Reps Joint Committee Investigates Cement Price Hike, Summons Dangote, Lafarge for Cost Justification

By Halima Abdulkadiri

The House of Representatives Joint Committee has initiated an investigation into the rising cost of cement in Nigeria, summoning major producers, including Dangote Cement Company and Lafarge Africa PLC, to present detailed production cost documents.

During a public hearing on Friday, Committee Chairman Rep. Jonathan Gaza (APC-Nasarawa) emphasized the need for transparency in the production costs from 2020 to the present, to assess whether the current market price of over N10,000 per bag is justified. The committee plans to visit production plants after reviewing the companies’ financial records.

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The committee has requested information on the average daily consumption of raw materials such as coal, gas, gypsum, limestone, clay, and laterite, as well as daily cement production figures. Additionally, they seek details on the prices of imported and local components used in cement production, monthly production quantities, and the companies’ audited accounts, including customs duties and tax incentives received.

Rep. Dabo Ismail (APC-Bauchi) highlighted the significant profits reported by Dangote Cement Company, with profits of N524 billion in 2022, N553 billion in 2023, and N166.4 billion so far in 2024. He questioned the continuous price hike in the market despite the company’s substantial local sourcing of raw materials.

Dangote Cement’s Group Managing Director, Mr. Arvind Pathack, attributed the price increases to the rising costs of imported and forex-linked materials, which have seen 100 to 333 percent hikes. He cited logistics challenges, forex shortages, and high-interest loans as contributing factors to the increased production costs.

Pathack noted that, despite the average selling price of N7,200 per bag, prices above N10,000 were due to retailer markups beyond the company’s control. He compared Nigeria’s cement prices to those in neighboring countries, where they are higher when converted to dollars.

The committee urged the companies to reconsider their pricing policies to alleviate the burden on Nigerian consumers. Rep. Gaza also criticized the Federal Competition and Consumer Protection Commission (FCCPC) for failing to curb middlemen’s excessive pricing, which has significantly inflated market prices.

“We are hopeful that this engagement will lead to a reduction in the price of cement,” Gaza stated, blaming the FCCPC’s inaction for the current price escalation.

The committee’s investigation aims to ensure fair pricing and protect Nigerian consumers from unjustified cost increases.