Senate Moves To Break Dangote's Monopoly Of Cement Production

Harboursandport.com: Lagos -As a means of breaking the near-monopoly of Dangote Group for the production of cement, the Senate has called on the Federal Government of Nigeria to provide more industrial incentives and industrial protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cement, reduce price and encourage more valuable producers in Nigeria. 

 

According to the Senate, the Federal Government should introduce liberal policies such as the provision of industrial and larger tax incentives to encourage local investments in cement production in Nigeria, adding that with this, it would, besides attracting local investors, boost the production of cement as well as reduce its price in the market.  

 

Resolutions of the Senate were sequel to a motion titled: “Need for Liberalization of Cement policy in Nigeria”, sponsored by Senator Oyelola Ashiru, All Progressives Congress, APC, Kwara South and co-sponsored by five other Senators. 

 

The Senators are Muhammad Enagi Bima (Niger South); Adelere Adeyemi Oriolowo (Osun West); Samuel Egwu (Ebonyi North); Kabiru Gaya (Kano South); and Michael Nnachi (Ebonyi South)

 

Presenting the motion, Senator Ashiru who  noted that Cement is one of the few building materials in which Nigeria is self-sufficient observed that “as of 2018, 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 percent higher than the global average;

 

“Cognizant that Cement takes a large share of domestic expenditure, and the price of each commodity significantly impacts the government’s ability to provide much-needed infrastructural works required for the growth of our economy; 

 

“Further cognizant that the recent increase in the price of Cement ( from N2,600- N3,800) slowed down the amount of construction work being embarked upon thus negatively affecting labour engagement and almost collapsed the procurement plan of the governments in 2020 Appropriation Act; 

 

“Mindful that the Nigerian cement market is oligopolistic in nature with three players (Dangote Cement (60.6 percent); Lafarge Africa Plc (21.8 percent), and BUA Group (17.6 percent) largely dominating the scene therefore making it susceptible to price-fixing practices; 

 

“Convinced that if the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally; 

 

“Worried that the significant rise in cement prices in the country and the low purchasing power of Nigerians may result in a substandard building constructions and non-completion of planned infrastructural works; 

 

“Strongly believes that there is an urgent need to encourage more local production of cement to satisfy the demands of Nigeria with a steady growth rate of approximately 3 percent per annum; a housing deficit of 30 million units and less engagement of over 10.5 million workforce of the building and construction industry; and 

 

“Further strongly believes that unfavourable government policies such as the imposition of multiple taxes, erratic power supply, a government ban on importation in violation of ECOWAS Trade liberalization Scheme (ETLS) and subsequent lifting of importation in favour of few producers have negative implications on the growth of our infrastructures.”