Cement Prices: Nigerians Pay Double Despite Local Production Surplus

Despite Nigeria’s cement production capacity of over 60 million metric tonnes yearly, consumers continue to pay some of the highest prices on the continent, with a 50-kilogramme bag selling for as high as ₦15,000 in some parts of the country.

The country’s cement industry is dominated by three major players, Dangote Cement, BUA Cement and Lafarge Africa, recently rebranded as HBM Nigeria Plc.

Naija News reports that together, the companies have an installed production capacity estimated at between 60 million and 65 million metric tonnes yearly.

With new plants expected to come on stream, national capacity could rise to about 85 million tonnes per year in the coming years.

However, domestic consumption is estimated at only 25 million to 30 million tonnes yearly, meaning Nigeria produces more cement than it currently uses and exports part of the surplus to neighbouring countries.

Nigerians Pay More Than Peers

Market checks across major cities, including Lagos, Abuja and Abia, showed that a 50kg bag of cement sells between ₦12,500 and ₦15,000, depending on location and distribution costs.

This is far higher than prices in several African countries.

In South Africa, a 50kg bag of cement averages between ₦6,000 and ₦7,000, while in Egypt, one of the world’s largest cement producers, prices could fall to the equivalent of ₦4,000 to ₦5,000 per bag.

In Kenya, cement sells for about ₦6,500 to ₦7,500 per bag, while in Ghana, prices range between ₦7,000 and ₦8,000, depending on exchange rates and import costs.

The price gap has raised concerns among housing experts, developers and consumers, who argue that Nigerians should not be paying nearly twice the continental average for a product produced locally at scale.

Dangote, BUA, Lafarge Dominate Market

Dangote Cement controls more than half of Nigeria’s cement production, with an installed capacity of about 35 million to 35.3 million tonnes yearly across its Obajana, Ibese, Gboko and Okpella plants.

Its capacity is expected to exceed 41 million tonnes when its new plant in Itori, Ogun State, is completed.

BUA Cement, the second-largest producer, has an installed capacity of about 17 million to 20 million tonnes per year, with major plants in Obu, Edo State, and Sokoto.

Lafarge Africa has an installed capacity of about 10.5 million tonnes yearly, with plants in Ewekoro and Sagamu in Ogun State, Ashaka in Gombe State and Mfamosing in Cross River State.

Several new plants are also being planned, including MSM Cement in Kebbi State, with a proposed capacity of three million tonnes per year, and Resident Cement in Bauchi State, with a planned capacity of 10 million tonnes per year.

The three leading cement firms generated over ₦6.53 trillion in revenue in 2025, while their combined after-tax profit stood at about ₦1.65 trillion.

The figure represented a 142 per cent increase from 2024.

For critics, the profit figures have intensified questions over whether Nigerian consumers are paying more than necessary for cement.

They argue that record earnings by producers are difficult to reconcile with the country’s worsening housing deficit and rising construction costs.

Manufacturers Blame Energy, Logistics

Manufacturers, however, insist that cement production in Nigeria remains expensive.

They argue that cement plants require huge amounts of energy, with producers relying on gas, coal, alternative fuels and diesel to power kilns and generators.

The removal of fuel subsidies, rising energy prices and the depreciation of the naira have also increased the cost of imported equipment, spare parts, refractory materials, packaging materials and additives.

Producers also blame logistics and poor infrastructure, noting that cement plants are often located far from key consumption centres.

Industry estimates suggest that logistics alone may account for between 30 and 40 per cent of the final retail price of cement.

They also cite labour costs, financing costs, maintenance expenses and inflation as major pressures on production and distribution.

“When demand remains strong, manufacturers have little incentive to cut prices,” The Guardian quoted industry players as saying.

FG Seeks Price Reduction

The high cost of cement is already affecting public infrastructure projects, with the Minister of Works, David Umahi, urging producers to reduce their prices.

Umahi warned that the current price of cement was making road and infrastructure projects more expensive, forcing the government to continually adjust contract costs.

He said the Federal Government would begin formal engagements with cement manufacturers from July 1, 2026.

According to him, a reduction in cement prices would support the delivery of government infrastructure projects and also benefit citizens building private homes.

The minister also urged cement companies to increase production capacity to support national infrastructure development.

Housing Sector Under Pressure

Experts estimate that Nigeria faces a housing deficit of more than 16 million units, with cement remaining one of the most important materials in construction.

When cement prices rise, the cost of building houses, schools, roads and other infrastructure also increases, placing additional pressure on government budgets, private developers and ordinary Nigerians.

President of the Real Estate Developers Association of Nigeria, Oba Akintoye Adeoye, said the high cost of cement remained one of the biggest obstacles to affordable housing and infrastructure development.

The Executive Director of the Housing Development Advocacy Network, Festus Adebayo, also called for deliberate policy interventions to make cement cheaper.

“Cement is a strategic material in housing delivery. If Nigeria is serious about tackling its housing deficit, policies must be introduced to ensure cement becomes more affordable and accessible for developers and individuals seeking to build homes,” he said.

HDAN urged the Federal Government to consider policy measures that would reduce production costs and improve competition in the industry.

The group recommended concessionary energy support for cement manufacturers, improved gas supply to plants and stable electricity to reduce dependence on expensive diesel.

It also called for duty waivers on critical equipment and machinery used in cement production, saying such measures could lower operational costs and eventually reduce market prices.

Adebayo further urged the government to encourage new investors to establish additional cement plants across different regions of the country, noting that stronger competition could help moderate prices and expand supply.

An estate surveyor and valuer, Mr Sola Enitan, said Nigeria’s cement industry had succeeded technically but failed socially.

“The coexistence of record profits and a worsening housing crisis is unsustainable. By shifting from protectionism to competition, the Federal Government can unlock affordable housing and ensure that industrial capacity serves the public good,” he said.

Enitan called for stronger oversight by the Federal Competition and Consumer Protection Commission, including the creation of a “Cement Competition Desk” to monitor possible price-fixing and regional dominance.

He also proposed a “use-it-or-lose-it” policy for limestone quarry licences to allow new and smaller producers access to raw materials.

According to him, cement producers should be required to publish quarterly plant utilisation data and regional ex-factory prices.

He also recommended benchmark pricing through the publication of “fair value” reference prices to protect consumers from retail price gouging.

Enitan further urged the government to prioritise standard-gauge rail connections to major cement plants, including Obajana and Sokoto, to reduce dependence on costly diesel-powered trucking.

He also proposed that a percentage of cement volumes be sold through independent third-party distributors to break what he described as vertical monopolies in the supply chain.