The Federal Competition and Consumer Protection Commission (FCCPC) has launched a further investigation into the rising price of cement in Nigeria, following preliminary findings that the cost of the product may not be fully explained by prevailing market conditions.
The commission said its three-month cross-border assessment indicated possible anti-competitive practices in the domestic cement market, prompting it to deepen its investigation.
The exercise was carried out by the FCCPC’s Anticompetitive Practices Department following complaints from consumers and other stakeholders over the escalating cost of cement.
In a statement issued on Tuesday by the commission’s Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC said its researchers compared Nigeria’s cement industry with markets in Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo.
The comparison covered factors including limestone availability, population, cement production capacity, consumption levels and retail prices.
The commission said Nigeria had an installed cement production capacity estimated at between 60 million and 65 million metric tonnes annually, significantly above domestic consumption of about 25 million to 30 million tonnes.
Despite the apparent surplus capacity and Nigeria’s position as a cement exporter to some neighbouring countries, the FCCPC said prices within the country had continued to increase.
It said a 50kg bag of cement that sold for between N9,300 and N9,700 in January had risen to between N10,500 and N13,000 by the middle of the year.
By July, the price had reached between N13,000 and N15,000 in some locations.
The commission said its findings also showed that consumers in some other African countries were paying substantially less for the same quantity of cement.
In Kenya, it said, a 50kg bag sold for approximately $5.40, equivalent to N7,344. The country has a population of about 58.6 million and domestic cement demand of approximately 9.3 million metric tonnes in 2025.
In Tanzania, where the population is about 66.3 million and cement demand was also estimated at 9.3 million metric tonnes, a 50kg bag sold for about $4.80, or N6,528.
Togo, despite having no limestone deposits according to the FCCPC, recorded a price of approximately $6.75, equivalent to N9,180 per bag.
The commission said the comparison had raised questions about the factors sustaining high cement prices in Nigeria, given the country’s sizeable production capacity and abundant limestone resources.
“Of particular concern to the Commission is that this level of production capacity has not resulted in the downward pressure on domestic prices that might ordinarily be expected in a competitive market with substantial excess capacity,” the statement said.
The FCCPC acknowledged that industry operators had cited several factors for the price increases, including high energy costs, naira depreciation, the rising cost of imported equipment and spare parts, transportation and logistics expenses.
However, it said those claims were being tested against independently verified information on production costs, pricing structures, capacity utilisation and wider market conditions.
The commission said its preliminary findings were strong enough to justify continuing the investigation.
The expanded probe will examine whether cement prices are being driven by genuine production and distribution costs or whether operators may be engaging in conduct that violates Nigeria’s competition laws.
Specific areas of investigation include possible coordinated pricing, abuse of market power, restrictions on domestic supply and anti-competitive distribution arrangements.
The FCCPC said it had served key industry players with Notices of Commencement of Investigation and Summons to Produce.
The documents require the companies to submit information on their pricing methodologies, production levels, capacity utilisation, export activities and commercial relationships.
The commission stressed that the investigation was not an attempt to regulate legitimate profits or interfere with normal commercial decisions.
Its Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said the importance of cement to housing, infrastructure and business activity made it necessary to ensure that the market remained competitive.
“Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business,” Bello said.
He said businesses were entitled to make legitimate commercial decisions and earn returns on their investments, but added that such rights did not extend to practices that unlawfully restricted competition.
“Competition law does not prevent that. Its purpose is to protect the competitive process, so that prices, output and other market outcomes are determined by genuine competition rather than conduct that unlawfully restricts it,” he said.
The FCCPC’s investigation comes amid mounting concerns over the effect of cement prices on Nigeria’s construction industry, with rising costs contributing to higher expenses for housing, commercial projects and public infrastructure.
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