The Federal Government and Cement Manufacturers have agreed on a price of N7,000 to N8,000 per 50 kg bag of cement to halt the astronomical rise in the price of the product.
This agreement was part of a deal struck after several hours of meeting held behind closed doors at the Headquarters of the Ministry of Works, between the Federal Government and cement manufacturers in Abuja, on Monday.
The manufacturers tentatively agreed to sell a 50-kg bag of cement at a retail price between N7,000 and N8,000, depending on location nationwide,
They, however, put a caveat that the price drop from the current market price would largely depend on the government fulfilling its promised interventions in certain areas of concern to ameliorate critical challenges faced in the industry.
The retail price of cement jumped from N5,000 to N10,000 within one week in the open market, after wholesalers, citing the increasing cost of transportation and other variables, made adjustments to the price they sell to retailers.
Retailers, in turn, transferred the additional cost burden to consumers to stay afloat.
This prompted President Bola Tinubu to order the Minister of Works, David Umahi, and his Trade and Investment counterpart, Dr. Doris Uzoka-Anite, to meet with cement manufacturers to find a solution to the crisis.
Umahi, had while calling for the meeting, expressed the Federal Government’s concern over the development, adding that if the situation wasn’t brought under control, it had the potential to hurt the prosperity agenda of the current administration .
After the meeting, Umahi read out a communiqué in which he mentioned concerns raised by the manufacturers.
These concerns include bad roads, smuggling, the high cost of energy, and the Forex crisis. This, according to the manufacturers, was the primary reason behind the price hike.
He also said the manufacturers expressed their willingness to reduce prices going forward.
Manufacturers at the meeting include: Dangote Cement PLC, BUA Cement PLC, Larfarge Africa PLC, and the Cement Producers Association.
Representatives of the Federal Government include: The Minister of Works and his counterpart in the Ministry of Industry, Trade and Investment,
While reading the communique, Umahi said, “The meeting noted the challenges of the manufacturers, like: the cost of gas; high import duty on spare parts; bad road network; high foreign exchange; and smuggling of cement to neighbouring nations.
“The government noted the challenges and reacted as follows: Federal Ministry of Industry, Trade, and Investment to seek some remedies from Mr. President on the cost of gas and import duties.
“The Federal Ministry of Works should give more attention to the fixing of the roads, especially around the locations of the manufacturers.
“On the issue of smuggling cement, the Federal Ministry of Industry, Trade, and Investment will deepen the already started engagement with the National Security Adviser on how to stop the smuggling.
“The cement manufacturers and the government noted that the current high price of cement is abnormal in some locations nationwide. Ideally, cement retail prices should not cost more than ₦7,000.00 to ₦8,000.00 per 50-kg bag of cement.
“Therefore, the three cement manufacturers: Dangote Cement Plc, BUA Cement Plc, and Larfarge Africa Plc, have agreed that the cost of cement will not be more than between ₦7,000.00 and ₦8,000.00/50kg per bag, depending on the location.
“Going forward, the government advised cement manufacturers to set up a price monitoring mechanism to ensure compliance, and manufacturers have willingly accepted to do so and to sanction any of her distributors or retailers found wanting.
“The government expects the agreed price to drop after securing the government’s interventions on the challenges of the manufacturers on gas, import duty, smuggling, and a better road network. The meeting agreed to reconvene in 30 days to review progress made.”