• Cement producers accused of price gouging – Expert
• “They must reduce prices” – Minister
The rising profits declared by Nigeria’s major cement manufacturers—Dangote Cement, BUA Cement, and Lafarge—amid severe economic challenges have sparked widespread criticism, Business Hallmark reports.
Many Nigerians have questioned how cement producers continue to thrive with significant profit margins while other sectors in the manufacturing industry struggle under inflation, high energy costs, weak consumer demand, and rising production expenses.
Despite the country’s economic downturn, characterized by currency devaluation, credit crunch, high interest rates, and declining industrial output, cement companies have maintained an upward trend in revenues and dividends.
A report by the National Bureau of Statistics (NBS) indicates that Nigeria’s manufacturing sector grew by just 1.38% in 2024, reflecting worsening macroeconomic conditions and dwindling consumer spending. The sector’s contribution to the country’s GDP also dropped from 8.64% in 2023 to 8.21% in 2024.
Manufacturing Sector in Crisis
Speaking on the challenges facing manufacturers, the President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye, lamented the sector’s struggles with foreign exchange volatility, high inflation, multiple taxes, and security issues. He noted that while many companies have shut down or scaled back operations, cement producers remain unaffected, consistently declaring record profits.
Despite the economic challenges, major cement companies have continued to raise their product prices, further increasing their revenues. Reports show that Nigeria’s top three cement producers—Dangote, BUA, and Lafarge—recorded a combined post-tax profit of ₦677.48 billion in 2024, a 17.6% increase from ₦575 billion in 2023.
Individually, Dangote Cement led the pack with ₦503.4 billion in profit after tax, followed by Lafarge at ₦100.1 billion and BUA Cement at ₦73 billion.
Cement Price Hikes and Public Outcry
Analysts attribute the industry’s profitability to its ability to implement multiple price hikes. In 2024 alone, cement manufacturers reportedly increased prices four times, with a 50kg bag of cement rising from ₦4,200 in January to between ₦8,000 and ₦9,000 by November—a near 100% hike.
Unlike other manufacturing sectors struggling to balance pricing and market competition, cement producers have maintained steady profit growth, partly due to the government’s shift to concrete roads, which has increased demand for their products.
A member of the House of Representatives Committee investigating cement pricing alleged that manufacturers continued to make abnormal profits despite sourcing most of their raw materials locally. The lawmaker questioned why cement prices kept rising while producers reaped record revenues.
Government Calls for Price Reduction
During an inspection of federal road projects, the Minister of Works, David Umahi, criticized the high cost of cement, urging manufacturers to reduce prices from ₦9,500 to ₦7,000. He argued that with the recent stabilization of the naira, the industry’s claims of foreign exchange pressure no longer justify the soaring prices.
“The cost of petrol is coming down, and the President’s policies are working. The dollar has drastically reduced. Cement producers must do the right thing,” Umahi stated.
Prince Adesegun Banjoko, President of the National Association of Block Moulders of Nigeria (NABMON), called on the government to regulate cement prices and break the alleged price-fixing cartel in the industry. He also suggested reopening the borders for cement importation to introduce competition and lower prices.
Brand expert Pascal Ideye accused cement manufacturers of engaging in price gouging, saying, “They have formed a cartel to manipulate cement prices, exploiting consumers under the guise of rising production costs.”
With Nigerians facing economic hardship, calls are mounting for authorities to intervene and prevent cement manufacturers from profiting at the expense of consumers.