Nigerians groan as cement price hits N2,200 - Affects house rent in Lagos

Dayo Ayeyemi, Lagos - 25.02.2008

BARELY one month after the lifting of the ban on importation of cement by the Federal Government, the price of cement has increased from N1,300 to N2,200, shocking many Nigerians.

According to a market survey carried out by the Nigerian Tribune in Lagos at the weekend, the price of a bag of cement has increased progressively from N1,300 to N1,600, N1,800 and now N2,200 less than 30 days after the granting of licences for importation.

Another major concern is that the prices of other building materials especially reinforcement (iron bar), casings, cement stabilised blocks, granite, sharp and white sand have increased tremendously.

The survey also showed that the price of reinforcement had jumped from N85,000 to N165,000; sandcrete blocks measuring 9x9x18 inches and 9x6x18 inches selling for N70 and N80 as at January 2008 are now N90 and N100.

Also, prices of granite, sharp and white sand and essential materials in the construction industry, have gone up from N24,000 to N27,000; N4,000 to N6,000; and N5,000 to N7,000 respectively.

Casing, a tool for pouring pile foundation in difficult terrain, is not even available in the market.

In some of suburbs of Lagos such as Ajah, Ayobo, Ipaja, Ikotun, Berger and Ibafo on the Lagos-Ibadan axis, the price of a cement bag ranged between N2,100 and N2,250.

An impeccable source from one of the local manufacturing industries said they actually increased the price by N100 and that there was an indication to further increase the price.

The Federal Government, after meeting with cement manufacturing companies last January in Abuja, announced the lifting of the ban on the importation of cement following a shortfall local production.

Justifying its policy reversal on cement importation, Minister of Industry, Chief Charles Uguwh, said the decision was taken because of an annual shortfall of 11.5 million tonnes.

Annual demand for cement is estimated at about 18 million metric tonnes while annual consumption in 2007 was estimated at 11.125 million metric tonnes. Local operators can only supply between six and 6.5 million tonnes.

Chairman of the Nigerian Institute of Building, Lagos branch, Mr. Kunle Awobodu, said the situation was worrying and attributed it to hoarding by traders in an attempt to make unnecessary profit out of government’s gesture to lift the embargo on cement importation.

He lamented that the situation where a bag of cement was being sold at N2,200 had become unbearable for construction experts.

He said this would cause a lot of dislocations in service delivery, stating that where a company projected for profit, it might record loss caused by the sudden increase in the price of cement.

For existing building, there would not be much effect but owners of new buildings would charge high rents because of the high cost of cement.

Affordable homes scheme being championed by the government may be a mirage after all.

The cost of maintenance of buildings will also increase as a result of the new price regime and in effect affect rents in Lagos and all over the country.