The challenges in the nation’s cement industry is linked to producers seeking to offset operational costs, volatility in the forex market, and high inflation.
The cost of a bag of cement has skyrocketed to ₦7,000 within three years indicating a 100% leap as Nigerians battle the biting inflation.
In 2021, the retail price of cement recorded in Lagos and Ogun states ranged between ₦3,300 and ₦3,500. As of last week, February 2024, the price was between ₦6,500 and ₦7,000 in both states.
Apart from the cement industry, the building material sector has been directly hit by the arbitrary increase in the cost of cement as noted in the prices of building blocks.
A check on the block moulding industry revealed the cost of a six-inch block has been increased from ₦450 to ₦500 while the price of a nine-inch block shot up from ₦550 to ₦600 per block.
A stakeholder in the block moulding industry and the President of Oriental Block and Concrete Producers Association, Enugu State, Igwe Ukaegbu, had linked the abrupt rise in the price of blocks to the continuous rise in cement price.
Uchegbu added that the increment negatively affected the associations’ production output and income. He further urged the FG to intervene in the situation by allowing more willing industrialists to obtain cement production licences as the increment has greatly affected the cost of new homes and rents thus worsening the economic situation.
The increase in the price of cement per bag also comes on the heels of the warnings issued by the Cement Producers Association of Nigeria against the FG’s plan to introduce concrete roads. The group warned that the plan will increase the price of cement to ₦9,000 per bag from the current price of ₦5,000.
While analysing the cement industry for 2024, an investment management firm, Cardinal Stone in a report titled, ‘Nigeria Cement Rebounding from a Tumultuous Year’ predicted high cement prices in 2024.
The report attributed the challenges in the nation’s cement industry to producers seeking to offset operational costs, volatility in the forex market, and high inflation.