By Andy Asemota
To ensure that the Procurement Plan of the Federal Government in the 2021 Appropriation Act is saved from imminent collapse over the recent increase in prices of cement, the Senate has urged the government to assist the producers in the country.
The resolution followed the motion sponsored by Senator Oyelola Yisa Ashiru and five others on Tuesday on the need for liberalization of cement policy in Nigeria in the wake of the increase in the price of cement from N2600 to N3800.
The Red Chamber resolved that the government should provide more industrial incentives and industrial protection ranging from concessionary loans to larger tax incentives for new entrants in order to boost production of cement, reduce price and encourage more valuable producers in Nigeria.
The Upper Chamber observed that the price of cement was having ripple effects on the economy as it had “slowed down the amount of construction work being embarked upon thus negatively affecting labor engagement and almost collapse the Procurement plan of the government.”
Further negative consequences of high prices on the economy if the status quo persists, the Senate learned, would outweigh the benefits of producing cement locally.
The lawmakers also stressed the urgent need to encourage more local production of cement to satisfy the demands of Nigeria with a steady growth rate of 3% per annum; a housing deficit of 30 million units and less engagement of over 10.5 million workforces of the building and construction industry.
Nigerians lament scarcity, high cost of cement
They observed that the Nigerian oligopolistic cement market with three players: Dangote Cement (60.6%); Lafarge Africa PLC (21.8%) and BUA Group (17.6%) largely dominating the scene had made it susceptible to price-fixing practices.
As of 2018, the Senate heard, the installed capacity of cement producers was about 47.8MMT which is far above the estimated (2018) consumption of about 20.7MMT yet the prices of cement in Nigeria (N380) is about 240% higher than the global average.
