The Federal Government has issued a firm directive to cement manufacturers nationwide to immediately lower the market cost of their products. This intervention comes amid rising concerns that current pricing structures are creating significant financial strains on active infrastructure initiatives across the country. According to authorities, the pricing surge has led to numerous construction firms demanding contract variations, a situation that the government insists must be addressed by adjusting production costs rather than public budgets.

Minister of Works, Senator David Umahi, announced that official talks between the government and major industry stakeholders are scheduled to commence on July 1, 2026. Speaking at an industrial gathering in Lagos, Umahi stated that building material suppliers must take proactive measures to manage their pricing structures instead of relying on the state to absorb rising material expenses. The minister emphasized that contractors are under immense pressure due to financial constraints, but noted that the administration will not be reviewing existing project allocations.

Beyond securing public infrastructure, the government highlighted that a reduction in market rates is essential to support affordable housing for everyday citizens. The ongoing expansion of transport networks, bridges, and highways under President Bola Tinubu’s administration offers extensive commercial prospects for suppliers who adapt to the country’s development needs. Consequently, industry players have been urged to scale up their manufacturing volumes to balance affordability with the accelerating demands of national growth.

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The Minister of Works, David Umahi, has called for a reduction in cement prices in Nigeria, urging manufacturers to support the Federal Government’s infrastructure and housing development efforts by making the product more affordable.

Umahi made the appeal during the rebranding ceremony of Lafarge Africa Plc to HBM. He noted that cement remains a critical component of road construction, housing projects, and other infrastructure developments, stressing that lower prices would help accelerate ongoing projects and reduce construction costs nationwide.

The minister expressed concern over the high cost of cement despite the availability of raw materials and local production capacity in the country. He said affordable cement prices would not only benefit government projects but also ease the financial burden on individuals and private developers undertaking building projects.

Speaking at the event, officials of HBM reaffirmed the company’s commitment to maintaining quality standards and contributing to Nigeria’s economic growth through continued investment in manufacturing and sustainable business practices.

Industry stakeholders noted that cement prices have remained a major concern for builders and property developers, with rising construction costs affecting housing delivery and infrastructure expansion across the country. They added that stable and affordable pricing could significantly improve access to housing and stimulate activity within the construction sector.

Analysts believe that collaboration between government and cement manufacturers will be essential to addressing cost challenges and supporting the country’s broader development objectives, particularly in housing and infrastructure.

The minister reiterated the government’s commitment to expanding infrastructure and creating an enabling environment for industrial growth while encouraging manufacturers to align with national development priorities.

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Nigeria’s housing sector is facing fresh pressure as the cost of a 50-kilogram bag of cement continues to rise sharply, with prices reaching as high as ₦15,000 in some locations nationwide.

The increasing cost has triggered concerns from the Real Estate Developers Association of Nigeria (REDAN), which warns that the trend could slow housing development, delay projects and worsen Nigeria’s growing housing deficit.

Cement Prices Surge Above 30 Percent

Industry data indicates that cement prices have experienced a steep increase within a short period.

A bag of cement that sold for about ₦7,500 in late 2025 reportedly rose to between ₦9,000 and ₦10,000 in early 2026 before climbing further to between ₦11,500 and ₦15,000 depending on location and brand.

The latest increase represents a rise of more than 30 percent in just a few months, making cement one of the most volatile construction inputs in Nigeria.

Developers Face Rising Project Costs

For real estate developers already operating in a difficult business environment, the increasing cost of cement is creating additional pressure.

REDAN warned that because cement accounts for a substantial share of construction costs, rising prices directly affect project viability.

The association noted that some developers are already scaling back projects, delaying delivery timelines and reconsidering planned investments.

According to industry stakeholders, the situation is particularly difficult for low- and middle-income housing developments where affordability margins are already narrow.

Other Building Materials Also Recording Price Hikes

The cement crisis is occurring alongside increases in other construction materials.

Reports indicate that:

• Steel prices have risen by roughly 20 percent
• Sharp sand costs increased by about 25 percent
• Timber and other construction materials have also recorded sharp increases

These combined increases are significantly driving up the total cost of housing delivery.

Rent Prices Rising in Major Cities

The effect of rising construction costs is gradually spreading into Nigeria’s rental market.

In cities such as Lagos and Abuja, reports suggest annual rent for self-contained apartments has increased sharply.

Some units previously rented at about ₦400,000 annually now reportedly cost between ₦800,000 and ₦1.5 million.

This trend is increasing pressure on households already dealing with inflation and declining purchasing power.

