Cement price surge deepens Nigeria's housing crisis, builders warn

Building sector operators have warned that erratic increases in cement prices are worsening Nigeria's housing crisis by pushing up construction costs, property values and rents. A 50kg bag of Dangote Cement now sells for over N15,000 in some locations, even as the Federal Competition and Consumer Protection Commission investigates possible price hikes in the industry.

Operators demand urgent market intervention

The operators, speaking in separate phone interviews with The PUNCH, called for urgent action in the cement market. They want the FCCPC to conclude and publish its investigation, encourage greater competition among manufacturers, and act against suspected cartels and market abuses.

Amusan Oluseyi, Principal Partner at Space Button Architecture Limited, said the increase was hard to justify given Nigeria's large limestone deposits and cement production capacity.

“It is quite difficult to clearly explain why the cost of cement is rising at such an alarming rate in parts of Nigeria, especially since our nation possesses large quantities of limestone resources with an established cement production capacity estimated between 60 and 65 million metric tonnes annually, while domestic consumption is estimated between 25 and 30 million metric tonnes,” Amusan said.

He urged the FCCPC to take decisive steps to protect prospective homeowners.

“In my view at this point, it is very important for the Federal Competition and Consumer Protection Commission to take decisive measures to ease the situation, especially for individuals who intend to change status from tenants to landlords,” he said.

Amusan warned that the price volatility had spread beyond construction costs to the wider housing market.

“This erratic surge in cement market price has impacted the housing sector negatively by increasing the cost of construction, value of housing and rents,” he said.

Disagreement over cause of price spike

But Soji Adeniji, Chairman of the Lagos Chamber of Commerce and Industry's Engineering and Construction Group, attributed the latest spike largely to temporary scarcity rather than any official price increase by manufacturers.

“The prices have not gone up. So what people experienced then was like a brief moment of scarcity,” Adeniji said.

He linked the scarcity to recent plant maintenance by Dangote Cement and access restrictions at some material depots. He said improved supply should ease the situation.

“I believe the issue is that Dangote Cement recently finished their plant maintenance, and they've just resolved the issue of accessibility to their material sites, so I guess between this week and next week, we should be having enough product in circulation,” he said.

Adeniji described current prices as artificial, saying inadequate supply had allowed distributors to impose arbitrary margins.

“For me, I think the price we have now is artificial. Just because of demand and supply, this thing is playing out. Because of insufficient quantities, then people are putting arbitrary figures on it. Once they flood the market again, prices will definitely come down,” he said.

He said he had received no official notification from Dangote Cement announcing a new price.

“I've not received any official notice from Dangote themselves to say that the prices are going up. For me, whatever we are seeing now, it's not directly from Dangote; it's induced, but we cannot attribute it to changing prices because the price has not been officially announced,” Adeniji said.

Production and distribution costs under pressure

John Agbezin, Public Relations Secretary of the Nigerian Institute of Quantity Surveyors, identified energy, foreign exchange, logistics, security and multiple taxes as key factors driving cement costs.

He said the removal of fuel subsidy and energy price volatility had significantly raised production costs.

“Energy, diesel, gas, they all use all these things to run their plants. And of course, with fossil fuel removal and the effects of volatility, energy costs are doubled,” Agbezin said.

He added that imported inputs and forex pressures also affected locally manufactured cement.

“When you look at the diesel additives and coal, all these things are forex-dominated. So, even though Dangote is local, all these products that they import actually contribute to the expenses too,” he said.

Agbezin also cited poor roads, insecurity and longer haulage routes as factors increasing distribution costs.

“If a guy is travelling with his truck, instead of him passing a road that will take him less than three hours, he has to go and pass another road that will take him six hours because he avoids the hotspots. Those are very, very big factors that can add as much as N3,000 for a bag,” he said.

He raised concerns about supply shortages amid strong demand from major infrastructure projects.

“There is too much demand and less supply. There is no way to not have an increase. A lot of projects are going on anyway. For example, the coastal roads, I know a lot of suppliers that they will tell you they don't have products. But that coastal road, they are always going there because they know that they will get paid,” Agbezin said.

What it means for consumers and businesses

With cement prices staying elevated, building operators warn that more Nigerians will find it harder to own homes. Construction costs are already rising, and rents are following. The FCCPC's investigation and any move to boost competition will determine whether prices ease or remain a fresh burden on the housing market.