Reps to Question Dangote, BUA, Others over Cement Price Hike 

Reps to Question Dangote, BUA, Others over Cement Price Hike 

House Representatives has invited cement manufacturers including Dangote Cement and BUA Cement to appear before them for deliberations on ways to mitigate the hardship arising from high cement prices.

The House resolution was sequel to the adoption of a motion titled “Arbitrary increase in the price of cement by manufacturers of cement in Nigeria,” moved by the member representing Karu/Keffi/Kokona Federal Constituency in Nasarawa State, Mr Gaza Gbefwi, during plenary on Wednesday and member representing Shomolu Federal Constituency, Lagos State, Ademorin Kuye.

Leading the debate at a session presided over by the Speaker, Abbas Tajudeen, Gbefwi argued that cement manufacturers have increased the price of the product by about 50 per cent, leading to sharp hikes in the prices of building blocks, the cost of building, and consequently rents across the country.

According to him, it is ironic that while the prices of raw materials used for the manufacturing of cement, especially lime, silica, alumina, iron oxide, and gypsum (all sourced locally) are not affected by the exchange rate volatility, the price of has cement continued to rise almost on a weekly basis.

Gbefwi also noted that the factors of production and elements of the cement production flow chart “are sourced locally and have not changed significantly year-on-year,” stressing that “cement manufacturers are capitalsiing on exchange volatility to arbitrarily increase the price of the product, whose cost of production has not changed significantly since last year.”

According to him, a small but powerful “cement cabal” is unconscionably inflicting hardship on Nigerians “As the prices of rent and associated services have increased.

In his contribution, a member representing Kanke/Pankshin/Kanam Federal Constituency, Plateau State, Yusuf Gagdi, wondered why Nigerians were being subjected to untold hardship by cement manufacturers, adding that “Nigeria cement is a big market for Niger Republic, Cameroon and other neighbouring countries.”

He said, “Why should Nigerians continue to suffer from incessant increases in the price of cement? We have a duty to rise up and defend the common man. I think it is important we invite the manufacturers to tell this house what is going on because we can’t continue like this.”

On his part, the Deputy Minority Whip of the House, George Ozodinobi, called for mass importation of cement into the country to force down the price.

The lawmaker who represents Njikoka/Dunukofia/Anaocha Federal Constituency, Anambra State said, “Let us open the floodgate of importation of cement into the country. This will bringdown the price of the product.”

Ozodinobi also recalled that when cement importation was the norm, the price was stable and affordable.

“When the man from Nnewi and Chairman of the Ibeto Group, Cletus Ibeto was given opportunity to bring in cement into the country, the price came down drastically but he was frustrated out of the system,” he lamented.

However, the duo of Sada Soli (APC, Katsina) and Babajimi Benson (APC, Lagos) called for caution, arguing that a number of factors come into play in determining the price of a product.

Soli urged the lawmakers to remember that Nigeria has become a net exporter of cement to other African countries and as such, manufacturers should be supported to hold on to their market lead.

“Let us understand the place of cost of production. These people bought these companies and turned them around. In most cases, they provide their own power. Let us be complacent when we are talking about issues concerning the national economy. Let us support these people because they can withdraw their investments,” he stated.

Following the adoption of the motion, the House summoned the manufacturers to appear before it in the next sectoral debate just as it mandated its committees on Solid Minerals Development, Commerce, Industry and Special Duties to investigate the arbitrary increase in the price of cement by manufacturers in the country and report back within four weeks for further legislative action.

Meanwhile, the Federal Government on Wednesday said the rising cost of production was responsible for the recent cement price hike, and not its concrete road policy.

It also explained that its insistence on concrete roads would not phase out traditional asphalt roads but is only an alternative for sites with high water tables and poor conditions.

“This assertion is highly misplaced because the policy has not even taken off,” said the Minister of Works, Dave Umahi, when he briefed State House Correspondents after Wednesday’s Federal Executive Council meeting at the Aso Rock Villa, Abuja.

