It is unacceptable for Nigerians to buy cement at N1, 800 per bag instead of N500 per bag in countries that have attained self sufficiency and are net exporters of cement.
We challenge the Cement Manufacturers Association of Nigeria (CMAN) to stop the baseless information fed to the federal government and people of Nigeria that the nation has attained self-sufficiency in cement production and that Nigeria has become a net export of cement. This is not true.The cement produced in Nigeria is under 50 percent of the nations requirements.
The misleading information by CMAN to the Federal Government has resulted in driving the price of locally manufactured cement from N500 per bag to N1,800 per bag, as the federal government has been prompted to push up the duty and levy on cement import to 35 percent. Add other import bills associated with NPA and NMA, imported cement attracts a total of 45 percent dues on imported cement.
The government suspended all already granted cement import licenses such that manufacturers can sell their cement at N1,800.
As at today, there is only one cement license holder in the name of Ibeto cement that is importing cement. This is because they took Federal Government to court and obtained judgment in their favour. This allows Ibeto to import cement till 2017. While others have withheld action against the federal government for the political reason of allowing President Goodluck Jonathan to succeed.
The action of CMAN has shut the doors to other players into the industry blocking competition in the industry which has led to poor quality of the product leading to collapse building and loss of lives as lamented by the coalition of civil society groups and professional bodies in the construction industry as published in front pages of several national dailies including the Guardian and The Nation newspapers.
The late President Musa Yar’Adua considered in his wisdom acknowledge the importance of cement to the economy that was why he decided to grant cement import license to 6(six) new entrant each from a geo-political zone of the Federation.
Madewell Cement, Reagan Cement, Minag Cement, Bua Cement, Nicca Cement and Lababidi, to force down the price of the product to N1,000 per bag during the brief period of his regime. We pray his immediate predecessor in office whose Vice-President then was President Goodluck Jonathan should as a matter of necessity should revalidate the utilizedcement import licenses.
He should make wide consultation by looking beyond the boasting by a single manufacturer claiming import of 5,000 trucks to bring down the price of cement to N1,000 per bag which never happened, when the total numbers of its road worthy trucks are less than 1,000 units.We think it is time the President revalidates the all suspended licenses to bring down the price of cement to N1,000 it was selling during the late President Yar’Adua’s regime with duty and vat at 5% and 10%.
It is strange for a group to deceive the Federal Government to believe that Nigeria has attained self sufficiency in the cement production when the product is selling for above 100% and 150% as it is sold in other Countries that have attained sufficiency like China, Taiwan, Turkey, India, Mexico, Spain, Greece, Romania, Norway etc. where cement is sold at N500 per bag of cement. It is a known fact by Nigerians and indeed the whole World that the cement industry in Nigeria is mortgaged to a Cabal.
This is a threat to the economy as cement being an essential commodity should not be left in hands of few tilting toward monopoly because it could pose a great danger to the country as few individual could hold the nation to ransom.
It is in the best interest of the nation to allow other players to come into the industry as foreigners and local players are interested to invest in the cement industry are staying back as government is doing nothing to attract investors into this sector as the cement policy is in direct favour of a single group giving no room for competition, price affordability and guaranteed quality as India alone has about 154 cement factories.
As things are, no new entrant can approach the Nigeria Stock Exchange for long term fund for a Greenfield cement project as they will tell you that there is a glut in the market already. The reason behind late President Yar’Adua granting license to new entrants was to encourage them to progress into producing cement over 3-4years of cement import as in the case with those now blocking others they having enjoyed same privilege for more than 4years.
The issue of cement quality is associated with standard set by the British Standard Specification (BSS 12/197842.5R/N as the acceptable quality which was adopted by Nigeria and anything short of this quality such as 32.5R/N as disclosed by the Coalition of Civil Society Group is a crime against cement users in Nigeria.
During the late President Yar’Adua cement import license regime, our members imported CEM I which is even a higher grade than CEM II which brought local manufacturers to their toes as there was no more room to supply low quality cement which led to heavy media campaigns against the then Minister of Commerce and Industry Engr. Charles Ugwu who recommendation to Mr. President the need for cement import. Sponsored by CMAN and the Cabal which led to his abrupt removal. Japan with the highest cement quality in the World will never comprise quality and Nigeria should emulate by setting good standard.
The major determinant of cement quality is limestone and the quality of clay used in the right proportion and most importantly strict adherence to the 5% gypsum content as recommended by the British Standard Specification for Ordinary Portland Cement.
Owing to the high price of this raw material which is imported from Spain and Brazil, manufacturer tends to compromise quality by reducing the content to as low as 3% to make more profit at the expense of unsuspecting consumers. This will quicken the drying time for block molders’ but every good quality cement with required 5% gypsum will have a slow but standard setting period of about 27days as gypsum is the hardener ingredient and responsible for the strength of cement.
If gypsum content is reduced from 5% to 4%, 3% and 2.5% all you get is poor quality cement that will obviously lead to collapse building. This can only happen where there is near monopoly situation where consumers have no choice but to buy the only brand in the market whether the quality is good or poor.
The Cement Manufacturers are deceiving Nigerians when they say Nigeria is a net exporter of cement. There is not a single country near Nigeria like Republic of Benin, Togo, Ghana, Liberia, Cameroon where cement is sold above N1,000 per bag. Can the manufacturer give name of the Country that is importing cement from Nigeria where cement price is as high as N1,800 per bag before paying road transportation cost and duty in such countries?
The Federal Government need to revalidate unutilized cement import licenses to encourage new entrants and make the price of the product affordable and also guarantee quality of the product to meet the 17,000,000(seventeen) million housing deficit of the country and give room for healthy competition among players in the cement industry.
•Iweta is Chairman-Cement Producers Association of Nigeria (CPAN), President-Sapele Chamber of Commerce and Deputy-President-South-South Chambers of Commerce
