Dangiwa Seeks Reasonable Pricing for Cement, Other Building Materials
Raises technical panel, set to forward validated concerns to FEC Manufacturers list challenges, want govt intervention
The Minister of Housing and Urban Development, Mr Ahmed Dangiwa, yesterday met with cement manufacturers in the country over the “unreasonably” high prices of cement and other building materials nationwide.
Dangiwa spoke at the ministry's headquarters in Abuja when he summoned cement manufacturers to a meeting over the issue.
After listening to the concerns raised by the key actors in the sector, including Dangote Group, Bua and Lafarge, the minister noted that cement manufacturers were not doing enough to stem the tide.
At a time Nigerians were expecting the rates they buy cement to slump, given recent promises by the manufacturers, the prices of cement had recently risen by over 100 per cent.
The minister who was seemingly unconvinced by the reasons enunciated by the manufacturers, thereafter directed the Permanent Secretary in the ministry, Dr. Marcus Ogunbiyi, to get the committee that was set up working quickly, so that all validated concerns can be forwarded to the Federal Executive Council (FEC).
He expressed displeasure over the steady and alarming increase, accusing the manufacturers of hiding behind the current FX challenges to inflict hardship on Nigerians.
The minister described the situation as unacceptable, explaining that the incessant hike had seen the price rise by over 100 per cent, from N5,500 a few months ago to more than N10,000 today.
“This represents a 100 per cent rise. And it is not only cement; we have also seen near-record high escalations in the prices of other building materials such as iron rods and other fittings.
“I recall that late last year, BUA Cement announced a commendable reduction in the price of cement from N5,500 to N3,500 per bag. I applauded the gesture, and several other stakeholders did too. But today, the reality is that of escalating cement prices. Clearly, this is a crisis for the housing delivery.
"An increase in essential building materials means an increase in the prices of houses. An increase in the cost of building houses means more and more Nigerians can no longer afford to own houses and provide decent shelter,” he said
He charged the manufacturers to be honest in their dealings, stressing that Nigerians know that some of the key components of producing building materials, especially cement, are locally sourced.
According to him, key input materials such as limestone, clay, silica sand, and gypsum within Nigerian borders should not be calculated based on fluctuations in the dollar exchange rate against the naira.
"You cannot continue to give excuses and blame it on dollar all the time. The worst part is that other building materials' manufacturers take a cue from cement manufacturers, and once they see that you increase your price, they do the same as well. Recently, this is happening almost every week, and it has to stop,” he said.
He urged cement manufacturers to be innovative and come up with a roadmap as part of the committee that had been set up to tackle the challenges.
Dangiwa said the situation poses a threat to housing delivery which is the main focus of the ministry.
“For example, if we were planning to build a one-bedroom apartment for about N8 million, it will now cost twice that much, about N16 million to build. If a Nigerian could afford to own a home of N8 million, it will now be impossible to do so. We are also aware of several persons who have had to suspend construction work because of this development,” he said.
He added that the ministry was alarmed by the current situation, especially considering the projects the ministry had embarked on to provide affordable and social housing delivery to low- and medium-income earners and vulnerable members of society.
Also speaking, the Minister of State in the ministry, Abdullahi Gwarzo, called on the manufacturers to make some sacrifices in their operations, reminding them that they have a corporate social responsibility to stand by Nigeria in difficult times.
“This is not the time to focus too much on profit, but on our collective responsibility to the people of Nigeria. Cement manufacturers must realise that as government, we have options.
“But we would not want it to get to the point where we have to use those options because it may not be good for local producers. That is not to say we do not have options,” he stated.
In their remarks, the cement manufacturers, who are mainly dealing with the same issues, listed the rising price of gas, which they said is fully denominated in dollars as well as bad roads, rising cost of equipment and increasing price of diesel as some of their challenges.
While seeking government intervention, they noted that there had been recent attempts to deploy other alternatives like coal and electric vehicles for transportation.
Present at the meeting were the Group Chief Commercial Officer of Dangote Industries Limited, Rabiu Umar; Commercial Director of Lafarge Cement Plc, Gbenga Onimowo; and Executive Secretary of the Cement Manufacturers Association of Nigeria (CMAN), James Salako, among others.