The House resolution was after the adoption of a motion titled “Arbitrary increase in the price of cement by manufacturers of cement in Nigeria,” moved by the member representing Karu/Keffi/Kokona Federal Constituency in Nasarawa State, Mr Gaza Gbefwi, during plenary on Wednesday and member representing Shomolu Federal Constituency, Lagos State, AdemorinKuye.
Leading the debate at a session presided over by the Speaker, Abbas Tajudeen, Gbefwi argued that cement manufacturers have increased the price of the product by about 50 per cent, leading to sharp hikes in the prices of building blocks, the cost of building, and consequently rents across the country.
According to him, it is ironic that while the prices of raw materials used for the manufacturing of cement, especially lime, silica, alumina, iron oxide, and gypsum (all sourced locally) are not affected by the exchange rate volatility, the price of has cement continued to rise almost on a weekly basis.
Gbefwi also noted that the factors of production and elements of the cement production flow chart “are sourced locally and have not changed significantly year-on-year,” stressing that “cement manufacturers are capitalsiing on exchange volatility to arbitrarily increase the price of the product, whose cost of production has not changed significantly since last year.”
According to him, a small but powerful “cement cabal” is unconscionably inflicting hardship on Nigerians “As the prices of rent and associated services have increased.
In his contribution, a member representing Kanke/Pankshin/Kanam Federal Constituency, Plateau State, Yusuf Gagdi, wondered why Nigerians were being subjected to untold hardship by cement manufacturers, adding that “Nigeria cement is a big market for Niger Republic, Cameroon and other neighbouring countries.”
He said, “Why should Nigerians continue to suffer from incessant increases in the price of cement? We have a duty to rise up and defend the common man. I think it is important we invite the manufacturers to tell this house what is going on because we can’t continue like this.”
On his part, the Deputy Minority Whip of the House, George Ozodinobi, called for mass importation of cement into the country to force down the price.
The lawmaker who represents Njikoka/Dunukofia/Anaocha Federal Constituency, Anambra State said, “Let us open the floodgate of importation of cement into the country. This will bringdown the price of the product.”
Ozodinobi also recalled that when cement importation was the norm, the price was stable and affordable.
“When the man from Nnewi and Chairman of the Ibeto Group, Cletus Ibeto was given opportunity to bring in cement into the country, the price came down drastically but he was frustrated out of the system,” he lamented.
However, the duo of Sada Soli (APC, Katsina) and Babajimi Benson (APC, Lagos) called for caution, arguing that a number of factors come into play in determining the price of a product.
Soli urged the lawmakers to remember that Nigeria has become a net exporter of cement to other African countries and as such, manufacturers should be supported to hold on to their market lead.
“Let us understand the place of cost of production. These people bought these companies and turned them around. In most cases, they provide their own power. Let us be complacent when we are talking about issues concerning the national economy. Let us support these people because they can withdraw their investments,” he stated.
Following the adoption of the motion, the House summoned the manufacturers to appear before it in the next sectoral debate just as it mandated its committees on Solid Minerals Development, Commerce, Industry and Special Duties to investigate the arbitrary increase in the price of cement by manufacturers in the country and report back within four weeks for further legislative action.
Meanwhile, the Federal Government on Wednesday said the rising cost of production was responsible for the recent cement price hike, and not its concrete road policy.
It also explained that its insistence on concrete roads would not phase out traditional asphalt roads but is only an alternative for sites with high water tables and poor conditions.
“This assertion is highly misplaced because the policy has not even taken off,” said the Minister of Works, Dave Umahi, when he briefed State House Correspondents after Wednesday’s Federal Executive Council meeting at the Aso Rock Villa, Abuja.
His remarks follow warnings by the Cement Producers Association of Nigeria that the FG’s plan to introduce concrete roads would raise the price of cement from N5,600 to N9,000 per bag.
Fielding questions on the issue, Umahi cited recently released documents showing that Dangote Cement Plc, BUA Cement Plc and Lafarge Africa Plc spent N598.14bn on power during the full year ended December 31, 2023.
He explained, “I just got a document this morning where three companies producing cement, Dangote, BUA and Lafarge, said in 2023, the total cost of their gas rose by over 42 per cent. So, if the cost of their gas rose by 42 per cent and then the import duty exchange rate has also gone up, it is expected that the cost of cement would go up.”
“But Mr. President has discussed with them and I think there are a couple of incentives being made available to them which should reduce the cost of cement. In Sokoto, where I visited recently, the BUA Executive Director said that the ex-factory was N6000. And that was down from 8000. We are getting there because Mr. President has directed them to reduce the price and they have to comply and I think Mr President has also offered them some incentives to them.
“So it’s not because we are going from asphalt to concrete. And we are not totally leaving the asphalt. It is just an alternative, especially where we have a very high water table and then a very poor sight condition.”