Cement Importation Matters ArisingCement Importation Matters ArisingRecently, the Federal Government issued licences to 13 companies for massive importation of cement into the country. This is with a view to reducing the retail price of the commodity from it's present N2,000 to N1,000 per bag.
While handing over the licences to the successful bidders, Minister of Commerce, Mr. Charles Ugwu reiterated that government was not unmindful of the fact that after factoring local transportation costs and profit margin, the price of a 50kg cement would be within the canvassed range. The assumption, according to him, is predicated on the fact that these companies would source the product from countries where it is cheap. Expectedly, this bold move by the government has generated a lot of interest from the public because of the galloping prices of cement in recent times. Such a situation has impacted negatively on the construction industry, leaving in its wake many abandoned projects. According to David Iweta, President, Sapele Chamber of Commerce, Industry, Mines and Agriculture, “the country now has a short fall of 16 million houses while the price of apartments is so high that for a single bedroom, people are paying so much even when they earn mere pittance”.
Interestingly, most of the successful companies have promised to make available large quantities of cement into the country within the next 40 days. If successfully executed, it would have effectively crippled the near stranglehold of the cartel that presently controls cement business in the country. Matter of fact, we are optimistic by the trading records of these companies given that they have been in the business for a long while and therefore possess the logistics and technical competence to meet the expectation of the country. We have to affirm the conviction that the present scarcity of cement was not a function of sudden development. In fact, it was a conscious and deliberate act of nepotism encouraged by the immediate past administration to favour cronies through awarding them restrictive licences and waivers that were designed to unfairly shut out other competitors from cement importation.
The gravest aspect of such shenanigans has been the culpable neglect of many cement factories across the country by respective state governments which has led to their rot and decay. This sorry situation succeeded in no small measure to making Nigeria dependent on whole sale importation of cement masterminded by a coterie of powerful interests. Whereas, that was anti-competition it also grates against the tenets of free market economy that Nigeria subscribes to.
It is therefore heartening to hear Hon. Minister emphasise that the present importation regime is only a shot term measure designed to bridge the gap between demand and supply. As a long term measure, Chief Ugwu made it known that government was willing to support the local production of cement. Much as this would help bring down prices through unrestrained competition it will have the added measure of making the product available in the market and more importantly create needed jobs for Nigerians.
The snag remains that cement production is capital intensive requiring huge investments in excess of $400million to set up a medium-size plant. This scenario therefore challenges the capacity and creativity of our financial institutions. They should step in to salvage the situation by making available needed funds for such ventures. The present scarcity reveals the extensive damage done to the economy by some unfriendly policies of the previous administration.
Even as we lament the parlous situation, it is time that the country makes a deliberate effort to find alternatives to cement. Nigeria is blessed with abundant raw materials that can replace cement such as clay and wood. The country should be part of global effort to encourage usage of such alternatives. Aside that, they are cheaper, durable and easily affordable. Our research institutions in collaboration with the Nigerian Building Society (NBS), should be in the vanguard of promoting this new culture. They should t start by constructing prototypes and pilot projects using the alternative materials. Moreover, our leaders and elites should set the example by constructing their apartments with local materials. In so doing, they would have encouraged other citizens to rely less on expensive cement products for building purposes.
As we expect the massive importation we take for granted that the Standard Organisation of Nigeria (SON) set the standard for the quality of cement to be imported. Similarly to make for hitch-free exercise, the authorities must allow for more entry ports like Port Harcourt, Warri and Calabar. That way, the country would be saved the agony and bottlenecks that marked past programmes.
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