Commission questions soaring prices despite Nigeria’s 60–65m-tonne production capacity; industry leaders cite logistics, energy, taxes and supply constraints.
The Federal Competition and Consumer Protection Commission has commenced a full investigation into Nigeria’s cement industry after preliminary findings raised concerns that the sharp increase in cement prices may not be fully explained by prevailing production and market costs.
The investigation follows a three-month cross-border study conducted by the FCCPC’s Anticompetitive Practices Department in response to widespread complaints over the rising price of cement, a key input in Nigeria’s construction and housing sectors.
In a statement issued by the commission’s Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC said its preliminary findings suggested possible price manipulation in the domestic cement market.
“Findings from an industry-wide investigation conducted by the Federal Competition and Consumer Protection Commission suggest possible manipulation of prices of cement in the Nigerian market,” the commission stated.
The 40-page field report compared Nigeria’s cement industry with markets in Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo, examining factors including limestone availability, population, production capacity, consumption and retail prices.
According to the commission, the findings raised questions about why Nigeria’s substantial raw material deposits and large installed production capacity had not translated into lower domestic prices.
Prices rise despite excess capacity
Nigeria has significant limestone deposits and an estimated installed cement production capacity of between 60 million and 65 million metric tonnes annually. Domestic consumption, however, is estimated at between 25 million and 30 million metric tonnes.
That means the country has considerable production capacity beyond its domestic consumption requirements and remains a net exporter of cement to some neighbouring countries.
Despite this, cement prices in Nigeria have continued to rise.
FCCPC market intelligence showed that a 50kg bag of cement sold for between N9,300 and N9,700 in January before rising to between N10,500 and N13,000 by the middle of the year. By July, prices ranging from N13,000 to N15,000 had been reported in some parts of the country.
The commission said the trend was difficult to reconcile with what might ordinarily be expected in a competitive market with substantial excess production capacity.
“Of particular concern to the commission is that this level of production capacity has not resulted in the downward pressure on domestic prices that might ordinarily be expected in a competitive market with substantial excess capacity,” the FCCPC said.
The commission’s international comparison also showed significant price differences.
In Kenya, where the population is estimated at 58.6 million and cement demand was about 9.3 million metric tonnes in 2025, a 50kg bag reportedly sold for approximately $5.40, equivalent to about N7,344.
In Tanzania, with a population of about 66.3 million and comparable cement demand, a bag sold for around $4.80, or N6,528.
The disparity was also evident in Togo, which the FCCPC noted has no limestone deposits. Cement there reportedly retailed at about $6.75, equivalent to N9,180 per bag.
The findings have therefore prompted the commission to question why Nigeria, with a much larger raw-material base and substantial production capacity, is experiencing significantly higher domestic prices.
Producers cite rising costs
Cement producers and other industry participants have attributed the price increases to several factors, including high energy costs, the depreciation of the naira, increased costs of imported machinery and spare parts, transportation and logistics expenses.
The FCCPC, however, said it was testing those explanations against verified information on production costs, pricing, capacity utilisation and other market conditions.
“Information provided by industry participants has identified energy costs, depreciation of the Naira and its effect on imported machinery and spare parts, as well as transportation and logistics costs, among the factors contributing to cement prices,” the commission said.
It added that the explanations were being subjected to further scrutiny.
“The commission is testing these explanations against verified information on costs, production, pricing and market conditions. However, the weight of preliminary findings provides sufficient grounds for the investigation to continue.”
The expanded probe will examine whether the prevailing prices are the result of legitimate market forces or whether anti-competitive practices are contributing to the situation.
Areas under investigation include possible coordinated conduct among market participants, 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 industry players. The companies have been asked to provide information relating to pricing methodologies, production levels, capacity utilisation, exports and commercial relationships.
“Next is to determine whether prevailing cement prices can be explained by legitimate costs and market conditions, or whether there is evidence of coordinated conduct, abuse of market power, restriction of domestic supply, anti-competitive distribution practices or other conduct contrary to the provisions of the FCCPA,” the commission said.
Bello: FCCPC will not dictate prices
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the investigation was necessary because of the strategic importance of cement to the Nigerian economy.
According to him, the cost of cement has implications far beyond the construction industry, affecting housing affordability, infrastructure development and the broader cost of doing business.
“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. When concerns persist about how such an important market is functioning, the Commission has a duty to look beyond assumptions and establish the facts,” Bello said.
He stressed that the investigation should not be interpreted as an attempt by the government to dictate how private companies operate or prevent them from making legitimate profits.
“Businesses are entitled to make legitimate commercial decisions and earn returns on their investments. Competition law does not prevent that. Its purpose is to protect the competitive process, so that prices, output and other market outcomes are determined by genuine competition rather than conduct that unlawfully restricts it,” he said.
The investigation comes as rising cement prices continue to put pressure on developers, contractors and prospective homeowners, with higher construction costs contributing to the broader housing affordability crisis.
Construction sector questions explanations
Building industry operators and economists said the factors responsible for high cement prices were complex and could not necessarily be attributed to a single cause.
They pointed to structural challenges such as poor transportation infrastructure, the cost of moving limestone and finished cement, energy expenses, taxation and monetary conditions.
