April 21, 2021 / 8:07AM / Nigeria Senate / Header Image Credit: Channels
The Senate has called on the Federal Government to introduce liberal policies such as the provision of industrial and larger tax incentives to encourage local investments in cement production in Nigeria.
According to the Upper Chamber, doing so would, besides attracting local investors, boost the production of cement as well as reduce its price in the market.
The call on the Federal Government was contained in a prayer adopted by the chamber after it considered a motion titled: "Need for Liberalization of Cement policy in Nigeria", sponsored by Senator Ashiru Oyelola Yisa and co-sponsored by five other lawmakers.
They are: Senators Muhammad Enagi Bima (Niger South); Adelere Adeyemi Oriolowo (Osun West); Samuel Egwu (Ebonyi North); Kabiru Gaya (Kano South); and Michael Nnachi (Ebonyi South)
Presenting the motion, Senator Yisa noted that Cement is one of the few building materials in which Nigeria is self-sufficient.
The lawmaker observed that "as of 2018, the installed capacity of cement producers was about 47.8MMT which is far above the estimated (2018) consumption of about 20.7MMT. Yet, the prices of cement in Nigeria (N380) in about 240 percent higher than the global average;
"Cognizant that Cement takes a large share of domestic expenditure, and the price of each commodity significantly impacts the government's ability to provide much-needed infrastructural works required for the growth of our economy;
"Further cognizant that the recent increase in the price of Cement ( from N2,600-N3,800) slowed down the amount of construction work being embarked upon thus negatively affecting labour engagement and almost collapsed the procurement plan of the governments in 2020 Appropriation Act;
"Mindful that the Nigerian cement market is oligopolistic with three players (Dangote Cement (60.6 percent); Lafarge Africa Plc (21.8 percent); and BUA Group (17.6 percent) largely dominating the scene, therefore, making it susceptible to price-fixing practices;
"Convinced that if the status quo persists, the negative consequences of high prices on the economy will outweigh the benefits of producing cement locally;
"Worried that the significant rise in cement prices in the country and the low purchasing power of Nigerians may result in substandard building constructions and non-completion of planned infrastructural works;
"Strongly believes that there is an urgent need to encourage more local production of cement to satisfy the demands of Nigeria with a steady growth rate of approximately 3 percent per annum; a housing deficit of 30 million units and less engagement of over 10.5 million workforces of the building and construction industry; and
"Further strongly believes that unfavourable government policies such as the imposition of multiple taxes, erratic power supply, a government ban on importation in violation of ECOWAS Trade liberalization Scheme (ETLS) and subsequent lifting of importation in favour of few producers has negative implications on the growth of our infrastructures."
Accordingly, the Senate in its resolution called on the Federal Government of Nigeria to provide more industrial incentives and industrial protections such as offering concessionary loans and larger tax incentives for new entrants to increase the production of cement, reduce price, and encourage more producers in Nigeria.