The Federal Competition and Consumer Protection Commission (FCCPC) disclosed that its preliminary investigation has revealed a possible manipulation of cement prices in Nigeria. The three-month investigation by the Commission’s Anticompetitive Practices Department (ACP) was in response to widespread public complaints over the high cost of cement in the country.
Nigeria is blessed with abundant limestone found in about 14 states of the country, including: Sokoto, Gombe, Benue, Kogi, Edo, Oyo, Ogun, Cross River, Ondo, Plateau, Bauchi, Akwa-Ibom, Enugu, and Ebonyi states.
Limestone is a primary raw material for cement manufacturing. A 2024 report indicated Nigeria has about 10.6bn tons of limestone resources in these 14 states.
Despite the high deposit of limestone in Nigeria, the retail price of cement in the country is significantly higher than in neighbouring African countries. FCCPC’s inquiry raised concerns that prevailing market conditions may not fully explain the cost of the building material.
Price of Cement in Other African Countries
The preliminary investigation by the FCCPC’s team included a cross-border study, which revealed that the retail price of cement in these countries was as low as 76 per cent compared to Nigeria’s.
For context, the retail price of cement, according to the Commission’s investigation, was between N9,300 and N9.700 in January in Nigeria; between N10,500 and N13,000 by mid-year. By July, the prices rose to between N13,000 and N15,000.
In comparison, the price of cement in Togo is around N9,180; in Kenya, N7,344; and about N6,528 in Tanzania.
High Production Capacity, Low Consumption, Yet High Prices
The Commission’s survey indicates that Nigeria has cement production capacity of over 60 to 65 million tonnes annually, while consumption was less than half, approximately 25 to 30 million metric tonnes. The country is also a net exporter to neighbouring markets, yet has the highest retail price, while the neighbouring markets retail at a lower price.
Why Cement Price is High in Nigeria
When engaged, the industry stakeholders blamed the high cost in Nigeria on energy costs, Naira depreciation, which they claimed affected the cost of imported machinery and spare parts, as well as transportation and logistics costs, among others.
“The commission is testing these explanations against verified information on costs, production, pricing and market conditions. However, the weight of preliminary findings provides sufficient grounds for the investigation to continue,” the statement by the FCCPC said.
The FCCPC said the preliminary findings provided sufficient grounds to continue the investigation and determine whether cement prices were driven by legitimate costs or by anti-competitive practices.
The probe will examine possible coordinated conduct, abuse of market power, restriction of domestic supply, and anti-competitive distribution practices.
Why the FCCPC Is Investigating Cement Retail Price
The Nigerian market operates within a free-market system. While the Act establishing the FCCPC does not allow it to regulate prices of products and services, its legal framework allows it to promote fair competition, investigate anti-competitive behaviour, and prevent exploitative practices like price gouging and collusion.
“Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business,” the Commission said.
“When concerns persist about how such an important market is functioning, the Commission has a duty to look beyond assumptions and establish the facts.”
In a similar development, ConsumerPaddy in June reported that the FCCPC raised concerns about the price of petroleum in the country despite the global crash of crude oil prices.
