Dangote Cement chairman blames energy costs, forex for high cement prices

The Chairman of Dangote Cement Plc, Emmanuel Ikazoboh, has blamed rising energy costs and the depreciation of the naira for the persistent high price of cement in Nigeria. A 50kg bag of cement now sells for between ₦9,500 and ₦13,000, putting pressure on homeowners, contractors, and developers nationwide.

Energy accounts for 60% of production cost

Ikazoboh spoke during the 17th Annual General Meeting (AGM) of Dangote Cement Plc in Lagos. He said energy remains the biggest cost component in cement manufacturing, accounting for about 60 per cent of total production expenses.

According to Ikazoboh, cement manufacturers rely heavily on gas, coal and diesel to power their operations. Gas, one of the key energy sources, is sold in United States dollars, exposing manufacturers to exchange rate fluctuations. He explained that the continued depreciation of the naira against the US dollar has significantly increased production costs, making it difficult for manufacturers to maintain lower prices.

"To produce a bag of cement, we need energy, which constitutes about 60 per cent of the production cost. To generate that energy, we use gas, coal or diesel," he said. "Gas is sold to us in US dollars, and its price continues to increase. We all know the impact of the exchange rate between the dollar and the naira. As a result, the cost of generating energy keeps rising."

Current retail prices across brands

Checks across major markets indicate that the retail price of a 50kg bag of cement currently ranges between ₦9,500 and ₦13,000, depending on the brand, location and individual dealer. Dangote Cement is currently sold for between ₦10,000 and ₦12,500 per bag in many parts of the country.

Meanwhile, BUA Cement and Lafarge Cement generally retail between ₦8,500 and ₦10,500, although prices differ across states due to transportation costs, dealer margins and proximity to manufacturing plants. In some remote locations, consumers may pay even higher prices because of increased logistics and distribution expenses.

Broader economic pressures at play

The sustained rise in cement prices has continued to affect homeowners, contractors and real estate developers, many of whom have expressed concern over the increasing cost of construction. Industry observers note that beyond energy expenses, factors such as inflation, transportation costs, exchange rate volatility and supply chain challenges have all contributed to higher retail prices nationwide.

Despite expectations that increased local production would help stabilise prices, manufacturers say macroeconomic pressures continue to weigh heavily on operating costs. For now, cement buyers across Nigeria are expected to continue paying between ₦9,500 and ₦13,000 per 50kg bag unless there is a significant improvement in exchange rate stability, energy costs and broader economic conditions.

What this means for the naira and consumers

The continued rise in cement prices directly impacts the cost of construction and housing across Nigeria. With the naira under pressure and energy costs tied to the dollar, manufacturers see no immediate relief. Until the exchange rate stabilises and energy costs ease, Nigerians should expect cement prices to remain elevated, further straining the housing market and construction sector.