Overview of Cement Production and Pricing in Nigeria
Nigeria’s cement production capacity tops 60 million metric tonnes each year, yet shoppers regularly pay some of the highest prices on the continent. A 50‑kilogramme bag can sell for as much as ₦15,000 in certain areas.
Market Structure and Expansion Plans
The sector is dominated by three major firms: Dangote Cement, BUA Cement, and Lafarge Africa, which has been rebranded as HBM Nigeria Plc. With several new plants slated to come online, national capacity could reach about 85 million tonnes annually in the near future.
Domestic Consumption Versus Surplus
Local consumption is estimated at only 25 to 30 million tonnes per year, meaning the country produces far more cement than it uses. The excess is exported to neighbouring nations, yet retail prices remain steep.
Price Comparison Across Major Cities
Market checks in Lagos, Abuja and Abia show a 50kg bag ranging from ₦12,500 to ₦15,000, depending on location and distribution costs. These figures are notably higher than those in other African markets.
Regional Price Benchmarks
In South Africa the same bag averages between ₦6,000 and ₦7,000, while in Egypt – one of the world’s largest cement producers – prices can fall to the equivalent of ₦4,000 to ₦5,000. Kenya’s cement sells for roughly ₦6,500 to ₦7,500 per bag, and Ghana’s prices lie between ₦7,000 and ₦8,000, influenced by exchange rates and import costs.
Stakeholder Concerns
Housing experts, developers and consumers argue that Nigerians should not be paying nearly double the continental average for a product that is manufactured locally at scale. The disparity has intensified calls for price regulation and greater competition.
Producer Capacities and Financial Performance
Dangote Cement controls more than half of national output, with an installed capacity of about 35 to 35.3 million tonnes per year across its Obajana, Ibese, Gboko and Okpella plants. Its upcoming Itori plant in Ogun State is expected to push capacity beyond 41 million tonnes.
BUA Cement, the second‑largest producer, has an installed capacity of roughly 17 to 20 million tonnes annually, centred in Obu (Edo State) and Sokoto. Lafarge Africa maintains about 10.5 million tonnes of capacity, with facilities in Ewekoro and Sagamu (Ogun State), Ashaka (Gombe State) and Mfamosing (Cross River State).
New Projects and Investment Outlook
Additional projects are in the pipeline, including MSM Cement in Kebbi State (proposed three‑million‑tonne capacity) and Resident Cement in Bauchi State (planned ten‑million‑tonne capacity). These ventures aim to increase supply and foster competition.
Revenue, Profits and Public Scrutiny
In 2025 the three leading cement companies generated over ₦6.53 trillion in revenue, with combined after‑tax profit of about ₦1.65 trillion – a 142 percent increase from 2024. Critics contend that such earnings are difficult to justify amid a worsening housing deficit and rising construction costs.
Manufacturers’ Cost Arguments
Producers maintain that cement manufacturing in Nigeria remains expensive. They cite high energy consumption – relying on gas, coal, alternative fuels and diesel – as a major cost driver. The removal of fuel subsidies, rising energy prices and naira depreciation have also increased the price of imported equipment, spare parts, refractory materials, packaging and additives.
Logistics and poor infrastructure add further expense, with industry estimates suggesting that transport may account for 30‑40 percent of the final retail price. Labor, financing, maintenance and inflation are additional pressures on production and distribution.
Government Response and Policy Calls
The Minister of Works, David Umahi, has urged cement producers to lower prices, warning that current costs inflate road and infrastructure projects, forcing continual contract adjustments. He announced that formal engagements with manufacturers will begin on July 1, 2026, aiming to support public works and private housing.
Impact on Housing and Infrastructure
Experts estimate Nigeria’s housing deficit exceeds 16 million units. Because cement is a core construction material, its high price raises the cost of building homes, schools, roads and other infrastructure, straining government budgets, private developers and ordinary citizens.
Oba Akintoye Adeoye, President of the Real Estate Developers Association of Nigeria, described expensive cement as a major barrier to affordable housing. Festus Adebayo, Executive Director of the Housing Development Advocacy Network, called for deliberate policy interventions to make cement more accessible.
Recommended Policy Measures
Policy analysts suggest concessionary energy support for cement plants, improved gas supply, and stable electricity to reduce reliance on costly diesel. They also recommend duty waivers on critical production equipment and machinery, which could lower operational costs and eventually curb market prices.
Encouraging new investors to establish additional cement plants across different regions would increase competition, help moderate prices and expand supply. Stronger oversight by the Federal Competition and Consumer Protection Commission – such as a dedicated “Cement Competition Desk” – could monitor possible price‑fixing and regional dominance.
Expert Views on Industry Reform
Estate surveyor and valuer Sola Enitan noted that while Nigeria’s cement sector has succeeded technically, it has failed socially. He argued that record profits alongside a worsening housing crisis are unsustainable.
Enitan proposed several reforms: a “use‑it‑or‑lose‑it” policy for limestone quarry licences to allow smaller producers access to raw materials; mandatory quarterly publication of plant utilisation data and regional ex‑factory prices; benchmark pricing through published “fair value” reference prices to protect consumers from gouging; prioritising standard‑gauge rail links to major plants such as Obajana and Sokoto to cut diesel‑dependent trucking; and requiring a share of cement volumes to be sold via independent third‑party distributors to break vertical monopolies in the supply chain.
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