FCCPC Moves Against High Cement Prices in Nigeria, Compares Costs With Kenya, Togo
The Federal Competition and Consumer Protection Commission (FCCPC) has launched a fresh investigation into the rising cost of cement in Nigeria, with the regulator examining why cement remains significantly more expensive locally than in several other African countries.
The investigation follows a three-month cross-border study carried out by the FCCPC’s Anticompetitive Practices Department after widespread complaints over increasing cement prices despite Nigeria’s abundant limestone resources and substantial installed production capacity.
In a statement issued on Tuesday, FCCPC Director of Corporate Affairs, Ondaje Ijagwu, said preliminary findings indicated that current cement prices could not be fully accounted for by prevailing market conditions.
The study compared Nigeria’s cement industry with markets in Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo. The assessment considered factors including limestone availability, population, installed production capacity, domestic consumption and retail cement prices.
According to the commission, Nigeria currently has an installed cement production capacity estimated at between 60 million and 65 million metric tonnes annually, while domestic consumption is put at approximately 25 million to 30 million tonnes.
The FCCPC noted that despite the apparent excess production capacity and Nigeria’s status as a net exporter of cement to neighbouring countries, the price of cement within the domestic market has continued to climb.
The commission said a 50kg bag of cement that sold for between N9,300 and N9,700 in January had increased to between N10,500 and N13,000 by the middle of the year. By July, prices had reached between N13,000 and N15,000 in some parts of the country.
The price difference, the FCCPC said, becomes more striking when Nigeria is compared with other African cement markets.
In Kenya, which has a population of about 58.6 million and estimated domestic cement demand of 9.3 million metric tonnes in 2025, a 50kg bag was selling for approximately $5.40, equivalent to N7,344.
Tanzania, with a population of about 66.3 million and a comparable level of cement demand, recorded an estimated retail price of $4.80, or about N6,528 for a 50kg bag.
The FCCPC also cited Togo, where a 50kg bag of cement retailed for approximately $6.75, equivalent to N9,180, despite the West African country having no limestone deposits.
The commission said the findings had raised questions about why Nigeria’s comparatively larger production capacity and access to key raw materials had not translated into lower cement prices for consumers.
Industry operators have previously linked the high cost of cement to rising energy expenses, naira depreciation, the cost of imported machinery and spare parts, as well as transportation and logistics.
However, the FCCPC said it was testing those explanations against verified data on production costs, pricing structures, capacity utilisation and other relevant market conditions.
“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 statement said.
The commission said the investigation would determine whether the current price of cement is primarily the result of legitimate production and distribution costs or whether anti-competitive conduct may be contributing to the situation.
The probe will examine possible coordinated conduct among cement manufacturers and other industry participants, abuse of market power, restrictions on domestic supply, anti-competitive distribution practices and other potential breaches of the Federal Competition and Consumer Protection Act.
FCCPC has subsequently issued Notices of Commencement of Investigation and Summons to Produce to key industry players. The notices require the companies involved to submit records covering pricing methodologies, production volumes, capacity utilisation, exports and commercial relationships.
Speaking on the investigation, FCCPC Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said the probe was necessary because of the strategic role cement plays in Nigeria’s 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.
Bello stressed that the investigation was not designed to dictate how cement manufacturers operate their businesses or prevent them from earning legitimate profits.
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According to him, competition law permits businesses to make commercial decisions and earn returns on their investments, but does not allow conduct that unlawfully restricts competition.
The FCCPC’s investigation is expected to provide further clarity on the factors driving cement prices in Nigeria and determine whether market forces alone account for the sharp difference between domestic prices and those recorded in other African countries.
