…Urges FG To Liberalise Policies To Encourage More Local Investors
The Senate on Tuesday frowned at the high cost of cement in the country, despite the fact that local installed capacity is far higher than the requirement.
The upper chamber of the National Assembly said the price of cement in Nigeria is 240 percent higher than the global average.
The Senate, therefore, called on the Federal Government to introduce liberal policies such as the provision of industrial and larger tax incentives to encourage local investments in cement production in the country.
Such steps, they noted, would, besides attracting local investors, boost the production of cement as well as reduce its price in the market.
The Senate adopted a motion titled: “Need for Liberalization of Cement policy in Nigeria”, sponsored by Senator Ashiru Oyelola Yisa and co-sponsored by five other lawmakers.
They are: Senators Muhammad Enagi Bima (Niger South); Adelere Adeyemi Oriolowo (Osun West); Samuel Egwu (Ebonyi North); Kabiru Gaya (Kano South); and Michael Nnachi (Ebonyi South)
Presenting the motion, Senator Yisa noted that Cement is one of the few building materials in which Nigeria is self sufficient.
He said: “As at 2018, the installed capacity of cement producers was about 47.8MMT which is far above the estimated (2018) consumption of about 20.7MMT. Yet, the price of cement in Nigeria is about 240 percent higher than global average;
“Cognizant that cement takes a large share of domestic expenditure, and the price of each commodity significantly impacts the government’s ability to provide much-needed infrastructural works required for the growth of our economy;
“Further cognizant that the recent increase in price of cement ( from N2,600- N3,800) slowed down the amount of construction work being embarked upon thus negatively affecting labour engagement and almost collapsed the procurement plan of the governments in 2020 Appropriation Act;
“Mindful that the Nigerian cement market is oligopolistic in nature with three players (Dangote Cement (60.6 percent); Lafarge Africa Plc (21.8 percent); and BUA Group (17.6 percent) largely dominating the scene therefore making it susceptible to price fixing practices;
“Convinced that if the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally;
“Worried that the significant rise in cement prices in the country and the low purchasing power of Nigerians may result in substandard building constructions and non-completion of planned infrastructural works;
“Strongly believes that there is an urgent need to encourage more local production of cement to satisfy the demands of Nigeria with a steady growth rate of approximately 3 percent per annum; a housing deficit of 30 million units and less engagement of over 10.5 million workforce of the building and construction industry; and
“Further strongly believes that unfavourable government policies such as imposition of multiple taxes, erratic power supply, government ban on importation in violation of ECOWAS Trade liberalization Scheme (ETLS) and subsequent lifting of importation in favour of few producers have negative implications on the growth of our infrastructures.”
Accordingly, the Senate in its resolution called on the Federal Government to provide more industrial incentives and industrial protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cements, reduce price and encourage more valuable producers in Nigeria.