Rabiu revealed that despite BUA Cement’s efforts to maintain a price of N3,500 per bag throughout 2023, middlemen had inflated prices to as much as N7,000 to N8,000 per bag.
Abuja, Nigeria – The Chairman of BUA Cement, Abdul Samad Rabiu, has attributed the soaring cost of cement in Nigeria to the activities of middlemen, who he claims are exploiting consumers within the supply chain.
Rabiu made this statement during the company’s 8th Annual General Meeting held recently in Abuja.
Rabiu revealed that despite BUA Cement’s efforts to maintain a price of N3,500 per bag throughout 2023, middlemen had inflated prices to as much as N7,000 to N8,000 per bag.
He emphasized that BUA Cement had sold over a million tonnes of cement at the lower price, intending that the savings would be passed on to consumers. However, this was not the case, as dealers significantly marked up the prices, undermining the company’s policy.
“The intention was for dealers and retailers to pass the benefits of the low price to end-users, but unfortunately, some were selling at N7,000 and N8,000 per bag, making substantial profits from the high margins,” Rabiu said. He added that BUA Cement eventually had to abandon the low-price policy, as it was not meant to subsidize middlemen.
Rabiu also cited broader economic challenges, including the naira’s devaluation and the removal of the fuel subsidy, as factors that rendered the policy unsustainable. “We wanted the price to stay at that level, but dealers refused. We could not continue because we did not want to be in a situation where we were subsidizing dealers,” he explained.
The rising cost of cement has had a significant impact on Nigeria’s housing sector, where building materials account for 50-65% of construction costs, according to Adekunle Ebenezer, a quantity surveyor at Anchor University, Lagos.
Ebenezer warned that the increase in construction costs would inevitably be passed on to buyers, exacerbating the already severe housing crisis in the country.
Nigeria is currently facing a housing deficit, with over 28 million citizens lacking access to decent and affordable housing, according to the International Human Rights Commission. The high cost of inputs, including cement, is frequently cited as a primary driver of the escalating prices of housing units, making homeownership increasingly unattainable for many Nigerians.
The President of the Council for the Regulation of Engineering in Nigeria, Sadiq Abubakar, has also linked the rising cement prices to the growing incidence of building collapses in the country.
Abubakar voiced his concerns during an investigative hearing organized by the House of Representatives Joint Committee on Solid Minerals, Industry, Commerce, and Special Duties. “An increase in the price of cement is one of the key culprits of building collapse,” Abubakar stated.
Experts warn that the ongoing surge in housing costs may force more Nigerians into substandard living conditions, as property owners may choose to occupy unfinished buildings without essential amenities to avoid escalating rental fees. There is also growing concern about the proliferation of unsustainable buildings in Nigeria, as economic pressures push developers to use cheaper, lower-quality materials.
Adekunle Ebenezer stressed the need for a more holistic approach to building material selection, emphasizing that economic, environmental, and social factors must all be considered. However, he noted that sustainable building materials with low carbon emissions are often imported, making them prohibitively expensive due to high importation costs.
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