Lagos, Nigeria – In a bold move, the Cement Producers Association of Nigeria (CEPAN) has called on President Bola Tinubu to dismantle the monopoly in cement production and distribution, advocating for the inclusion of companies with verifiable local investments in the sector. This request was conveyed through a formal letter addressed to the President, signed by CEPAN’s National Chairman, David Iweta, and co-signed by the National Secretary, Reagan Ufomba. The letter, which was made available to our correspondent on Monday, emphasized the need for Nigeria to address the escalating cement prices and ensure broader industry participation.
Nigeria, a nation grappling with high cement costs and an ever-increasing demand for this vital construction material, has prompted CEPAN’s call for reform. The association argued that to bridge the infrastructure gap, housing deficit, and boost revenue, among other construction activities in the country, cement must be readily available at reasonable prices, in line with global standards.
CEPAN underscored the glaring profit margin disparities, pointing out that the three major cement plant owners in Nigeria currently enjoy a staggering profit margin of over 300 percent. In stark contrast, larger cement plants in developed economies like Switzerland, China, Mexico, Taiwan, and India typically maintain profit margins ranging from 13 to 17 percent. CEPAN emphasized the urgent need for the government to revisit the backward integration policy initiated by the late President Umar Yar’Adua, which would enable the sector to meet the surging demands for cement in Nigeria.
Furthermore, CEPAN urged the government to collaborate with the Ministry of Industry, Trade, and Investment, along with the Ministry of Finance, to dismantle the cement monopoly and broaden the scope for participation by entities with confirmed local investments in cement and other related interests. They argue that this monopolistic environment is detrimental to Nigerian cement consumers and inhibits healthy market competition.
As David Iweta, the National Chairman of CEPAN, stated, “The President, working with the Ministry of Industry, Trade and Investment and the Ministry of Finance must dismantle monopoly and expand the scope for participation by those with verifiable local investment in cement and other interests. As a practical demonstration of the exploitation of Nigerian cement consumers, the annual profit margin by the three major cement plant owners in Nigeria is over 300 percent above bigger cement plants in other developed economies of Switzerland, China, Mexico, Taiwan, and India with profit margin average of between 13 percent – 17 percent. The return on investment under international best practices Internal Rate of Return must not exceed 25 percent. This can only happen where a cabal dictates industrial policies and not a democratically elected government.”
In addition to these requests, CEPAN called for a thorough investigation into the allocation and utilization of the N13.2 billion Cement Technology Funds, currently held by the Bank of Industry. This fund, originally initiated during President Yar’Adua’s administration, aimed to reduce cement prices and ensure nationwide price stability as part of the infrastructure development strategy.
The ball is now in President Tinubu’s court as the nation watches with anticipation, awaiting potential policy changes that could reshape the cement industry in Nigeria.