A report by the policy think tank Agora Policy has blamed weak competition in Nigeria’s cement industry for persistently high cement prices and rising construction costs nationwide.
The report, published on Tuesday by Agora Policy, a Nigerian think tank committed to finding practical solutions to urgent national challenges, revealed that the high cement prices have also hindered affordable housing and infrastructure delivery in the country over the years.
According to the report, despite achieving formal self-sufficiency in cement production in 2012, cement prices in Nigeria remained elevated, with industry profitability consistently above levels observed across Sub-Saharan Africa.
In September 2025, Nigeria’s cement producers reported average core operating profit margins of approximately 49 per cent, up from about 34 per cent in 2024. The report stated that the profits accumulated by Nigerian cement producers are well beyond international benchmarks.
The report insisted that the capacity achievement of the Nigerian cement industry does not reflect in the prices paid by households, builders, and the country’s government.
Nigeria’s major cement producers, Dangote Cement, BUA Cement, and Lafarge WAPCO, have expanded their capacity over the years to serve both domestic and international markets.
The report questioned cement manufacturers’ justification for high cement prices in Nigeria, noting that they sell cement at lower prices in foreign markets while still making profits.
“Cement producers blame high cement prices on taxes, energy costs, transport bottlenecks, and financing constraints, noting that exported cement is cheaper because it is exempt from many domestic levies.
“But this explanation leaves an uncomfortable question unanswered: if costs are the binding constraint, why can Nigerian producers sell cement profitably abroad at lower prices than Nigerian households and builders pay at home?
“The gap suggests that market structure, and the pricing power it confers, may matter at least as much as cost pressures,” the report stated.
Weak competition
According to Agora Policy, the low local cement production in the late 1990s and early 2000s forced Nigeria to rely on imports, which prompted Nigerian lawmakers to introduce import protection and investment incentives to boost domestic supply and stabilise prices.
However, these measures were meant to be temporary and tied to affordable pricing, but cement prices have remained persistently high despite increased local production in the subsequent years.
“To fix this, policymakers offered investors import protection, preferential FX access, tax holidays, and exclusive limestone concessions, in return for large-scale investment, self-sufficiency, and affordable cement to support housing and infrastructure.”
The report faulted the concentrated oligopoly of the cement industry in Nigeria, blaming producers for persistent high price margins that are above those in other countries but that delay infrastructure delivery in Nigeria.
“By 2012, the production side of this bargain had largely been fulfilled. Nigeria achieved cement self-sufficiency, installed capacity exceeded domestic demand, and the country shifted from a net importer to an occasional exporter.
“However, the consumption side of the bargain, affordable prices disciplined by competition, has not materialised. Instead, the market has consolidated into a highly concentrated oligopoly with persistently high prices and margins, raising legitimate questions about whether infant-industry policies have outlived their purpose.
“Cement is not an ordinary product. It is a key input into the housing, infrastructure, and construction sectors, which drive employment, productivity, and long-term growth. Every road, school, hospital, factory, and housing estate depends on affordable cement,” the report stated.
It stated that the increasingly high price of cement in the country has contributed to many societies’ persistent challenges, such as unaffordable housing and reduced social and economic benefits.
Liberalisation
The report also identified the Federal Government’s most immediate response to rising cement prices as reopening import channels, but warned that this step would not resolve the price problem.
It noted that cement imports are unlikely to lower prices in Nigeria, as the product is bulky and costly to transport.
The global spare capacity of the product is also limited, while the market is dominated by a few producers, making imports ineffective in an oligopolistic environment.
Additionally, it stated that import liberalisation is at best a temporary fix, and Nigeria’s long-term policy of cement self-sufficiency and sustainable price control must come from strengthening domestic competition, not shipping bags across borders.
Solutions
The report identified five key recommendations to address the high price of cement in the country. According to the report, there is a need for broader access to limestone and clinker, key cement inputs, by ending exclusive control by a few firms.
It noted that policymakers should enforce “use-it-or-lose-it” rules and award new mining licences transparently with clear development deadlines.
It advised separating cement distribution from production, adding that this would allow at least 30 per cent of cement products to move through third-party networks, thereby increasing market choice.
Additionally, the report advised the government to tackle persistent regional dominance by considering antitrust measures such as divesting excess capacity, limiting further expansion by dominant firms, enforcing export pricing parity, and introducing automatic pro-competition triggers when plant utilisation falls.
Agora Policy noted that cement producers must be mandated to disclose quarterly data on plant capacity, ex-factory prices, and regional sales. It noted that this will help regulators to identify supply constraints, pricing patterns, and potential regional price abuses.
It urged the Federal Competition and Consumer Protection Commission (FCCPC) to create a dedicated cement competition desk to monitor market power, focusing on limestone rights, transport bottlenecks, and excess capacity that blocks new entrants.
