On the heels of yesterday’s Federal Government’s agreement with cement manufacturers to reduce the high cost of cement from N13,000 and N11,000 respectively in the Northern and Eastern parts of the country and slightly cheaper in the Southwestern parts of the country, stakeholders have predicted the likely hood of incessant building collapse.
President, National Association of Block Moulders of Nigeria (NABMON), Prince Adesegun Banjoko, who spoke to The Nation on the rising cost of cement, said he is raising alarm for government to do the needful and save the nation from needless
He lamented that he is raising the alarm because one of the inevitable fall- out of this vicious trend is to be expecting very soon, a fresh wave of building and construction collapses and distresses attributable purely to the factor of ‘managing materials’ and ‘cutting corners’ as a result of high prices thereby leading to loss of lives and properties.
He said: “From available information cement presently sells between N7, 500 and N11, 000 per bag in some cities. In particular, reports from Ondo State confirm that a bag sells for N11, 000. Our government should braze up against the enemies of this nation making life unbearable for the common man.”
He called for the establishment of the Commodity Price Regulation Board and further asked the government to ensure that it commences work aggressively and effectively.
Banjoko urged the government to open our gates for both importation as well as more manufacturers of Cement to make the market competitive and make the price reasonable.
Commenting, President, Real Estate Developers Association of Nigeria (REDAN), Aliyu Wamakko said the rising cost of cement would worsen the country’s economy. He called on President Bola Tinubu to invite cement manufacturers for an urgent discussion to prevent further hardship for Nigerians.
Wamakko said there is economic hardship in the country and the upward trajectory of cement prices would exacerbate the already difficult situation for Nigerians, particularly those working in the real estate sector.
He said: “The price of ready-mix concrete will also be increased while the cost of in-situ production of concrete will rise significantly. Such an increment, if allowed to take place, will worsen the economic situation of the nation. When there is construction, there are multiple employment opportunities and it helps to reduce the poverty index of the country. But remember, because of no employment the resultant effect is banditry, kidnapping, armed robbery.
“The Federal Government should also remember that we have a 28 million housing deficit in Nigeria. Cement is an essential ingredient in the production of buildings. Frequency in the increase of its price has negatively impacted the nation’s housing sector. Experience has shown that high prices of cement tend to encourage a reduction in the quality of building production.”
Wamakko also warned that the government’s plan to introduce concrete roads could lead to a greater increase in the price of cement than imagined.
Speaking on the consequences of the rising cost, Wamakko said the government should take a long-term approach to address the recurring issue of cement price hikes by facilitating increased participation in the cement industry. He said it is unacceptable for Nigerians to pay more than N3,500 per bag of cement.
The REDAN boss called on the president to investigate the reasons for the price increases and to take action to ensure that “the promised price of N3,500 by a cement manufacturer is achieved”.
According to Wamakko, any further increase in the price of cement would be a direct threat to the ‘Renewed Hope’ agenda housing programme of the federal government.
“Cement is a major component in building construction, serving as a binder substance, hardens and adheres to other materials to bind them together,” he said.
He said Abdulsamad Rabiu, the chairman of BUA Group, had last year, announced the intention of his brand to reduce the ex-factory price of its cement to N3,500 beginning from January 2024.
“But the price has remained unchanged,” Wamakko added.
The association’s president said major retailers have kept on with the old prices ranging from N5,500 to almost N8,000 in major locations, as distributors claim to have old stocks while some blame the high prices on the cost of logistics
In addition, the price of a 50kg bag of cement has soared to around N9,500 in many retail outlets in Lagos further exacerbating the effects of inflation in the country.
The Nation investigations revealed that many retail shops in Lagos since January have risen from around N8, 000 to over N9,000 as of today.
The sporadic rise in the price of the product has made some retailers halt selling fearing they might see increased prices in the near future.
A cement retailer in Arepo, Ogun State who wished to remain anonymous told The Nation that he has stopped selling the product and is waiting for his distributor to provide the current price.
She said: “I stopped selling last week, my distributor has not given me a new market price. Another retailer lamented about the increase in the price on sales stating that there has been a significant drop in sales since January when the volatility in cement prices began.
According to her, “January and February is our peak sales period but everywhere is just quiet. N9000 for a bag of cement is too expensive and would discourage people from starting any project, BUA’s N3, 500 per bag was mere rhetoric.
On the most expensive brand, she said the increase in the price of cement cuts across major cement producers in Nigeria.
According to her Dangote cement on the average sold for N9, 500. On the other hand, BUA cement retailed for N9, 000 while some shops sold Elephant cement for N9, 500.
According to her, of particular interest is the increase in the price of BUA cement whose Chairman, Abdulsamad Rabiu had stated that the company will peg the price of BUA cement at N3,500 after a meeting with President Tinubu last year.
The increase in the price of cement syncs with a projection by Cardinal stone that stated that the price of cement will stay high in 2024 due to producers’ increased operational cost.
In its financial report for Q3, 2023, Dangote cement recorded an increase of 33 percent in operation expenses when compared to the previous year.
Federal Government’s use of concrete for road construction
An earlier statement by the Cement Producers Association of Nigeria had warned that cement prices may hit N9, 000 from around N5000 then over the federal government’s insistence on building roads with concrete.
Also, end users of cement in Benue State have decried the sudden increase in the price of the product from N5, 500 to N8,000.
According to Mr James Toryila, the astronomical increase in the price of cement is not genuine, stressing that sellers of the product only want to take advantage of the vulnerable economy to make huge profits.
“You cannot tell me that between last week and this week, the cost of producing cement increased to warrant this high price.
“What is happening to our economy is worrisome. The Nigerian economy has not been this bad,” Toryila said.
Also, Mr Simon Adzende, condemned the sharp increase in the price of the product, describing it as shocking.
Adzende said it would discourage low-income earners from embarking on any building project.
He called for the urgent intervention of the government, to save the country’s economy from total collapse.
Mr Oche Onah, who said that he bought the product at a particular rate of N7,500, lamented that the next day when he went back the price had jumped to N8,000 the next day.