The Chairman of the Lagos Chamber of Commerce and Industry Construction Group, Soji Adeniji, said his experience on a recent project had reinforced concerns about the competitiveness of Nigerian cement prices.
He recalled a conversation with a friend in Canada who was considering importing cement from Nigeria for a construction project.
“I was in Canada recently, and a friend of mine who is having a project in Canada was contemplating buying cement from abroad. He was of the opinion that, why can’t we buy cement from Nigeria, as in he wants to import cement from Nigeria and stuff like that,” Adeniji said.
However, after carrying out the calculations, the Canadian project owner discovered that Nigerian cement was not as competitive as expected.
“By the time he did his calculations, he found out that cement is not as cheap in Nigeria, and that we could arrange for the importation. Eventually, as the report stated, he found out that Turkey is more price-friendly. He was able to establish a relationship with Turkey. Of course, the Tanzania, Kenya market too was a bit preferable, which boils down to the fact that the price of cement in Nigeria is high. But then the question would be, what is the location of that kind of high cost?” he added.
Adeniji also acknowledged that the Nigerian market was currently experiencing some level of scarcity but questioned some of the explanations being offered for the situation.
“Why are we having scarcity? Some people are saying because it was raining and therefore limestone deposits, well, that is not, I mean, for me, for the past two weeks now, since the beginning of August, there has not been much rainfall to affect any production. But what is happening to the limestone would be another thing,” he said.
He argued that the entire production chain needed to be examined, from the extraction of limestone to manufacturing and distribution.
“If you check the production line and look at that production chain line, you look at it from limestone to the facility that is an infrastructure facility for production,” Adeniji said.
He also pointed to the wider economic environment and possible challenges within individual manufacturing operations.
“You’d notice that Lafarge has just changed. A company called HBM has just bought over Lafarge, meaning that maybe the management issue or something like that. So, when you look at that production, up to the level of distribution, you’ll ask again, why are we experiencing this? They will be telling you logistics, transportation for delivery, and that kind of thing,” he said.
Taxation, he added, could also be contributing to the final cost paid by consumers.
“Some people from the manufacturer’s side too might be talking about the issue of double taxation, and things like that. If the tax regime is not favorable, there’s nothing definite,” Adeniji said.
Economist urges government intervention
Professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, said the government should examine whether supply constraints were contributing to the persistent increase in cement prices.
He suggested that demand could be outpacing effective supply in some segments of the market, despite Nigeria’s overall installed production capacity.
“This could be more demand than supply. So what the government should do is that you look at that sector properly and see whether you can help that sector,” Ekpo said.
He also urged the government to improve access to financing for businesses seeking to participate in cement production and distribution.
“Otherwise,” he said, “you’d keep having this problem of high cost of cement.”
Experts seek alternatives to cement
Beyond increasing cement production, some experts believe Nigeria should accelerate research into alternative construction materials that could reduce dependence on cement.
Samuel Shonibare, a member of the Nigerian Institute of Building and a researcher at Yaba College of Technology, said greater use of alternative materials could eventually reduce demand for cement and put downward pressure on prices.
“I urged the government to look for alternatives to the use of cement in construction. There has been a lot of research that studied other materials that can be used to replace cement partially in concrete production,” he said.
Shonibare disclosed that he was researching the possibility of using rice husks as a partial substitute for cement in concrete production.
“I’m trying to look at the probability of using rice shells as partial replacements for cement in concrete production. It’s one research project I’m currently working on. Not that I’m even trying, I’m on it,” he said.
He argued that reducing the amount of cement required in construction could have a significant impact on the market.
“If the country reduces the use of cement in construction, of course, there will be a drastic reduction in the price of cement that is being used in construction,” Shonibare said.
He called on stakeholders in the construction sector to devote more resources to research and development of viable alternatives.
“So the recommendations I would make for now is telling the stakeholders in the construction industry to focus on research that will yield an alternative material to cement. If the producers of cement have discovered that there’s a shift in the usage, I think that will lead to a reduction in the price,” he added.
Muda Yusuf calls for deeper probe
The Chief Executive Officer of the Centre for Promotion of Private Enterprise, Muda Yusuf, urged the FCCPC to conduct a more detailed assessment of the cost structure of Nigeria’s cement industry before drawing firm conclusions about possible price manipulation.
Yusuf said it was important for the commission to incorporate the explanations of manufacturers and distributors into its assessment.
“In order for a balanced view, it is important to hear from the FCCPC what the producers and distributors of cement have to say. Secondly, we need to know the cost structure of the cement producers and suppliers in the foreign countries. It will help us gain clear insight,” he said.
According to him, a meaningful comparison between Nigerian cement prices and those in other countries must take into account differences in production costs, taxation, energy and logistics.
“The report needs to be more rigorous and show us the cost structure in the other countries. We need to know their cost of production, taxes, logistics and energy. Having the factors that underlie the prices will help (the probe), since it is presented as a comparative report,” Yusuf added.
The FCCPC investigation is therefore expected to determine whether the high cost of cement is primarily a consequence of legitimate economic pressures or whether anti-competitive conduct is also playing a role.
Until the inquiry is completed, the commission's preliminary findings do not amount to a final determination of wrongdoing by cement manufacturers or distributors. The outcome of the investigation could, however, have significant implications for one of Nigeria's most important industrial and construction markets.