Nigeria can significantly reduce cement prices by tackling high production, energy, transportation, taxes, and financing costs, according to trade expert Dr. John Isemede. The expert argues that improving roads, railways, electricity, ports, and eliminating checkpoints and unofficial charges would make it cheaper to produce and move cement. Expanding exports through the African Continental Free Trade Area (AfCFTA) and ECOWAS could also increase production efficiency and help manufacturers spread costs across larger markets.
Reducing Energy and Production Costs Is Key
One of the major steps Nigeria can take is to reduce the cost of manufacturing. Cement production requires significant energy, meaning unreliable and expensive power can quickly translate into higher prices. Improving electricity supply, reducing dependence on costly alternative energy sources, and creating a more stable business environment would allow manufacturers to operate more efficiently.
Lower financing costs and greater regulatory certainty could also reduce the expenses manufacturers build into the price of cement. According to Dr. John Isemede, Nigeria must look beyond the amount of cement it produces and tackle the factors that make the product expensive from the factory to the final consumer.
Fixing Nigeria’s Costly Transport System
Because cement is a heavy product, transportation costs can have a major impact on its final price. Poor roads, expensive haulage, and limited rail connections can make it costly to move cement from factories to major markets. Isemede said Nigeria needs efficient roads, rail networks, ports, and transport corridors to reduce the cost of moving goods.
The country could also cut costs by eliminating unnecessary checkpoints and unofficial payments to local groups and other actors along major transport routes. Such expenses eventually become part of the price consumers pay. Nigeria may have abundant limestone deposits and significant cement production capacity, but the cost of cement remains a major burden for builders, construction companies, and households.
Cutting Multiple Taxes, Levies, and Charges
Manufacturers and businesses operating across Nigeria often face several taxes, levies, and other charges. These additional costs can increase the expense of producing and distributing cement. Streamlining such charges and eliminating unnecessary fees could give manufacturers more room to reduce their prices.
Efficient ports and faster customs and border procedures would also reduce delays and additional logistics expenses. According to the expert, while increasing local production is important, lowering the cost of producing and moving cement could have a more direct impact on prices.
Using Exports to Drive Efficiency
Isemede also believes Nigeria should take advantage of regional markets through the African Continental Free Trade Area (AfCFTA) and the ECOWAS Trade Liberalisation Scheme. Expanding into neighbouring markets could enable manufacturers to increase sales volumes, spread business risks, and improve efficiency. However, export incentives alone cannot solve the problem if production, energy, and transportation costs remain high.
Ultimately, Nigeria’s ability to make cement more affordable will depend on reducing the costs surrounding production and distribution. With cheaper energy, better infrastructure, fewer levies and checkpoints, lower financing costs, and more efficient transport systems, manufacturers could operate at lower costs. The goal, therefore, should not only be to produce more cement, but to create an environment where cement can be produced and delivered more cheaply to Nigerians.