His remarks follow warnings by the Cement Producers Association of Nigeria that the FG’s plan to introduce concrete roads would raise the price of cement from N5,600 to N9,000 per bag.

Fielding questions on the issue, Umahi cited recently released documents showing that Dangote Cement Plc, BUA Cement Plc and Lafarge Africa Plc spent N598.14bn on power during the full year ended December 31, 2023.

He explained, “I just got a document this morning where three companies producing cement, Dangote, BUA and Lafarge, said in 2023, the total cost of their gas rose by over 42 per cent. So, if the cost of their gas rose by 42 per cent and then the import duty exchange rate has also gone up, it is expected that the cost of cement would go up.”

“But Mr. President has discussed with them and I think there are a couple of incentives being made available to them which should reduce the cost of cement. In Sokoto, where I visited recently, the BUA Executive Director said that the ex-factory was N6000. And that was down from 8000. We are getting there because Mr. President has directed them to reduce the price and they have to comply and I think Mr President has also offered them some incentives to them.

“So it’s not because we are going from asphalt to concrete. And we are not totally leaving the asphalt. It is just an alternative, especially where we have a very high water table and then a very poor sight condition.”

Meanwhile, the minister disclosed the Council’s response to the memoranda he presented at the meeting. This includes the approval of an additional N757bn as augmentation for the dualisation of the 489km Obajana-Benin Road, N2.23bn for the Isheri-Ogun Road and N114bn for Outer Marina shoreline protection.

He explained, “Today we’ve got augmentation approved for Obajana in Lokoja to Benin Road, a total of 244km and 489km dualized. Recall that in 2012, this project was awarded to four contractors: CGC, Mothercat, Dantata & Sawoe and RCC at a total cost of N122bn, and that was for light rehabilitation.

“Around 2018, the past administration reviewed the project and dualised it and that’s why you have a total of 489km and then now got ‘No Objection’ from BPP. When I came on board in August, we were supposed to present the no-objection to FEC in line with due process and we decided to review the project, one, to determine whether the dualisation was desirable in view of the economic challenges and two, to see the texture of the soil and what to do.

“So we had to restore the project now, but we didn’t increase the cost. We got approval for argumentation from N122bn to N897bn. The contractors were off-site because they would not be working and they would not be paid based on the new basic rate. So we got them back to the site and Today we got approval.”

The Council also approved N2.23bn for the Federal Roads Maintenance Agency for the rehabilitation of the road from Isheri North to Ogun state.

“Now, under FERMA, we got approval for the construction of Isheri north, Lagos route, which is to connect Ogun state. This is an alternative route to Lagos – Shagamu Road and we’re going to toll this Lagos-Shagamu when completed. But by law, you only toll a federal road when you have an alternative.

“This approval of about N2.23bn to connect Isheri North to Ogun State, is a breakthrough that has freed the Lagos-Shagamu for tolling,” he revealed.

Explaining the Council’s approval for the N114bn Outer Marina shoreline protection, Umahi said, “The shore protection was done over 50 years back with sheet piles and we had to take the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on a tour with Julius Berger through the entire shoreline of 3.92km.

“We took the tour with Julius Berger, CCECC, CBC and BuildWell, and demanded for them to inspect and then give us their proposal. Only BuildWell and CCECC brought their proposals.

Whereas CCECC was quoting on 3.2km at N134bn, BuildWell was quoting on 3.9km at N114bn. We sent the two to BPP and BPP found merit in BuildWell because of cost and, of course, latest technology in doing shore protection using interlocking concrete, which will not be subject to rusting. So we got approval for Build Well in the sum up N114bn.”

Umahi said the shoreline protection project was necessary given its proximity to the recently inaugurated Red Line and other existing structures in the area. He added that his ministry sought to leverage the low-water levels of the dry season to drive piles down the shore.