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Nigerian lawmakers have urged the government to break the dominance of the country’s three biggest cement makers to encourage more competition and reduce prices.
Dangote Cement Plc, which has a 61% share of the market, Lafarge Africa Plc and BUA Group effectively control production in Africa’s most populous country, the Nigerian Senate said in an emailed statement late Tuesday. That makes the market “susceptible to price-fixing practices,” they said.
Dangote Cement is owned by Africa’s richest man, Aliko Dangote, who operates plants across 10 countries and is building the continent’s largest oil refinery in the West African nation.
More government incentives such as concessionary loans and larger tax rebates for new entrants could make the market more competitive, the lawmakers said. That may in turn bring down a cost of cement that’s 240% higher in Nigeria than the global average.
More locally produced cement is also needed to reduce a housing deficit of 30 million units, the lawmakers said. Cement producers didn’t respond immediately to calls for comments.
New Nigerian cement manufacturers will have a hard time competing because the cost of production is one of the highest in the world, Onyeka Ijeoma, analyst at Vetiva Capital Management, said by phone. “If there is anything the senate can do to help open up the space, it will come through improving the ease of doing business,” he said.
Bongani Ndlovu