The sudden hike in the price of cement has worsened an already delicate situation for Nigerians groaning under harsh economic conditions. In the last few weeks, the price of a bag of cement has gone up from N1, 6000 to over N2, 000 while a truck load of the product now costs N1.2m, up from N950, 000. Transportation problem caused by a hike in the cost of diesel, and huge demand by contractors in a hurry to complete ongoing projects before the end of the financial year are some of the reasons given for this increase.
Members of the Cement Manufacturers Association of Nigeria attributed the exorbitant hike to scarcity of diesel and other lubricants, forcing factories to operate below capacity. Others blame importers bent on sabotaging government's effort in encouraging investors in the sector by controlling the importation of the product. Whatever the reasons may be, the hike is not in the interest of the government and the citizens because of the multiplier effect it can have on other sectors of the economy. The building and construction sector will slow down, those who plan to build their own houses would be hard-put to make up for the increase; landlords would cash in to hike rents, and tenants, mostly government workers, would ask for pay reliefs to cushion the effects.
That is why the government should empower the appropriate regulatory agencies to see that the hike is reversed as quickly as possible. A short-term solution, like massive importation, has to be adopted so that ongoing building projects are not grounded. There is the need to flood the market with the product to address the current shortfall and force the price down. While this temporary measure is taking place, government must consider long-term solution to the persistent problems cement consumers frequently encounter.
For several years running the exorbitant prices of building product have discouraged many Nigerians from building their homes while the option of owning government built ones are impossible for many because they are either priced beyond the reach of ordinary Nigerians or the conditions are so steep that only the rich and powerful can meet them. If the government is desirous of enhancing the wellbeing of Nigerians through a liberal housing policy, basic building materials like cement should be priced within the reach of those earning the minimum wage.
A step towards resolving the cement matter is to identify why most of the several cement factories in the country are not operating, despite government incentives. The price of the commodity has remained high because the few that are functional do not produce at installed capacity. Existing cement manufacturing companies should be supported to enable them attain the required capacity while efforts are being made to revive ailing and comatose ones. It would be very difficult for the country to be self-sufficient in cement production when the industries that produce it fold up daily due to lack of enabling environment. For instance the trucks that ferry the products nationwide are subjected to several and multiple levies, some of them illegal, along the highway, extra costs that are passed on to the consumer.
The operators require more incentives and concessions to function properly, like providing stable electricity. To boost production, government must facilitate the access of cement manufacturers to uninterrupted supply of gas and other energy requirement for energy generation. To solve the problem of transportation, there should be availability of diesel for the trucks taking them to various parts of the country; sadly though such trips take longer than necessary because of our bad roads. A factor that could make a big difference is the revival of the nation's railway network for bulk transportation at considerably lower cost.
While government considers easing the burden on consumers, and steps up effort to attain its objective of attaining self-sufficiency by 2013, cement manufacturers also have to be more proactive in the use of more locally available input and to open up more depots, especially in rural areas, so that the commodity can be readily accessible to more people. After all it does not make a lot of sense for the price of cement to be increasing so dramatically, when over 70% of its component raw materials are available locally.
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