The Federal Competition and Consumer Protection Commission (FCCPC) has launched a fresh investigation into Nigeria’s cement industry over concerns that the soaring price of the building material may be linked to anti-competitive practices.
The commission said its preliminary findings from a three-month investigation suggested “possible manipulation of prices of cement” despite Nigeria’s huge limestone deposits and substantial cement production capacity.
The probe was conducted by the FCCPC’s Anticompetitive Practices Department following widespread complaints over the rising cost of cement.
The commission compared Nigeria’s cement market with those of Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo, examining production capacity, consumption, population, limestone availability and retail prices.
According to the FCCPC, Nigeria has an installed cement production capacity of between 60 million and 65 million metric tonnes annually, while domestic consumption stands at about 25 million to 30 million tonnes.
Despite the reported excess capacity, the commission said cement prices had continued to rise sharply.
It noted that a 50kg bag, which sold for between N9,300 and N9,700 in January, increased to between N10,500 and N13,000 by mid-year and reached N13,000 to N15,000 in some parts of the country by July.
The FCCPC said its findings also showed that cement was cheaper in some other African countries.
A 50kg bag reportedly sold for about N7,344 in Kenya and N6,528 in Tanzania, while the price in Togo was about N9,180 despite the country having no limestone deposits.
The commission said the price differences raised questions about why Nigeria’s production capacity and access to raw materials had not translated into lower domestic prices.
Industry operators have attributed the rising prices to factors including high energy costs, naira depreciation, increased costs of imported machinery and spare parts, transportation and logistics.
However, the FCCPC said it was verifying those explanations against actual production costs, pricing data, capacity utilisation and other market conditions.
The commission said the investigation would determine whether the prevailing prices were justified by legitimate costs or were being influenced by unlawful practices.
It is also examining possible coordinated conduct, abuse of market power, restrictions on domestic supply and anti-competitive distribution practices.
The FCCPC has consequently issued Notices of Commencement of Investigation and Summons to Produce to key players in the industry, requesting documents and records relating to pricing, production, capacity utilisation, exports and commercial dealings.
The commission’s Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said the investigation was necessary because cement plays a critical role in the economy.
“Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business,” Bello said.
He added that the investigation was not intended to prevent companies from making legitimate profits, but to ensure that competition in the sector remained fair.
The FCCPC said the investigation is ongoing and will determine whether further regulatory action is necessary.
The development comes amid rising construction costs in Nigeria, with increasing cement prices placing additional pressure on housing development, infrastructure projects and Nigerians seeking to build homes.
