Cement producers have agreed to sell a 50kg bag of cement for between N7,000 and N8,000 at shops across the country.
However, the manufacturers said the price drop from the current market price would be reliant on the implementation of specific government measures to address critical industry challenges.
Dave Umahi, Minister of Works, announced after an interview with leading cement producers on Monday in Abuja that Nigerians would feel the impact in 30 days.
The meeting was held against the backdrop of the commodity's price hike to around N13,000 in several retail stores in the federal capital territory and Enugu, indicating the impact of inflation in the country.
However, at the meeting called by President Bola Tinubu, Umahi criticized the present rate, claiming that it's abnormal and detrimental to the financial stability sought by the present government.
Following a three-hour discussion, the minister read the communique, stating that particular issues such as smuggling, bad roads, expensive electricity, and the forex crisis contributed to the high prices, but highlighted that manufacturers have expressed the desire to lower prices in the future.
He stated, "The meeting thoroughly addressed the current cement prices in relation to the difficulties posed by manufacturers. They discussed their challenges, including high gas prices, prohibitive import taxes on spare parts, a poor road network, and, of course, a high foreign exchange rate.
"They additionally addressed the issue of cement across our borders, and the way it is causing scarcity and rapid increase. We agreed that the trade ministry would seek remedies from the president regarding the price of gas, import duties, and the repair of roads within distribution corridors.
"The cement manufacturer and the government have jointly noted that the elevated price of cement in the market is out of the ordinary in some areas across the country. Ideally, they stated that the cement price and the cost to a consumer should not exceed N7,000 to N8,000 per 50 kg bag of cement.
"As a result, government agencies and cement manufacturers Dangote Plc, BUA Plc, and Lafarge Plc have agreed to set their cement prices nationwide between N7,000 and N8,000 naira per 50 kg pack of cement, based on location, implying that this price varies by location. Going forward, the government advised manufacturers to set up a price monitoring mechanism to ensure that consumers pay today's prices, and manufacturers have willingly agreed to undertake so, in addition to sanction any distributors or retailers found to be in breach."
He stated that the government expects the agreed-upon price to fall as a result of interventions aimed at addressing manufacturers' worries regarding gas, duties on imports, smuggling, and improving the road network.
The meeting ended with a promise to meet again in 30 days to assess progress made.
Doris Uzoka-Anite, Minister of Industry, Trade, and Investment, stated during her remarks that the government is dedicated to working with industries to eliminate bottlenecks and promote efficient operations.
"As a government, we are going to keep working with industries to deepen our involvement and remove bottlenecks to ensure that operations run smoothly and that the advantages of the backwards integration program are enjoyed and felt by all citizens.
"Nigeria has not imported cement since 2012 and there is no reason why we ought to be experiencing the kind of issues we are having in cement pricing," the minister said.
BUA Pledges Six Million Tons to Increase Supply.
Kabiru Rabiu, the Group's Executive Director of BUA, revealed the company's plans to supply six million tons of cement into the market in order to offset rising prices.
He also stated that cement continues to be carried by fraudulent retailers because the price is the lowest in the region, making it prone to smuggling, adding that this activity does not go through official channels and does not help the government.
"BUA has committed to bringing in a further six million tonnes of cement in the following weeks, which will significantly alleviate supply pressures. We will remain committed to these engagements and reassemble in 30 days."
"The price of cement in neighboring nations has made smuggling profitable. The cost in Chad and Cameron is around N15,000 per bag, and we have noticed that distributors smuggle products into neighboring countries. They do this outside of official channels, and the federal government gets nothing from their exports. Unless this issue is resolved, we are going to continue to face pressure from these markets.
"There is an important disparity
between demand and supply in Nigeria." I believe certain facilities have
issues that have reduced production. We are at the peak of cement demand, but
supply appears to be low, which means there will be a crisis, which is why we
are working hard to bring additional goods to the market to relieve the
market's demand and supply pressures," he concluded.
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