The Federal Competition and Consumer Protection Commission has uncovered evidence of possible price manipulation in Nigeria’s cement sector, despite the country’s vast limestone reserves and production overcapacity.
A three-month cross-border investigation by the FCCPC has revealed that Nigerian consumers pay significantly more for cement than their counterparts in Kenya, Tanzania and Togo – raising serious questions about competitive practices in the industry.
The commission’s preliminary findings suggest that prevailing market prices cannot be adequately explained by legitimate cost factors, prompting a full-scale probe into potential anti-competitive behaviour.
In Kenya, a 50kg bag of cement retails at approximately $5.40 (N7,344), while Tanzanian consumers pay about $4.80 (N6,528). Even Togo, which possesses no limestone deposits of its own, sells cement at roughly $6.75 (N9,180) per bag.
By contrast, Nigerian prices have surged from N9,300–N9,700 in January to between N13,000 and N15,000 in some regions by July – despite the country’s installed production capacity of 60–65 million metric tonnes annually, more than double domestic consumption of 25–30 million metric tonnes.
Price disparity defies market logic
The FCCPC’s Anticompetitive Practices Department conducted the study in response to widespread public complaints over escalating cement costs, a critical input in the construction sector.
According to a statement from the commission’s Director of Corporate Affairs, Ondaje Ijagwu, the investigation examined limestone availability, population dynamics, production capacity, consumption patterns and retail pricing across multiple African markets.
“Findings from an industry-wide investigation suggest possible manipulation of prices of cement in the Nigerian market,” the statement read.
“Of particular concern to the commission is that this level of production capacity has not resulted in the downward pressure on domestic prices that might ordinarily be expected in a competitive market with substantial excess capacity.”
Industry players have attributed the high prices to energy costs, naira depreciation, imported machinery and spare parts, and logistics expenses. However, the FCCPC said it is scrutinising these explanations against verified data on production costs, capacity utilisation and other market conditions.
Probe deepens as regulators demand records
The commission has issued formal Notices of Commencement of Investigation and Summons to Produce to major sector players, requesting documentation on pricing methodologies, production volumes, capacity utilisation, export activities and commercial relationships.
The investigation will determine whether prices are driven by legitimate market forces or by coordinated conduct, abuse of market power, deliberate supply restrictions, or anti-competitive distribution arrangements.
Executive Vice Chairman and Chief Executive Officer, Tunji Bello, emphasised the strategic importance of cement to Nigeria’s economy.
“Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business,” Bello said.
“When concerns persist about how such an important market is functioning, the commission has a duty to look beyond assumptions and establish the facts.”
He stressed that the probe is not intended to dictate business decisions or restrict legitimate profits, but to protect the competitive process.
“Businesses are entitled to make legitimate commercial decisions and earn returns on their investments. Competition law does not prevent that. Its purpose is to protect the competitive process, so that prices, output and other market outcomes are determined by genuine competition rather than conduct that unlawfully restricts it,” Bello added.
The investigation comes as rising cement costs continue to strain Nigeria’s construction industry, driving up housing and infrastructure project expenses across the country.