Concerns Over Construction Quality

Industry experts have also raised concerns that rising material prices may encourage some developers to cut costs through the use of lower-quality materials.

Stakeholders warn that such practices could create safety risks, especially as Nigeria continues to record cases of building collapse.

They stress that maintaining construction standards remains critical despite current economic pressures.

REDAN Calls for Government Intervention

REDAN has urged the Federal Government and regulatory agencies to intervene through coordinated measures aimed at stabilising the building materials market.

The association recommended:

• Improved supply chain efficiency
• Support for local production of construction inputs
• Greater pricing transparency
• Stronger engagement with stakeholders across the value chain
• Increased investment in alternative building technologies

Industry leaders warn that without urgent intervention, Nigeria’s affordable housing goals may become increasingly difficult to achieve.

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.A new report by policy think tank Agora Policy has attributed the persistently high price of cement in Nigeria to weak competition and market concentration within the industry, despite the country achieving self-sufficiency in cement production more than a decade ago.

The report, published on Tuesday, noted that rising cement prices have significantly affected construction costs, limiting the delivery of affordable housing and slowing infrastructure development across the country.

According to Agora Policy, Nigeria became formally self-sufficient in cement production in 2012, yet prices have remained elevated compared to other countries in Sub-Saharan Africa. The report observed that industry profitability continues to exceed regional and international benchmarks.

In September 2025, Nigerian cement producers recorded average core operating profit margins of about 49 per cent, an increase from roughly 34 per cent in 2024. Agora Policy said these margins are unusually high and suggest that consumers are not benefiting from increased production capacity.

The report stressed that the expansion of production capacity by major manufacturers such as Dangote Cement, BUA Cement, and Lafarge WAPCO has not translated into lower prices for households, builders, or government-funded projects.

Questioning the justification offered by cement manufacturers, the report highlighted that Nigerian producers sell cement at lower prices in some foreign markets while remaining profitable.

“Producers attribute high domestic prices to taxes, energy costs, transport challenges, and financing constraints, arguing that exports are cheaper due to exemptions from certain levies,” the report stated.

“However, this explanation raises a critical question: if costs are the main constraint, why are producers able to sell cement profitably abroad at lower prices than those paid by Nigerian consumers?” it added.

Agora Policy argued that the pricing gap suggests that market structure and pricing power play a major role in sustaining high cement prices in Nigeria.

The report traced the roots of the current situation to policy decisions made in the late 1990s and early 2000s, when Nigeria relied heavily on cement imports due to low domestic production. To address shortages, the government introduced import restrictions and investment incentives aimed at boosting local production and stabilising prices.

These incentives included import protection, preferential access to foreign exchange, tax holidays, and exclusive limestone mining rights. According to the report, these measures were intended to be temporary and tied to affordable pricing outcomes.

While Nigeria successfully achieved cement self-sufficiency by 2012 and installed capacity exceeded domestic demand, the report said the expected benefits of competition-driven pricing never materialised.

Instead, the industry consolidated into what Agora Policy described as a highly concentrated oligopoly, with a few dominant firms controlling production, distribution, and pricing.

“Cement is not an ordinary commodity. It is a critical input for housing, infrastructure, and industrial development,” the report noted, warning that persistently high prices undermine employment, productivity, and long-term economic growth.

The think tank also assessed the Federal Government’s response to rising cement prices, including proposals to reopen import channels. It cautioned that cement imports are unlikely to offer lasting relief due to high transportation costs, limited global spare capacity, and the dominance of a few global producers.

According to the report, import liberalisation would at best provide short-term relief and would not address the underlying competition issues in Nigeria’s cement market.

As a long-term solution, Agora Policy recommended strengthening domestic competition rather than relying on imports. The report outlined five key policy measures, including ending exclusive control of limestone and clinker by a few firms and enforcing “use-it-or-lose-it” rules for mining licences.

It also recommended separating cement production from distribution, allowing at least 30 per cent of cement sales to pass through independent third-party distributors to increase market access and consumer choice.

Other proposals included enforcing antitrust measures to address regional dominance, mandating export pricing parity, and introducing automatic pro-competition triggers when plant utilisation falls below certain thresholds.

The report further urged mandatory quarterly disclosures of plant capacity, ex-factory prices, and regional sales data to help regulators monitor pricing patterns and supply constraints.

Agora Policy concluded by calling on the Federal Competition and Consumer Protection Commission to establish a dedicated cement competition desk to oversee market power, limestone access, transport bottlenecks, and barriers to new entrants.

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