High Cement Costs Stifle Affordable Housing: Policy Experts Recommend Antitrust Measures for Nigerian Producers
A new report by Agora Policy reveals why cement prices in Nigeria remain elevated despite self-sufficiency
A comprehensive report released by the policy think tank Agora Policy has attributed Nigeria’s persistently high cement prices to deep-seated market concentration and a lack of effective competition. Despite achieving domestic self-sufficiency in cement production over a decade ago, the report highlights that Nigerian consumers continue to pay premium prices compared to other Sub-Saharan African nations, a trend that significantly hampers infrastructure development and the delivery of affordable housing.
According to the findings published on Tuesday, Nigeria formally reached self sufficiency in 2012. However, the expected "competition dividend" where increased supply leads to lower consumer costs has failed to materialize. Instead, the industry has evolved into a highly concentrated oligopoly dominated by three major players: Dangote Cement, BUA Cement, and Lafarge WAPCO.
Unusual Profitability Amid Rising Costs
The report challenges the common justifications provided by manufacturers, such as high energy costs, taxation, and logistics constraints. Agora Policy points out a significant disparity: while manufacturers cite these domestic pressures to justify high local prices, they frequently export cement to foreign markets at lower rates while remaining profitable.
Data within the report shows that as of September 2025, Nigerian cement producers recorded average core operating profit margins of approximately 49%, a substantial increase from the 34% recorded in 2024. These margins exceed both regional and international benchmarks, suggesting that the benefits of expanded production capacity are being retained by firms rather than passed on to builders and households.
The Legacy of Protective Policies
The current market structure is traced back to industrial policies from the late 1990s and early 2000s. To curb a heavy reliance on imports, the Federal Government introduced a suite of incentives, including:
Import protection and restrictions.
Preferential access to foreign exchange.
Tax holidays and exclusive limestone mining rights.
While these measures successfully catalysed local production, Agora Policy argues they were intended to be temporary and tied to affordable pricing outcomes. Instead, they have entrenched a market where a few firms maintain absolute control over the entire value chain from limestone mining to final distribution.
The Inefficacy of Import Liberalization
Addressing the Federal Government’s recent considerations to reopen import channels, the think tank cautioned that liberalisation may only offer short-term relief. Due to high global transportation costs and the dominance of a few international producers, imports are unlikely to provide a long-term solution to the underlying structural issues within the Nigerian market.
Recommended Strategic Reforms
To foster a more competitive environment and drive down costs, Agora Policy outlined five critical policy recommendations:
End Exclusive Mining Rights: Implementing "use-it-or-lose-it" rules for limestone and clinker mining licences to prevent hoarding by dominant firms.
De-link Production and Distribution: Requiring that at least 30% of sales occur through independent third-party distributors to enhance market access.
Mandatory Disclosures: Enforcing quarterly reporting on plant capacity, ex-factory prices, and regional sales to ensure transparency and monitor pricing patterns.
Export Pricing Parity: Mandating that domestic consumers are not subsidising cheaper exports.
Establish a Cement Competition Desk: Calling on the Federal Competition and Consumer Protection Commission (FCCPC) to oversee market power and remove barriers for new entrants.
The report concludes that because cement is a foundational input for the national economy, its pricing is not merely an industry concern but a matter of national economic security. Persistently high prices, it warns, will continue to undermine productivity, employment, and the country’s long-term growth trajectory.
