FCCPC Opens Fresh Probe Into Possible Cement Price Manipulation

Nigeria’s consumer protection agency has opened a deeper investigation into cement pricing after a three-month review suggested possible manipulation in the market.

The Federal Competition and Consumer Protection Commission said its preliminary findings did not fully explain why cement remains expensive in Nigeria despite large limestone deposits, high installed production capacity and lower prices in some comparable African markets.

The review compared Nigeria with Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo. The reports said a 50kg bag sold for about $5.40, or N7,344, in Kenya; $4.80, or N6,528, in Tanzania; and $6.75, or N9,180, in Togo, even though Togo has no limestone deposits.

In Nigeria, the FCCPC’s market intelligence showed that a 50kg bag rose from between N9,300 and N9,700 in January to between N10,500 and N13,000 by mid-year. In some areas, prices reached N13,000 to N15,000 by July.

The commission said Nigeria has installed cement production capacity of about 60 million to 65 million metric tonnes a year, while domestic consumption is estimated at 25 million to 30 million metric tonnes. It also noted that Nigeria exports cement to neighbouring markets.

The FCCPC said the excess capacity should normally put downward pressure on prices in a competitive market. It has issued investigation notices and summonses to major players in the sector as it looks into possible anti-competitive conduct.

The reports said all major cement manufacturers supplied records to the commission except one. Publicly available estimates also showed that three major operators account for more than 90 per cent of installed production capacity.

Sources: Punch, Vanguard, Daily Post