Nigeria has experienced a significant decrease in cement prices, with costs falling from a previous high of N10,000-N15,000 per 50kg bag to a more manageable N7,000-N8,000 range.
This reduction follows a period of intense volatility in the building materials sector, which peaked earlier this year and significantly disrupted the construction industry.
In February, a dramatic increase in cement prices led many real estate developers to pause their construction projects, citing escalating building costs and financial strain.
This stall in projects highlighted the broader impact of soaring prices on the construction sector’s stability and growth.
A recent market survey by BusinessDay confirmed the price reduction, noting that the current rates for a 50kg bag of cement now range between N7,000 and N7,500 in various parts of the country.
However, prices from BUA Cement, a leading producer, are slightly higher, varying from N7,500 to N7,800 depending on location.
Retailers and major distributors have cited decreased demand and effective government intervention as the primary drivers of the price drop.
During the peak of the crisis, the Federal Government convened a meeting with key cement manufacturers to address the escalating prices.
This collaboration led to an agreement to adjust prices to their current levels, aiming to stabilize the market and lessen the financial burden on the construction industry.
However, the producers did not comply with this agreement immediately, “Nigerians stopped demanding cement; many project sites were abandoned as developers sat back and waited for the prices to come down. So, what has happened is an inter-play of demand and supply with price responding which is Economics at work,” Collins Okpala, a cement dealer disclosed.
In the Nyanya area of the Federal Capital Territory, a 50-kg bag of Dangote cement now sells for between N7,000 and N7,500, while BUA cement sells for between N8,500 and N9,500, down from between N11,000 and N12,000 respectively.
In Lagos, the product has also seen a significant price drop. In the Ojo area of the state, Sebastin Ovie, a dealer, told the aforementioned publication that the price has crashed from the January price, attributing the crash to low demand and stronger naira.
“The current price of the product is between N7,000 and N7,500 per 50kg bag, depending on the brand. This is a significant drop from the average of N12,000 which most dealers were selling in February and March,” he said.
A dealer in the Agege area of the state, who identified himself as Taofik Olateju, said sales are picking up due to the price drop. He recalled that Nigerians stopped buying at one point due to the high price of the product, N15,000 per bag.
“I am sure most dealers ran at a loss then because we had mainly old stocks which we wanted to offload quickly,” he said, confirming that the product sells for between N7,500 and N8,000, depending on the brand and the demand for the brand.
Olateju noted that “because the naira is now doing well against the dollar, it will be unreasonable for manufacturers to continue to sell the product at the old prices. I also believe that the federal government’s intervention and the threat to license more importers may have worked, leading to the reduction in price.”
In Enugu, the product sells between N7,200 and N7,500, depending on the brand and location.
“This is a city where the price of a 50kg bag went for as high as N12,000 and N13,000 in some cases in February and March,” Samuel Chikwendu said.
He added that the prices of other building materials, especially iron rods, have also dropped considerably, which is why, he said, activities are picking up again at construction sites.
The story is slightly different in Owerri, the capital of Imo State, where Innocent Okonkwo revealed that low demand was also driving the price drop, adding that a 50kg bag was selling for N9,000 on the average in the state.
