NIGERIA: Cement price escalates, as group faults import levy

CementThe price of cement, a premium building material in Nigeria, has risen in the open market with the price of a 50-kilogramme bag of the product rising from N1,500 in August to about N1,700, an increase of just over 13 percent.

The increase, according to some industry stakeholders, may not be unconnected with the recent 35 per cent levy imposed on the importation of the product by the federal government. Government had raised the import duties payable on cement to discourage importation and thus boost the local cement industry.

Meanwhile, a group of stakeholders in the cement industry has condemned the levy imposed by the federal government on the importation of cement into the country, eliciting fears that it  may hike in the price of the product, thus putting it out of reach of ordinary Nigerians.

The group, Building and Construction Stakeholders Industry Forum, in a statement signed by its coordinator, Mr. Celestine Emeka Onochie, wondered what the motive of the levy would serve.

The forum described the levy as outrageous describing the policy as sinister and dangerous and an attempt to muscle competition by a cabal of local manufacturers hell bent on profiting from their demise by deliberately hiking the price of cement.

“They will deliberately create scarcity of the product because they know that their local capacity cannot meet demands. Tell me where in the world does a government wake up one morning and impose a 35percent levy on the importation of a product as essential as cement, when its local manufacturers clearly don’t have the capacity to meet local demand. It is a sinister policy despite the fact that they make it look patriotic,” the group stated.

Some experts have described the move by government has a right step at the wrong time. According to the President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Bode Adediji, there ought to be an incubation period during which importation should be excused.

“Actually, government has to revisit that issue. In a situation where we have housing crisis, measures to ensure that prices of building materials come down should be the focus of government. For as long as we lack internal capacity to have adequate supply of cement, encouragement must be given to those who have the capacity to bridge the gap without compromising the interests of local investors.”

“The problem with the local industry is that it will take a long time for mega factories to germinate and be able to macro-produce. But I think that it will help if government rolls out incentives that will encourage more investors to go into local production. I think that there is really a lot to be done to encourage local investors to go into production of cement. Increasing import tariff on cement is doing it at the wrong time,” he stated.

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