Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Nigeria raps dominance of large cement firms hampering economy

04/21/2021 | 03:47am EDT
FILE PHOTO: Construction workers ride a motor tricycle at a construction site of the Dangote oil refinery on the outskirts of Lagos, Nigeria

ABUJA (Reuters) - Lawmakers on Tuesday criticised the dominance of three large firms in Nigeria's cement industry amid price rises they said impedes construction critical to economic recovery, calling for looser licensing rules to attract new entrants.

Nigeria has total cement production capacity of 47.8 million tonnes and annual demand for around 20.7 million tonnes, but cement prices are some 240% above the global average, they said, a serious dampener on Africa's largest economy. A tonne sells for up to $135 in Nigeria, industry data shows.

Lawmakers have challenged cement price hikes since 2016 given the dominance of Dangote Cement, founded by Africa's richest man Aliko Dangote, which has 60.6% market share. Lafarge Africa accounts for 21.8% while BUA Cement has 17.6%.

In a motion adopted in the upper house Senate, lawmakers called for a relaxation of licensing restrictions to create the competition needed to drive down prices.

They warned of the negative impact of high prices on the Nigerian economy, which emerged from recession in the 2020 fourth quarter but is grappling with double-digit inflation and a shrinking labour market amid mounting armed violence.

"The recent increase in the price of cement slowed down the amount of construction work being embarked upon...and almost collapsed the procurement plan of the government in 2020," the motion said.

Cement firms raised prices during Nigeria's 2016 recession to counter low sales volumes, and the country shut land borders in 2019 for more than a year to curb smuggling, damaging exports. Firms raised prices to make up for revenue losses.

"If the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally," lawmakers said.

President Muhammadu Buhari has made investment in railways and roads a focus of his administration's drive to kick-start growth, but falls in public revenue - linked to lower oil prices due to the coronavirus pandemic - have checked his ambitions.

The Senate can influence government policies but relies on the executive to implement them.

(Reporting by Camillus Eboh; Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram and Mark Heinrich)

By Camillus Eboh

© Reuters 2021
Latest news "Economy & Forex"
02:23pSpaniards under 60 years old who received a first dose of astrazeneca's covid vaccine will get a second shot of pfizer, el pais says
02:22pBurry of 'Big Short' fame reveals large bearish bet against Tesla
02:20pFHFA FEDERAL HOUSING FINANCE AGENCY  : Announces Fannie Mae's and Freddie Mac's Proposed Duty to Serve Underserved Market...
02:18pBiden administration to delay revamp of Trump-era China investment ban - Bloomberg
02:15pCanada's Teck sees little risk of higher taxes in No. 1 copper producer Chile -CEO
02:11pJPMorgan tells vaccinated employees no mask required at work
02:10pDollar slides to multi-month lows as Fed rate hike fears fade
02:08pEnd new oil, gas and coal funding to reach net zero, says IEA
02:05pItaly's Valentino bans fur and focuses on its main brand
02:03pAmazon.com inc tells reuters it is extending moratorium on police use of its face recognition technology until further notice
Latest news "Economy & Forex"