obligations, resulting in annual forex losses of N150 billion and a 30 percent interest rate on loans. He noted the over 220 percent devaluation of the naira between May 2023 and June 2024, along with issues like insecurity and inadequate public power supply.
He clarified that while cement is sold at an average cost of N7,200, any price over N10,000 is due to retailers, not the company. He compared cement prices across Africa, showing that Nigeria’s price is among the lowest.
The committee urged cement producers to review their policies and operations to reduce prices. Chairman Rep. Jonathan Gaza expressed hope that the engagement would lead to a price reduction, attributing the high prices to the Federal Competition and Consumer Protection Commission's (FCCPC) inaction.
“We are extremely hopeful that this engagement will lead to a reduction in the price of cement. FCCPC has slept on their functions so far; their inactivity and non-responsiveness to price is what has put Nigeria where we are today,” Gaza stated.
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